Nigeria’s biggest crude oil explorer and a subsidiary of Royal Dutch Shell Plc, Shell Nigeria, has lamented the adverse effects of vandalism on its operations. These attacks are responsible for reduced output by the company, which in turn prevents it from taking advantage of the relatively improved global crude oil prices.
The company’s Manager of External Relations, Mr Igo Weli, said the Niger Delta region remains prone to such criminal activities such as vandalism, kidnapping, and piracy despite efforts put in place to clamp down on militancy back in 2016.
“Facilities operated by both indigenous and international oil companies continue to be vandalized by attacks and other illegal activities such as crude-oil theft,” he said by email. “We are continuing to monitor the situation to mitigate any exposure and minimize risks faced by our personnel.” -Weli
Following reported pipeline leaks last month by the Guardian, Shell Nigeria declared force majeure on the shipment of crude, even as they also delayed loadings of Forcardos exports. Although Weli did not link the incidents to vandalism, possibilities abound that the pipeline leaks were due to the activities of vandals.
Recall that Nigeria’s Niger Delta region accounts for much of the country’s black gold output. Unfortunately, it currently facing a myriad of problems ranging from environmental/health hazards and insecurity.
In 2016, Niger Delta militants, who were agitating for resource control, staged a series of deadly attacks on oil companies’ facilities. This impacted negatively on their output, and by extension, the country’s daily crude output which diminished to less than 1.4 million barrels.
In 2017, Shell Nigeria single-handedly produced an average of 631,000 barrels of crude per day which amounted to about a third of Nigeria’s production. They also reported a total of 60 cases of sabotage/theft the same year.
Nigeria will produce about 1.8 million barrels of crude per day come next month. This is in line with a production cap agreement reached with the Organization of Petroleum Exporting Countries (OPEC).
In the meantime, global crude oil prices have remained relatively favourable despite slight decreases recorded in recent days. Global benchmark, Brent crude, had declined by 7% to $74, down from the $80 price mark which the commodity traded mid last month.
