A Review of the Nigerian Energy Industry

Nigeria loses 300,000 bpd to oil theft in 2013 – Shell MD

Mutiu Sunmonu, Shell MD

26 June 2014, Lagos – Nigeria lost over 300,000 barrels of crude oil daily to oil theft, deferment and illegal refining in Niger Delta region in 2013, the country Chairman of Shell Companies in Nigeria, Mutiu Sunmonu, has said.

While addressing journalists in Lagos on Tuesday, he also revealed that intentional third party interference on Shell’s pipeline and infrastructures accounts for 75 per cent of oil spillage incidents, pointing out that greater volume of the oil discharged into the environment was due to illegal refining and the transportation of stolen crude oil.

Sunmonu, who is also the Managing Director of Shell Petroleum Development Company of Nigeria SPDC said “In 2013, the number of oil spill from Shell operation caused by sabotage and theft increased by to 157, compared to 137 in 2012, while production losses due to crude oil theft ,sabotage and related temporary shutdown increased to 75 per cent. On the average 32,000 barrels of oil daily was stolen from Shell pipelines and other related facilities while the joint venture lost over 174, 000 barrels to shut down and oil theft. This amounts to several billions of dollars in revenue to Nigeria. However, Operational Spill, that is, those caused by corrosion and equipment failure, or human error accounted for 15 per cent of total volume of oil spilled from Shell facilities in 2103,” he added.

On revenue accrual to  government, he insisted that the Federal government still take over 98 per cent of revenue generated by oil producing firms operation in Nigeria, adding that oil firms survives on margins and produced oil sold to the international market.

Speaking on the measures to mitigate the challenges of oil spillage, he said that Shell, within the period under review, worked to maintain and replace pipeline and facilities. For instance, 250km of pipelines and flow lines was replaced in 2013, 313 km fixed in 2012 and 208 km replaced in 2011 respectively. He noted that the pipelines replaced were certified in line with world class management system as well as regular safety integrity check and audits.

Laying emphasis on the clean up the remediation the environment, he said that SPDC has gone far to clean and remediate the impacted spill sites no matter the cause.

According to him, out of 167 sites in need of remediation identified in 2013, Shell had cleaned up 85 per cent by the end of the year. Due to increase access to Ogoniland we were able to make progress on the verification of the conditions of non-operated equipment and facilities as recommended by the United Nations Environment Programme UNEP.

– Anayo Korie, Daily Independent

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