Oil theft in Nigeria is now an ‘existential threat’ to oil companies
The Managing Director of Shell Petroleum Development Company of Nigeria Ltd, Mr Osagie Okunbor, said the incessant incidents of oil thefts in Nigeria’s Niger Delta has become an existential threat to oil companies.
Disclosing this on Wednesday while speaking at the ongoing Nigerian Oil and Gas (NOG) conference, the MD revealed that the problem has caused the company to shut down two of its major pipelines.
He further claimed that oil theft is one of the major reasons Nigeria has persistently failed to meet its OPEC+ oil output quota 1.8 million barrels a day.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in. It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry,” Reuters quoted Mr Okunbor to have said.
Note that Shell is not the only oil company in Nigeria that has complained bitterly about the negative impacts of oil thefts. Earlier this year, some notable stakeholders in the Nigerian oil and gas sector voiced their frustrations.
A recent report by Austin Avuru, the former CEO of Seplat, warned that oil production in Nigeria was in an emergency, critical state due to oil theft. And he wasn’t wrong.
Just last week, the Nigerian Upstream Petroleum Regulatory Commission disclosed that the country lost a whooping $1 billion to oil theft in Q1 2022 alone.
In February, Gbenga Komolafe who serves as CEO of the Nigerian Upstream Petroleum Regulatory Commission, hinted at an ambitious security measure by the government to curb the problem. Business Insider had quoted him to have assured that “pretty soon you will see a reverse in that trend”.
But it’s been months since this assurance was given, yet the problem persists.
