According to the local Shell manager, crude oil theft in Nigeria poses an existential danger to the nation’s oil industry and has forced the closure of two of its key pipelines.
Oil theft, according to Osagie Okunbor, managing director and country chair for Shell Companies in Nigeria and Shell Petroleum Development Company of Nigeria Limited, is one of the causes of Nigeria’s inability to satisfy its 1.8 million barrels per day OPEC quota.
Without going into further detail, Okunbor stated that “two of our most critical pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in.”
The truth that theft poses an existential danger to this business whether as a stand-alone problem or as a means of achieving our OPEC quota, cannot be denied.
According to the petroleum regulator’s statement from last week, oil theft cost Nigeria $1 billion in income during the first quarter of this year.
In order to concentrate on deep-sea drilling, Shell is selling its onshore assets in Nigeria together with other oil companies. Shell has been operating there for decades.
Okunbor predicted that once local businesses with licenses to develop marginal resources begin production, they would have trouble transporting their petroleum.
Smaller offshore or onshore oil blocks known as marginal fields are often developed by regional businesses.
Oil theft has led to the Bonny Oil & Gas Terminal, a pipeline transferring crude from the oil-rich Niger Delta to export vessels, among others, declaring a state of force majeure, creating a hostile climate and deterring investors.
