Nigeria’s Shell losing $560,000 a day to oil thieves

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A Shell employee at the Afam VI power plant takes a picture at the plant in Port Harcourt on September 29, 2015. Afam VI power plant is owned by the Shell Petroleum Development Company of Nigeria (SPDC) and maintained by Dietsmann company. Nigeria is Africa's largest producer, accounting for roughly two million barrels of crude daily. Shell has blamed repeated oil thefts and sabotage of key pipelines as the major cause of spills and pollution in the oil-producing region. AFP PHOTO / FLORIAN PLAUCHEUR (Photo credit should read FLORIAN PLAUCHEUR/AFP/Getty Images)
Locals pour containers of oil collected from an abandoned oil flow station operated by Royal Dutch Shell Plc in K-Dare, Nigeria, Photographer: George Osodi/Bloomberg via Getty Images

Shell’s subsidiary in Nigeria says the oil giant is losing 10,000 barrels of oil a day to thieves in the West African nation – at a cost of $560,000 (£452,000) a day.

The losses by vandals attacking oil pipelines in the southern Niger Delta are equivalent to $204.4m over a year.

The announcement was made by Igo Weli, general manager of the Shell Petroleum Development Company of Nigeria (SPDC), which is a joint venture between Shell and the Nigerian government.

“These attacks were on critical assets that produce the crude oil, which accounts for over 90% of Nigeria’s foreign exchange earnings and the bulk of government revenue,” Mr Weli is quoted as telling a workshop on pipeline vandalism in the oil city of Port Harcourt on Monday.

Since 2012 he said the company had discovered and removed 1,160 points where thieves were stealing the oil.

But this did not seem to be stemming the problem as 9,000 barrels a day were being stolen in 2017, 11,000 last year and 10,000 this year.

Mr Weli was also critical of a lack of development in the Niger Delta, where most people remain poor despite the vast wetlands rich oil resources.

“There is a community in the Niger Delta that has received over 2bn naira ($5.5m, £4.5m) from SPDC joint venture for its development, but is yet to develop,” the Premium Times quotes him as saying.

“The region receives 13% derivation, revenue from NDDC [the Niger Delta Development Commission government agency] and funds from companies, but still has not developed,” he said.

“The Niger Delta has refused to develop despite the huge monies allocated to the area. So, we need to ask ourselves the critical questions to change the Niger Delta narratives.”

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