Shell May Shut Nigerian Oil Pipeline After “Unprecedented” Levels Of Thefts
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Royal Dutch Shell’s Nigerian division has warned that it may permanently shut down a 150,000 barrels per day pipeline along the Niger Delta, after complaining that it was losing billions of dollars a year from rampant thefts and vandalism, which have climbed to “unprecedented” levels in the last weeks, reported Reuters.
Royal Dutch Shell’s Nigerian division has warned that it may permanently shut down a 150,000 barrels per day pipeline along the Niger Delta, after complaining that it was losing billions of dollars a year from rampant thefts and vandalism, which have climbed to “unprecedented” levels in the last weeks, reported Reuters.
The Nembe Creek trunkline is one of Nigeria’s most important production routes and was replaced in 2010 at a cost of $1.1 billion, Shell says. However, Shell Nigeria managing director Mutiu Sunmonu said that the the company was ready to cut its losses – estimating that over 60,000 barrels of oil a day was lost as a result of theft.
Sunmonu believed that criminal gangs in Nigeria were now adopting increasingly sophisticated methods thanks to support from international syndicates. According to Sunmonu, the thieves had built up infrastructure around their operations, including shipyards to build barges to transport stolen oil and facilities to store it.
[quote]”It is getting to the crunch that rather than allow people to continue to attack my pipeline and devastate the environment, I may actually consider shutting in the pipeline completely,” he said. “The situation in the last few weeks is unprecedented. The volume being stolen is the highest in the last three years…”[/quote]“So, if you look at all of these, it is very clear to me that this is not just an act by desperate individuals trying to make a living. This certainly is a well funded criminal activity, probably involving international syndicates,” Sunmonu told reporters in Nigeria, as cited by The Financial Times.
The last time the Nembe trucline was shut down was in May last year to allow for the removal of more than 50 crude theft points. Sunmonu blamed damages caused by thieves for most of the spills in the Niger Delta, though activists argue that the company has not done enough to prevent such incidents and effectively clean up the damage when they do occur.
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James Clinton Francis, a researcher at Eurasia Group, told FT: “The statement from Shell doesn’t come as a surprise. We have noticed an uptick in pipeline theft. A lot of people are focused on Boko Haram now, but Nigeria still has major security problems in the Delta.”
Lieutenant Colonel Onyema Nwachukwu, a spokesman for Nigerian forces in the Niger Delta, added that oil theft had been on the decrease – citing nearly 2,000 suspects arrested since last year – and accused Shell for failing to seal numerous ruptures on pipelines despite being alerted.
“Till date, the SDPC (Shell Petroleum Development Company of Nigeria) has done nothing to salvage the situation and yet it is issuing undue threats of shutting down … The JTF (Joint Task Force) does not have the expertise to clamp them, SPDC does,” Nwachukwu said.
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Sunmonu nevertheless called for greater local and international cooperation, urging the government to increase surveillance of the pipelines.
[quote]”This is something which I worry is beyond the capacity of any individual company or beyond the capacity of a country to solve. We really need concerted efforts nationally, locally and internationally to actually get this under control,” he said.[/quote]
