Shell Says Losing 43,000 Bpd to Nigeria Oil Theft

Source: Reuters 5/14/2012, Location: Africa

Shell's Nigeria joint venture is losing 43,000 barrels a day (bpd) of crude oil to theft, while deliberate damage to pipelines accounted for more than three quarters of oil spilt last year, the oil major said.

Shell has increasingly complained in recent months about bunkering tapping into pipelines to steal the oil, which it says is on the rise in Nigeria. The company wants a greater security crackdown on the practice, which it has estimated deprives the country of some 150,000 bpd.

"The Shell Petroleum Development Company of Nigeria (SPDC) suffers a daily loss of at least 43,000 barrels to crude theft and illegal bunkering, in a trend that negatively impacts the environment, robs the country of badly-needed revenue and fuels criminality in communities," SPDC spokesman Precious Okolobo said in a statement on Monday. SPDC is a Shell-run joint venture between Nigeria's state oil firm, Shell, EPNL and Agip.

Okolobo added that bunkering had been the cause of "11,806 barrels spilled from SPDC facilities in 118 incidents," last year. Pipeline sabotage by militants campaigning for a greater share of oil revenues, or by local criminals looking to benefit from clean-up contracts, are common in the delta, a network of creeks and wetlands where the Niger river empties into the Atlantic, and where Nigeria's oil industry is based.

"This is a serious attack on the state - the people, the economy, and the environment," SPDC Managing Director, Mutiu Sunmonu in the statement.

"We calculate crude theft quantities based on volumes produced from flowstations and what is received at terminals (but) additional oil is stolen between wellheads and flowstations," he added.

Shell said it found two fresh onshore oil pipeline leaks in the delta last week, three days after the company declared force majeure on exports of the high grade Bonny Light crude due to outages caused by oil theft. An amnesty in 2009 sharply reduced militancy in the Niger Delta, but bunkering has if anything worsened since then, oil companies say.

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