Shell threatens shutdown, alleges crude oil theft increasing astronomically under Jonathan

crude oil theft

Shell said it is witnessing an “unprecedented” level of crude oil theft in Nigeria.

The failure of the federal government to provide adequate security to crude oil facilities is causing so much loss that Nigeria’s largest crude producer has threatened to shut down its facilities.

Global oil giant, Shell, the largest producer of Nigerian crude, said on Sunday that it has witnessed a sporadic rise in crude oil theft in the last three weeks than it witnessed in the past three years.

“We have now witnessed a significant upsurge in the activities of crude oil thieves. The situation in the last few weeks is unprecedented.

“The volume (of crude oil) being stolen is the highest in the last three years. Over 60, 000 barrels per day from Shell alone,” Mutiu Sunmonu, the Managing Director of Shell Petroleum Development Company of Nigeria Limited, lamented to journalists on Sunday.

Mr. Sunmonu said apart from the astronomical rise in crude oil theft, the perpetrators have also become emboldened and more sophisticated.

“Over time, this whole crime has got a lot more sophisticated and you could see that the perpetrators are now setting up barge building yards; they are setting up storage facilities; they are setting up tank farms for storing the crude oil, prior to shipping out,” he said.

The kingpins

The Shell boss said the perpetrators of the act were more than just community members resident in the areas where the facilities are located.

“This is beyond communities. This is well-funded and heavily-armed gangs. What type of collaboration with communities will help you against people carrying guns, people who are very well armed? It is a reality that we have to face. You cannot even put the poor boys in the communities at risk,” he said.

This is the second time in two weeks that the Shell boss is raising alarm over the unprecedented level of crude oil theft in Nigeria.

On February 20, at the Nigeria Oil & Gas, NOG 2013 Exhibition and Conference, hosted in Abuja by the Federal Government, Mr. Sunmonu advised President Goodluck Jonathan to focus more on tackling the sponsors of crude oil theft rather than travel to Europe to seek the assistance of foreign countries to help prevent sale of the stolen crude.

Mr. Jonathan had earlier travelled to France and the U.K. to seek the two countries’ support in preventing the lodgment of funds gotten from sale of stolen Nigerian crude in their fiancé institutions.

Mr. Sunmonu had said while that step was good, it was not the most needed one.

“The truth is that the small (criminals) in the creeks of Niger Delta bursting pipelines and stealing crude oil are not working for themselves.

“Like the drug cartels around the world, they are being sponsored by big principalities and powers in high places, which the government should go against if the fight against crude oil theft is to be won,” he said.

JTF should do more

The oil company boss, who commended the efforts of the Joint Task Force, JTF, in curbing crude oil theft said more needed to be done if the battle would be won.

“They (JTF) need to step up their game. If you look at what happened between July, August and November and probably December last year, we saw a significant drop in the amount of crude oil that was being stolen. But in January and February this year, it has gone back up.

“So, that is a challenge for the JTF to also look into. I mean, let us not underestimate the cleverness of the people who are perpetrating this act. I have always said with 6, 000-kilometre network of flow-lines and pipelines, even if you throw the entire Nigerian army into the creeks, it is not going to solve the problem,” he said.

Mr. Sunmonu also said the oil thieves were probably monitoring the activities of the security officials.

“So, I am sure these guys are monitoring what is going on. They are moving to areas of resistance. So, it is a combination of things, but certainly we have seen that when the JTF really went after it, we got results,” he said.

Nigeria is in a crisis

The rate of the crude oil theft has become so endemic that Nigeria can be said to be in a crisis, the Shell boss stated.

He said the problem may have even gone beyond the capacity of the federal government to solve.

“It is very clear to me that this is not just an act by desperate individuals trying to make a living. This certainly is a well-funded criminal activity, probably involving international syndicates.

“We are in a crisis. We are in a crisis as a country, because this is something which is beyond the capacity of any individual company or beyond the capacity of a country to solve,” he said.

He added that, “We really need concerted efforts locally, nationally and internationally to actually get this under control. It is really going to cause a big devastation, but I really worry about crude oil theft.”

Shell may shut down

Mr. Sunmonu, who commended President Jonathan and the Petroleum Minister, Diezani Alison-Madueke for their commitment to reducing crude theft, said the increased crude theft could also lead to environmental disaster in the Niger Delta region.

“Frankly speaking, my worry is not about the economy per se; the economy itself is huge, but I worry more about the devastation.”

“The devastation for the people of Niger Delta, the destruction it will cause to the social and environmental aspects of the people of the Niger Delta and to Nigeria as a whole; we are in a crisis and I cannot as MD of SPDC, in all good conscience, just continue to put my head in the sand,” he said.

Despite the repeated claims by the Nigerian Government that crude oil theft has reduced, Mr. Sunmonu, whose company is directly involved, stated otherwise.

The Group Executive Director, Exploration & Production, of the Nigerian National Petroleum Corporation, NNPC, Abiye Membere, at the oil and gas conference, said the federal government had achieved a major reduction in stolen crude with the figure now hovering between 50,000 and 80,000 barrels per day.

Nigeria is estimated to lose about $6 billion (N900 billion) annually to stolen crude.

Mr. Sunmonu said his company alone loses about 60,000 barrels daily to crude oil criminals and may be forced to shut down if the tide is not stemmed.

“This is really getting to the crunch, I must say. It is getting to the crunch, that rather than allow people to continue to attack my pipelines and devastate the environment.

“I may actually consider shutting-in the pipeline completely. So, it is getting to that crunch point and I hope that every hand will really join us in actually getting this under control,” the Shell boss stated.

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