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.