22 February 2018, Sweetcrude, Abuja – The Managing Director, Shell Petroleum Development Company of Nigeria, Mr. Osagie Okunbor, has said that well over 90 percent of what oil spills in the Niger Delta region is as a result of theft and sabotage to facilities.
Okunbor gave the insight during an Executive Roundtable session titled: “Growth outlook and Strategies for staying competitive after a Global Downturn” at the ongoing Nigeria International Petroleum Summit (NIPS) in Abuja.
He insisted that the operational failures of the International Oil Companies (IOCs) can only account for 5 to 10 percent of the oil spills despite popular beliefs, stressing that Shell has resolved to shut down any asset considered to be unsafe.
According to him, Shell had over the years invested huge amount in pipeline replacements and assets integrity, adding that oil spill is the biggest issue confronting the company in the Niger Delta region.
Okunbor, who is also the chairman of the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry (LCCI-OPTS), said that pipeline vandalism was the main reason Nigeria elapsed into recession in 2016, adding that the country was losing about 300,000 barrels per day due to sabotage at the time when oil prices were at historic lows.
He noted that, “The standing view we have in Shell is that if we feel the asset is not safe then we shut it down. Sometimes at great economic cost that requires great discussions with our partners but we will shut it down. Through the years we have invested quite a bit in pipeline replacements, huge spending on asset integrity.
“You and I living in that part of the world know that when you actually look at it is actually less than 10 percent maybe 5 percent of these spills are as a result of operational failures well over 90 percent of what we are seeing is a result of theft and sabotage to facilities.
“This is this biggest issue that confronts us in the Delta today. In 2016 many of us in this country saw what happened in the western delta, when our export line was sabotaged, this is one of the biggest reasons why this country went into recession, close 300,000 barrels per day of oil was taken out at time when oil prices were at historic lows and it cost us well over $100 million to actually replace that line
“This problem is real and we will not hide as operators in ensuring that continue to operate in the best international standards,” Okunbor stated.
Nigeria has suffered tremendous losses resulting from oil spills and pipeline vandalism. The effects of pipeline vandalism among others include huge economic losses from pipeline and plant shutdown, environmental pollution, fire outbreaks usually resulting in loss of lives.
Scarcity and shortage of petroleum products as well as decrease in electricity supply with the attendant socio-economic problems can also be attributed to pipeline vandalism.
In Nigeria petroleum and associated products are transported through extensive network of pipelines that run across different locations throughout the country from remote to populated areas.