Anglo-Dutch oil giant, Shell is threatening to shut down its operations in Nigeria as a result of massive crude oil thefts and bunkering in the Niger Delta.
The Managing Director of its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), Mr Mutiu Sunmonu, said: “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. So, that, for me, is a great concern.
“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.”
Sunmonu who made this statement to reporters in Port Harcourt yesterday, admitted that this was not entirely the work of host communities, but also of well-funded and heavily armed gangs and criminal networks.
He said: “This (oil theft/illegal bunkering/illegal refining) 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.
“They (the Joint Task Force (JF) operatives) 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.
“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.
“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.
“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. 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.
“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.”
Sunmonu commended the efforts of President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs Dieziani Allison-Madeuke in tackling crude oil theft in the Niger Delta and other parts of Nigeria.
All the International Oil Companies (IOCs) operating in the Niger Delta are said to be losing thousands of barrels of crude oil and huge revenue.
SPDC, the Nigerian Agip Oil Company (NAOC), Chevron, Mobil, Addax and other companies are badly affected by the activities of the criminals.
In Nembe creeks in Bayelsa State, Krakrama and Awoba in Kalabari axis of Rivers State, as well as areas close to coastal Bonny, also in Rivers State and other parts of the Niger Delta, the illegal bunkerers and oil thieves are having a field day with the illegal bunkering points said to be close to JTF’s outposts. At such places, stolen crude oil is refined to produce mostly diesel.
Most hit by the illegal bunkering is SPDC’s Nembe Creek Trunkline (NCTL), resulting in frequent production shutdown and massive oil spills.
Between February 22 and 25, 12 Shell’s flow stations producing into the NCTL, were shut down by safety systems three times, due to oil theft. Each incident resulted in deferment of 150,000 barrels of crude oil per day.
Though the NCTL was replaced in 2010, at $1.1 billion, the new line has been repeatedly targeted by crude thieves. This forced a shut down for one month in December, 2011, following a spill caused by two failed crude theft connections.
When the NCTL was reopened in January, last year, it also suffered multiple trips, caused by pressure drops, resulting from illegal off-take. The trunkline was eventually shut down on May 2, last year to allow for the removal of more than 50 crude theft points.
It was also gathered that last month, thieves drilled a hole on SPDC’s gas pipeline, which was buried underground, some two kilometres from Soku gas plant in Rivers State. It was shut down for repair, with force majeure declared on gas supplies to the Nigerian Liquefied Natural Gas (NLNG) Company in Bonny on February 5.
In 2012, sabotage and crude oil theft were the causes of 24,500 barrels spilled from SPDC facilities from almost 140 incidents, accounting for about 95 per cent of the total spilled volume during the period.
JTF spokesman Lt. Col. Onyema Nwachukwu, has however denied its operatives’ involvement in the crime, saying that Operation Pulo (oil) Shield had been combating oil theft and illegal bunkering.
He said, “JTF is fighting a good fight in combating the hydra-headed menace of crude oil theft and illegal bunkering in the Niger Delta. This is evident in the number of successful interceptions and arrests that we have made, not only in the immediate past year (2012), but even in the two months that we have spent in this year.
“Last year alone, 7,585 anti-illegal bunkering patrols were conducted. 18 vessels and 1,945 suspects were arrested; 4,349 illegal crude oil distilleries were destroyed. Also destroyed were 133 barges, 1,215 open-wooden boats (Cotonu boats), 187 oil theft tanker trucks, 178 illegally-distilled fuel dumps and 5,574 surface tanks.
“In addition, 36,504 drums of distilled petroleum products, 638 pumping machines and 326 outboard engines were seized. JTF is not relenting. So far, in 2013, we have arrested 260 suspects, eight vessels, nine barges and 90 open-wooden barges. We have scuttled 452 distilleries/cooking spots of stolen crude oil.
“It is, therefore, quite difficult to reconcile the upsurge spoken of, given these achievements. Our patrol troops have often times reported incidents of ruptures on the pipelines, whenever they find one and, as we speak, there are still a good number of those ruptures left unclamped in Dasaba and Mekakiri creeks.”
Lt. Col. Nwachukwu added that the JTF lacked the manpower to put operatives permanently on over 6,000-kilometre pipelines, mostly in the mangroves.
The continuous theft has an immediate impact on the economy, with the activities of the criminals being a serious attack on the people, the economy and the environment with investigations revealing that only 95 per cent of the revenue from each barrel of crude oil goes to the Federal Government.