The Royal Dutch Shell has decried the incessant increase in pipeline vandalism and crude oil theft at its facilities in Nigeria. In 2018, the company lost 4.015 million barrels of crude oil due to the problem. This amounted to $260.5735 million.
This was made known recently by Mr. Igo Weli, the General Manager in charge of External Relations of the Shell Petroleum Development Company (SPDC) who spoke at a workshop in Lagos.
According to him, attempts to restrain pipeline sabotage will go a long way to save lives, protect the environment, and secure communities.
A worrisome trend: While speaking on Pipelines Right of Way Encroachment and Vandalism, Mr Weli said that the spill rate of sabotage has risen steeply since 2017, while the crude oil theft from the SPDC Joint Venture’s pipeline network averaged 11,000 barrels per day in 2018. He also noted that this marks an increase of about 20% over the previous year.
“The number of sabotage-related spills increased in 2018 to one hundred and eleven, compared to the 62 recorded in 2017 and, since 2012, SPDC has removed more than 1,600 illegal theft points.”
Weli further stressed that in 2018, Shell’s cumulative loss through 11,000 barrels per day hit 4.015 million barrels. With the average price for crude oil in 2018 at $64.9 per barrel, the 4.015 million barrels amounted to $260.5734 million.
Cleanup and Remediation: Also present during the workshop was Shell’s General Manager, Safety and Environment, Chidube Nnene-Anochie, who said that irrespective of the cause for the loss, SPDC cleans and remedies regions impacted by spills from its facilities.
“SPDC implements work programs to appraise condition of, maintain and replace key sections of pipelines and flow lines. In 2018, for instance, we installed 70 kilometres of pipelines and 188 kilometres of flow lines and pipelines. Over the last 7 years, the company has replaced approximately 1,300 kilometres distance of flow lines and pipelines.
“In line with industry regulations, SPDC only pays compensation if the spill is operational.”
He further claimed that SPDC is actively committed to the cleanup of Ogoni Land which was messed up by the activities of oil exploration companies.
Furthermore, he stressed that the company is fully committed to providing its share of $900 million (N283.73 billion) over 5 years to the Ogoni Trust Fund (OTF) as stated in the Hydrocarbon Pollution Remediation Project (HYPREP) journal and the agreed governance framework.
Bottom line: Pipeline vandalism is a serious problem facing the Nigerian oil sector. It requires an urgent solution. If the necessary authorities could make conscious efforts to curb the rate of pipeline vandalism and crude oil theft in the sector, the loss rate would reduce.
AfDB board denies asking Adesina to step down, as Obasanjo says the bank risks being hijacked
“The Bureau of the board of governors informs the public that it has not taken any decision. Everyone must allow the Bureau to do its work and allow due process to reign.”
The Bureau of the Board of Governors of the African Development Bank (AfDB) has denied media reports making the rounds that AfDB’s president, Akinwumi Adesina, has been asked to step down pending the completion of the probe and determination of allegations against him.
The bank’s top governing board members said that they have not asked Adesina to step down from his position as president, even as the board continues to review the fallout of complaints by some whistleblower. The statement from the Chairman of the bank’s board of governors, Niale Kaba, said:
“The Bureau of the board of governors informs the public that it has not taken any decision. Everyone must allow the Bureau to do its work and allow due process to reign. All governors will be carried along in resolving the issue.’’
Kaba also stressed that there was no governance crisis at AfDB as was being speculated in certain quarters. He confirmed that the Bureau of the Board of Governors of AfDB met on Tuesday, May 26, after the request by the U.S Secretary calling for an independent probe. The essence of the meeting was to take a closer look at the allegations by the whistleblowers against Akinwumi Adesina, said allegations which had already been investigated by the ethics committee of the bank.
Kaba further disclosed that even though no decision has been taken yet, the bureau assures that it is treating the case with the utmost seriousness that it deserves.
Adesina, who maintains his innocence of those allegations, had stated that a fair, transparent, and just process will vindicate him.
In a related development, former Nigerian President Olusegun Obasanjo had thrown his weight behind Adesina and kicked against the demand by the United States of America for a fresh, independent probe of the AfDB President who had earlier been cleared by the ethics committee of the bank.
In his letter to 12 former African Presidents, Obasanjo said that Africa must stand up and not allow its institutions to be unduly controlled by non-African countries.
Obasanjo said that the bank has witnessed tremendous growth under Adesina’s leadership and has doubled its capital base since he took over.
How N400 billion ecological funding can save Nigeria’s coastline
The waves of current from the ocean have become more violent, eroding the nation’s coastline which poses a serious threat.
With the higher rainfalls predicted for the year 2020, states in Nigeria may have to worry about something more serious than a flood – the erosion of the coastlines.
According to Mr Kabiru Abdullahi, Lagos State Commissioner for Water Front Infrastructure Development, the waves of currents from the ocean have become more violent, eroding the nation’s coastline and compounding environmental degradation, and flooding.
This development is already posing serious threats to several parts of Lagos state, which is known to be a coastal city.
According to NAN, the state government had already constructed 18 groins to wade off the violent currents from the oceans, but Abdullahi admitted that given the current situation, there is a need to construct at least 60 more groins.
These groins, he explained, would act as breakers, trapping sand from moving down the beaches.
What can N400 billion do to save the situation
Coastline erosion is a seasonal problem which will always occur when there is a rise in sea level, as is expected during the rainy season. If the government does not armour the shorelines with seawalls, jetties and groins, there could be more property and land losses.
According to the commissioner, N400 billion would be just enough to construct groins to cover another 60 kilometres in addition to the 7.2 kilometres done so far.
“On the Eko Atlantic City Project, so far, 18 groins have been constructed at 400 metres intervals covering a distance of about. We still have about 60 kilometres to go which is estimated to cost about N400 Billion,” he said.
The Ecological fund is an intervention fund set up by the Federal Government to address the various environmental challenges in communities across the country, but interestingly, the Lagos state government has not accessed any ecological fund on this project so far.
Lagos state budget for 2020 was put at N1.17 trillion with environment getting N66.586 billion of the sum. With this sum, there is no way the ministry of environment can take on the task of funding a N400 billion project on coastline and shoreline protection, and this is only one of the numerous environmental challenges the state has to deal with. The state budget has even been reviewed downwards in view of the COVID-19 induced economic challenges.
Illegal dredging activities and land reclamation for urban development are also creating serious environmental issues for Lagos and left on its own, and without intervention funding from the federal government, the coastline situation could be left to deteriorate even further with the onset of the rain
As the commissioner suggested, the federal government might want to consider allocating some of the “recently released tranche of Abacha loot of about $313 million” for this purpose, as it no doubt qualifies as a critical infrastructure for the country.
New OPEC+ output cut proposal may stall if Russia …
OPEC is weighing the possibility of continuing with the current level of OPEC+ production cuts till the end of the year in order to support the oil market.
Some members of the Organization of Petroleum Exporting Country (OPEC) and Saudi Arabia are considering extending the historic production cuts of almost 10 million barrels per day beyond June.
They are weighing the possibility of continuing with the current level of OPEC+ production cuts till the end of the year in order to support the oil market; however, they are yet to get the support of Russia.
Russia could be a stumbling block to sustaining the output cut deal beyond June, though OPEC+ and top oil-producing countries had pledged in April to restrict production to 9.7 million barrels per day in May and June, and then 7.7 million barrels from July to December.
According to reports, Saudi Arabia is pushing for the deeper 9.7 million barrel per day output cut to be extended beyond June up to the end of 2020, in order to rebalance the oil market, which is still bedevilled by a lot of uncertainty and volatility.
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Russia on its part, which is a key ally to OPEC has been non-committal on this plan. The Russian government on Tuesday approved a plan to increase oil production as soon as the OPEC+ deal ends. This they hope to achieve by having new oil wells drilled this year and in 2021 for 2022 production.
According to a report from oilprice.com, Saudi Arabia believes the oil market still needs support and wants to continue with the current output cut until the end of the year. Russia wants the same, but the major challenge is with the oil companies who had failed to reach any agreement at their meeting on Tuesday.
About half of the Russian oil firms support the extension of the current output cut while the other half are against the extension but rather calling for the continuation of output cut that was earlier agreed by OPEC+. As a result, Russia is typically non-committal and would wait to see how much oil demand will recover.