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Shell threatens to shut down Nigeria operations over rising oil theft.

With oil theft and sabotage leading to lost production and costing Nigeria some US$6 billion annually, the Managing Director of the Nigerian subsidiary of Anglo/Dutch company, Shell Petroleum Development Company (SPDC), Mr. Mutiu Sunmonu, has threatened to shut down the company's operations in Nigeria over rising cases of oil theft.

aACoeWe have now witnessed a significant upsurge in the activities of crude oil thieves. The situation in the last few weeks is unprecedented. The volume (of crude oil) being stolen is the highest in the last three years. Over 60, 000 barrels per day from Shell alone. So, that, for me, is a great concern,'' the local media Monday quoted him to have said.

aACoeOver time, this whole crime has got a lot more sophisticated and you could see that the perpetrators are now setting up barge building yards; they are setting up storage facilities; they are setting up tank farms for storing the crude oil, prior to shipping out,aACA[yen] he added.

Addressing journalists in the oil city of Port Harcourt Sunday, the Shell noss said the theft ''is well-funded and heavily-armed gangs''.

He said the Nigerian military force deployed to the oil region, under the military Joint Task Force (JTF), needed to step up its game curtail the activities of the oil thieves.

aACoeIf you look at what happened between July, August and November and probably December last year, we saw a significant drop in the amount of crude oil that was being stolen. But in January and February this year, it has gone back up.

aACoeSo, that is a challenge for the JTF to also look into. I mean, let us not underestimate the cleverness of the people who are perpetrating this act. I have always said with 6, 000-kilometre network of flow-lines and pipelines, even if you throw the entire Nigerian army into the creeks, it is not going to solve the problem.

aACoeSo, I am sure these guys are monitoring what is going on. They are moving to areas of resistance. So, it is a combination of things, but certainly we have seen that when the JTF really went after it, we got results.

Though the militancy in the Niger Delta oil region has reduced drastically due to the successful Amnesty Programme of the federal government, the gains have been wiped off by rising cases of oil theft.

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Publication:African Manager
Geographic Code:6NIGR
Date:Mar 4, 2013
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