Smugglers steal 150,000 barrels of oil daily – Shell

Channels Television  
Updated February 21, 2012

Organized crime syndicates in Nigeria are stealing about 150,000 barrels of oil daily from the maze of pipelines crisscrossing Nigeria, an executive with Royal Dutch Shell PLC (RDSA) said at a gas conference in Abuja on Tuesday.

Even after the end of a decades-long conflict with oil militants, and as Nigeria’s oil production returns to pre-conflict levels, the country is struggling to squash an increasingly mafia-like network of oil smugglers, whose crude is tapped from pipelines and sold on international markets, said Sub-Saharan Africa Executive Vice President Ian Craig for Shell Upstream International, the exploration and production arm of the oil company.

Along with the increasingly sophisticated deep water technology, the theft is pushing major oil producers like Shell to seek oil blocks farther off-shore in Nigeria, where oil production facilities are safe from both theft and much of the regulation Nigeria applies to on-shore platforms.

On a single pipeline, Mr Craig said his company observed 50 illegally-installed valves where thieves tapped oil, along with “industrial scale illegal refineries with major, major environmental impact.”

With Nigeria’s daily output currently estimated at 2.4 million barrels, the shadow bunkering industry would account for one out of every sixteen barrels of oil the country drills.

“Some countries aspire to that level of production,” the Shell executive said.

The company is considering another 200 wells and three platforms in Nigeria, particularly across Nigeria’s “substantially understated” off-shore reserves, he said.

“Nigeria has the resources to attract hundreds of billions of dollars in oil investment,” he said. “Nigeria’s deep-water development has been impressive, but when compared to Angola, it is clear the level of development is far below Nigeria’s full potential.”