With the demand for oil currently picking up due to a stronger global economy, the situation in Nigeria and the prevailing political instability and violence in Iraq are said to be frustrating progress in terms of oil production and exportation.
The International Energy Agency confirmed on Tuesday that Iraq’s oil growth targets looked increasingly at risk given recent developments in the country.
Iraq is the second-largest producer in OPEC and its northern exports have been offline since March.
“OPEC output has been hit by unrest in Libya, sanctions on Iran and oil theft in Nigeria,” the IEA said.
Royal Dutch Shell had said in March that Nigeria was losing over $1bn monthly to the activities of oil thieves.
The oil major said the monthly $1bn figure was estimated and added that the country might be losing more.
Industry analysts, who computed the figure over a 12-month period, concluded that the country must have lost at least $12bn to oil theft in 2013.
Similarly, Shell said it lost nearly $1bn to theft and various disruptions to its Nigerian oil and Liquefied Natural Gas operations in 2013, and noted that rampant oil theft was costing the country even more.
Oil theft is often associated with criminals who tap crude from pipelines for local refining. Stolen oil also leaves the country in tankers.
In March this year, the mixed military and police Joint Task Force for the oil-producing Niger Delta region arrested two Britons and 10 Nigerian on charges of trying to bribe a military officer to facilitate oil theft.
Oil theft by armed gangs is rampant in the region, with estimates ranging from 100,000 barrels to 250,000 barrels a day lost to so-called “bunkerers”, according to a recent report.
In the same month, the Federal High Court in Yenagoa, Bayelsa State, sentenced three Indians to 15 years imprisonment for oil theft.
The convicts were the captain of a vessel, MT Akshay, Sailesh Kumar Singh, and Chadrashekar Sharma and Ajay Bhatiya, owner of the vessel, who is said to be at large.
A statement signed by the Head of Media and Publicity of the Economic and Financial Crimes Commission, Mr. Wilson Uwujaren, had revealed that the three convicts were among 12 suspected oil thieves who were arrested aboard the MT Akshay by members of the JTF and the Central Naval Command, Yenagoa in November 2012.
The IEA, which is the adviser to the United States and other industrialised countries, also said in its Medium Term Oil Market Report on Tuesday, that global growth in oil demand might start to slow down by the end of this decade due partly to high prices, and that shale oil would start to spread outside the US.
At present, the agency expects OPEC to increase its production capacity by 2.08 million barrels per day to 37.06 million bpd by 2019. More than 60 per cent of the growth is expected to come from Iraq.
– The Punch