A Review of the Nigerian Energy Industry

Shell canvass stakeholders’ support in oil theft campaign

Oil theft05 August 2014, Lagos – As oil theft, sabotage, spills and other related crimes persist in the Niger Delta with its multiplier of negative effects to all stakeholders , Shell Petroleum Development Company has asked for the support of the media and other critical stakeholders in addressing the menace.

At a summit organised recently for newsmen and other stakeholders in Yenagoa, Bayelsa State, Shell said the menace remained unabated in the region. The firm believed that only a concerted response by all stakeholders could end the oil theft and related atrocities in the region.

In his lecture, the Manager, Pipeline Right of Way Management, Mr. Wenike Princewill, said crude oil theft and illegal refining were the main sources of pollution in the Niger Delta. He added that the Federal Government lost estimated 300,000 barrels of oil per day.to oil theft and deferment of crude oil export to the global market

He explained that intentional third party interference with pipelines and other infrastructure was responsible for about 75 per cent of oil spill incidents and about 92 per cent of oil volume spilled from facilities operated by Shell over the last five years.

According to him , when the losses were converted into money, the country must be losing approximately $3.2bn per day at $100 per barrel.

He added, “Much greater volumes of oil are discharged into the environment away from the SPDC facilities through illegal refining and transportation of stolen crude oil.

“In 2013, the number of spills from the SPDC operations caused by sabotage and theft increased to 157, compared to 137 in 2012, while production losses due to crude oil theft, sabotage and related temporary shutdowns increased by around 75 per cent.

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

Princewill said, the ugly development called for collaboration with the media and non-governmental organisations to discourage people from encroaching on pipelines.

Princewill, who said Shell had its huge footprints in Niger Delta, with Rivers and Bayelsa having high scope of oil exploration, said there was high incidence of encroachment on Shell’s right of way.

However, he said the Bayelsa State government was supportive in enforcing Shell right of way.

He warned against blowing oil well-heads, saying apart from revenue loss to the government and Shell, the impact could be dangerous to the host communities.

He said currently, Shell had over 3,000 occupiers on its well-heads, noting that occupiers failed to observe the mandatory 100 metres from the pole.

He expressed happiness that Bayelsa had prescribed punishment for occupiers of Shell’s right of way, saying the initiative was a welcome development.

Princewill said Shell, in a bid to make it difficult for oil thieves to operate, had resorted to burying pipelines deeper and covering them with concrete, adding that despite those efforts, the menace of oil theft and sabotage had persisted, with long term social, economic and environmental degradation.

On leakages, he said Shell had a deliberate policy that whenever it confirmed a leak, it usually suspended production in order to stop the flow into the environment. He noted that efforts have been made to contain spills, with access to spill site usually a critical factor in shaping the response.

“There have been instances where individuals, community groups or armed gangs have denied Shell access to spill sites. The reasons for this range from intra-communal disputes to demands for clean up contracts and/or higher compensation or plain criminal activity. he further added.
*Anayo Korie – Daily Independent

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