Shell opens up on crude oil theft in Nigeria


A highly organised and well funded criminal enterprise operating on a large scale is responsible for the billions of dollars being lost yearly in stolen crude, a new report by Anglo Dutch oil giant, Shell has said.

The Federal Government estimates that at least 150, 000 barrels of crude oil is stolen daily from pipelines in the Niger Delta by those operating illegal refineries and those who actually export.

The Nigeria Extractive Industries Transparency Initiative, in its report of the oil industry audit for 2009 to 2011 estimated that $10.9 billion (N1.74 trillion) was stolen from the country.

According to the Shell report: “It may never be possible to assess the exact figures, but it’s clear that a well financed and highly organised criminal enterprise exists on a phenomenal scale – a parallel industry – with a supply chain to export crude oil overseas that includes loading and shipping operations.

The report released over the weekend maintained that most of the stolen oil ends up in ocean-going tankers that transport it to refineries in other parts of West Africa, Europe and beyond.

“Those involved – both in Nigeria and outside – mastermind this multibillion- dollar business using influence, corruption and violence to protect their interests,” it said.

The report also said that there are also small scale, makeshift refineries producing low-grade fuel for local use noting that “these primitive operations cannot use the heavier parts of the crude, which is dumped, destroying the mangroves and riverside areas where these activities take place.”

It maintained that: “It’s also impossible to know how much of the stolen oil is spilled once it is taken from our facilities. But we can estimate that 26, 000 barrels of oil were spilled in the area immediately surrounding our pipelines and other facilities in 2012, of which around 95 per cent was the result of sabotage and oil theft.

The report said stemming and reversing this menace requires coordinated action, both at the national and local level and at a regional and international level outside the country.

It said the nation needs to do more to encourage investment in the power sector to ensure reliable electricity supplies to reduce demand for illegally refined local diesel.

The report also said that the Niger Delta continues to be a challenging place to operate for many reasons, adding that there is a fundamental lack of basic infrastructure in many areas, with poverty, lack of employment opportunities, widespread criminality and other factors all contributing to the social and economic crisis in the region.


Original Article