Amid the growing concern of continuous theft of crude oil in Nigeria, Shell Petroleum Development Company of Nigeria Limited has said its existence in the country is being threatened.
According to Mr Osagie Okunbor, the company’s managing director and country chair for Shell Companies in Nigeria, this has resulted in the shutdown of two of its major pipelines.
Speaking at the just-concluded Nigeria Oil and Gas (NOG) Conference, he said oil theft was one of the reasons that Nigeria could not meet its quota of 1.8 million barrels a day instituted by the Organisation of the Petroleum Exporting Countries (OPEC) as it has recorded a constant drop in its production numbers.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in,” Mr Okunbor said without giving details at the forum.
“It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry,” the energy expert said.
Shell has operated for decades in Nigeria and together with other oil majors, is selling onshore assets to focus on deep water drilling.
Mr Okunbor said local companies which won licences to develop marginal fields would face challenges to transport their crude once they start production.
Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.
Oil theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.
The worsening state of Africa’s largest oil producer manifested in numbers recently as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria lost $1billion in revenue during the first quarter of this year due to crude oil theft.
According to Mr Gbenga Komolafe, the head of the commission, out of the 141 million barrels of oil produced in the first quarter of 2022, only about 132 million barrels of oil were received at export terminals.
SOURCE: businesspost.ng