Crude Oil Theft: Nigeria loses USD1.23bn in Q1 2013
…as NNPC Explains Drop in Crude Oil Production
By Joseph BAMIDELE
FOLLOWING the incessant activities of crude oil thieves, Nigeria has lost about 1.23 billion dollars in first quarter 2013 alone,accounting for 150,000 barrels of daily crude production. This is coming just as the Shell Petroleum Development Company of Nigeria shut down the Nembe Creek Trunkline (NCTL) on Monday (15th April) to remove crude oil theft connections and investigate suspected oil theft leaks. Production of some 150,000 barrels of oil per day has been deferred due to the shutdown. As a result, SPDC has declared force majeure on Bonny Light export. In a swift response The Nigerian National Petroleum Corporation has announced a drop in crude oil production for the first quarter of 2013, a development it blames on incessant crude oil theft and vandalism along the major pipelines within the Niger Delta region.
According to the NNPC’s Tumini Green Daily crude oil production during the period fluctuated between 2.1 and 2.3 million barrels per day (mbpd) compared with the projected estimate of 2.48mbpd.
“Expectedly, this fall between actual production and forecast in first quarter 2013 has resulted in a drop in crude oil revenue of about $1.23 billion (N$191 billion) that should have accrued to the Federation Account,” she explained.
She further explained that the NNPC/SPDC JV recently declared a force majeure on Bonny Crude due to incessant crude oil theft. This resulted in the shutting in of 150,000 bpd.
“Investigations showed that 53 break points were discovered along the 97km Nembe Creek Trunkline. Repair work is expected to last about six weeks. This will further reduce our April and May monthly average to about 2.2mbpd and further decrease crude oil revenue by about $554.0 million (equivalent to N83billion) that should have accrued to the Federation Account.
Green, however, assured that the maintenance work will have minimal effect on gas supply to domestic market.
“We shall continue to work with relevant government agencies both at the Federal and State levels to end this incessant crude oil theft and pipeline vandalism. We have the potential to meet the national target of 2.48mbpd if this menace is eliminated, she said, adding that crude theft and pipeline vandalism continue to degrade the environment, increase operational costs, impact negatively on the image of the country and of course, reduces revenue accruable to the nation.
She appealed to all stakeholders to join hands with the Corporation as it strives to eliminate this menace.
SPDC shuts down NCTL to remove oil theft points
In a related development The Shell Petroleum Development Company of Nigeria Ltd (SPDC) shut down the Nembe Creek Trunkline (NCTL) on Monday (15th April) to remove crude oil theft connections and investigate suspected oil theft leaks. Production of some 150,000 barrels of oil per day has been deferred due to the shutdown. As a result, SPDC has declared force majeure on Bonny Light export.
“We’re concerned that the NCTL has been targeted by crude oil thieves repeatedly since we installed the new line in 2010 at a cost of $1.1 billion,” said Managing Director of SPDC & Country Chair, Shell Nigeria, Mutiu Sunmonu. “The current exercise aims to remove a significant number of oil theft connections and repair any leaks on the pipeline. We recognise efforts by the security forces to contain the crime, and SPDC will work with them during the shutdown to clear illegal connections on the NCTL.”
The 97-kilometre NCTL has been closed several times as a result of crude oil theft leaks and fires between December 2011 and May 2012.
Mr. Sunmonu added: “Crude theft continues to affect people, the environment and the economy, and urgent action is needed by all stakeholders to tackle the problem.”