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Nearly $1 billion in Nigerian oil stolen from Nigeria last year

By Catholic Online (NEWS CONSORTIUM)
3/14/2014 (2 years ago)
Catholic Online (www.catholic.org)

Security in Africa's largest oil producer is a daily challenge and oil theft 'very material'

Nigeria, Africa's largest oil producer, faces rampant oil theft. Security there is slim to nonexistent, and the amount of oil and related products are very material and substantial. Royal Dutch Shell RDSa.L lost nearly $1 billion due t theft. Theft and various disruptions to it's the nation's oil and liquefied natural gas operations lat year is costing the country dearly.

While criminals who tap crude from pipelines for local refining are among the most common means for oil theft, stolen oil also leaves Nigeria in tankers.

While criminals who tap crude from pipelines for local refining are among the most common means for oil theft, stolen oil also leaves Nigeria in tankers.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
3/14/2014 (2 years ago)

Published in Africa

Keywords: Nigeria, oil theft, deepwater, Africa


LOS ANGELES, CA (Catholic Online) - Updating investors on its strategy, the Anglo Dutch company says that proposed Nigerian legislation had curbed investment and has hindered production.

Nigeria is highly important for Shell. The African nation provides almost 10 percent of the company's output and is seen as a source of future growth. In its annual report, Shell said that some risks of working in Nigeria had worsened.

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The Nigerian Petroleum Industry Bill, or PIB, a piece of legislation several years in the making, has not passed. If it is passed, it could change the terms for foreign oil companies in the country.

"There are at least three to four different versions of it and most of them have been unhelpful to supporting future investments in the country," Simon Henry, Shell's chief financial officer, says.

"Therefore the industry at large has taken almost no significant investment decision in that six, seven-year period. So the country's four million barrel-a-day target has effectively become actual production of less than 2 (million bpd)."

Nigeria produced about 1.9 million bpd in February, according to OPEC figures.

While criminals who tap crude from pipelines for local refining are among the most common means for oil theft, stolen oil also leaves Nigeria in tankers.

"The theft is very material," Henry said. "Figures have been quoted up to a billion dollars a month being stolen from the government, in effect, and that figure is probably accurate."

Shell's Nigerian oil and gas output averaged 265,000 barrels of oil equivalent per day in 2013, down 100,000 bpd from 2012 and equal to about eight percent of total supply of 3.2 million bpd.

Shell is currently in the process of selling some onshore Nigerian oil blocks. The company views Nigeria as a source of longer-term growth. Henry says Shell would continue to invest in gas and deepwater projects.

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