A Review of the Nigerian Energy Industry

Oil theft occurs daily in Ogoniland –Shell

Shell logo26 June 2014, Lagos – The Shell Petroleum Development Company of Nigeria Limited has raised the alarm about the daily activities of oil thieves in Ogoniland, located in Gokana Local Government Area of Rivers State.

The oil major also said apart from increased cases of oil theft in the area, there had also been rising cases of illegal crude refining.

Lamenting the level of degradation in Ogoniland, the Managing Director, SPDC, Mr. Mutiu Sunmonu, while addressing newsmen in Lagos, said, “Crude oil theft now happens everyday in Ogoni land. This, however, is a big threat to the intended clean-up of the area.”

He said despite the rise in the activities of pipeline vandals in the area, Shell was also intensifying efforts to educate the people, especially the youth population.

On the planned clean-up of the area, he said government agencies would drive the process, and not Shell. “Shell will only support. It will not be wise of us to take on the role of government,” Sunmonu said.

Crude oil theft, sabotage and illegal refining were the main sources of pollution in the Niger Delta today, the firm said, adding that in 2013, the Nigerian government estimated crude oil theft and associated deferred production at over 300,000 barrels of oil per day.

Intentional third-party interference with pipelines and other infrastructure was responsible for around 75 per cent of all oil spill incidents and 92 per cent of all oil volume spilled from facilities operated by the SPDC over the last five years (2009-2013), it explained.

It further explained, “Much greater volumes of oil are discharged into the environment away from SPDC facilities through illegal refining and transport of stolen crude oil. In 2013, the number of spills from SPDC operations caused by sabotage and theft increased to 157, compared to 137 in 2012, whilst production losses due to crude oil theft, sabotage and related temporary shut-downs increased by around 75 per cent.

“On average around 32,000 bopd were stolen from SPDC pipelines and other facilities, whilst the joint venture lost production of around 174,000 bopd due to shutdowns related to theft and other third-party interference. This equates to several billion dollars in revenue losses for the Nigerian government and the joint venture.”

Operational spills (those caused by corrosion, equipment failure or human error), Shell said accounted for around 15 per cent of the total volume of oil spilled from SPDC facilities in 2013, of which the number of operational spills over 100kg was 30, down from 36 in 2012 and 63 in 2011.

However, it explained that the volume of oil spilled due to operational causes increased to 0.4 thousand tonnes, of which around 0.3 thousand tonnes of this volume was from a single spill.

In 2013, the oil major said it continued work to maintain and replace pipelines and other infrastructure, with 250km of pipelines and flow lines replaced (following 312km completed in 2012 and 208km in 2011).

SPDC’s entire area of operations, according to Sunmonu, is covered by pipeline and asset surveillance contracts to ensure that spills were discovered and responded to as quickly as possible.

He said, “These surveillance activities primarily employ members of the communities the pipelines traverse. There are also daily over-flights of the pipeline network to detect new theft points.

“SPDC is continually looking for new ways to make it more difficult for thieves, for example by burying new pipelines deeper or covering them with concrete, securing well heads to make them more tamper-proof, making repairs and removing illegal taps. Despite these efforts, the menace of theft and sabotage persists, with long-term social, economic and environmental implications.

“Only a concerted response by all stakeholders, including government, communities and civil society can end it.”

On clean-up and remediation, SPDC said it cleans and remediates the area impacted by spills from its facilities, irrespective of the cause, adding that in the case of operational spills, it pays compensation to those impacted, as stipulated by Nigerian law.

The company said, “Of 167 sites in need of remediation identified at the start of 2013, SPDC had cleaned over 85 per cent by the end of the year. Due to increased access to Ogoniland we were able to make progress on verifying the condition of non-operating equipment and facilities, as recommended by the United Nations Environment Programme.

“This identified 125 additional sites in need of remediation in this region. Combined with an increase in theft and sabotage related spills inside and outside Ogoniland during the year this resulted in an increase in the total number of sites requiring remediation to 303 at the end of 2013.”


– The Punch

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