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Shell says crude oil theft is reducing

By on May 10, 2013

Nigerian unit of Anglo-Dutch oil giant, Shell, has admitted that the spate of crude oil theft from its facilities in the Niger Delta is reducing, a development he attributed to the surveillance of the Joint Task Force, JTF, set up by the Nigerian Government to check the menace.

Shell had constantly complained about the high incidence of pipeline vandalism and crude oil theft, resulting in revenue losses estimated at over $10billion annually. The company had in fact, recently threatened to shut down its operations if the nothing was done to contain it urgently.

Furthermore, Shell has declared more force majeure since the year began than any other oil major operating in Nigeria, a legal clause that absolves it from contractual obligations for failure to meet supply agreements.

However, speaking on the sideline of the Offshore Technology Conference, OTC 2013, in Houston Texas, USA, the Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu said, “certainly it was on the increase a few months ago, but I can also tell you, I have seen increased attention by the government security agencies, the JTF, Navy, really moving in to stem the tide. So I wouldn’t say I am happy, but I can see improvement in the responsiveness of the government security agencies.”

The Shell boss refused to quantify, as he regularly did in the past how much oil had been saved since the JTF swung into action, but rather said, “I will be in a position to tell you when our Nembe creek trunkline is back up, but right now, that line is down. Like I said, we are removing the bunkering points from that line, once all those bunkering points are removed, and the line is up and running, we will then be in a position to judge how much oil we are still losing. But right now, whatever figure, I give you, is really going to be artificial.”

For him, what is most important is the fact that the JTF is getting more and more effective. “We are having almost a daily discussion with them and they do give us good reports on their efforts so far. I have been in discussion personally myself with the Chief of Naval Staff and the Chief of Army Staff and they have all given their commitments to work with oil the companies to stem the tide.

“We are seeing progress, but like I tell you, this is a very big operation, so I am not expecting solution over night, but what I am expecting is that government security agencies will really keep at what they are doing now. If they keep at it for a while, I am sure we will begin to see a significant reduction.

“There is hardly any day that they foiling attempt, they are arresting vessels, they are destroying illegal refineries. In a place like Bodo for instance, in a week or two ago, they foiled over 30 different attempts by crude oil thieves wanting to attack additional tamping point to our line. We see all these successes everyday, but we just need to keep at it, because you cannot afford to take your eyes off the ball.”

As far as the force majeure is concerned, Sunmonu noted that this will keep up for a while until “we fully recover because even with all the efforts that government security agencies are putting in, there are some steps we need to take together jointly in order to make sure the effects are not continuing.

“So the force majeure that you have seen declared is for us to some of the very bad bunkering points that have been put on the line, because we don’t remove them, even if you have the whole Nigerian Army in the creek, you still continue to see crude being stolen. So our initial attempt is to remove those bunkering points to compliment what the security agencies are doing.”

 

 

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