FG tasked on oil theft, illegal refining, power sector

Royal Dutch Shell plc has insisted that the incidences of oil theft and illegal refining escalated in 2012 with a significant environmental cost, urging the government to do more in terms of security and power supply to curb the twin menace.

The company, in its Sustainability Report 2012 published last week on the company’s website, said its Nigerian unit, SPDC, experienced 137 spills as a result of sabotage and theft last year, with the volume of oil lost amounting to 3.3 thousand tonnes. According to the oil giant, most of the stolen oil ends up in ocean-going tankers that transport it to refineries in other parts of West Africa, Europe and beyond. Those involved – both in Nigeria and outside – mastermind this multibillion-dollar business using influence, corruption and violence to protect their interests.

In an open letter published in the report, Mutiu Sunmonu, managing director, SPDC, said the problem of oil theft in the Niger Delta has reached “unprecedented levels” and puts enormous strain on the company’s staff, as well as costing Nigeria the country billions of dollars a year in lost revenue.

“Where possible, we are taking steps to make it more difficult for the thieves to tap into and steal oil from our pipelines,” Sunmonu said, adding that the prevention of theft still depends on the prompt response of government security agencies.

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“We urgently need more assistance from the Nigerian government and its security forces, other governments and other organisations. The government’s security forces have stepped up their efforts, but they need more dedicated resources and logistical support to combat oil theft now that it has assumed such an international dimension.

“Greater efforts are required to boost economic development in the Delta to provide alternative livelihoods for those involved.” He added that Nigeria needs to do more to encourage investment in the power sector to ensure reliable electricity supplies to reduce demand for illegally refined local diesel.

In contrast to the growing incidence of theft, Shell said it improved its record in terms of operational spills in Nigeria last year. The company said it experienced just 36 operational spills in 2012, down 40 percent from the year before, while the volume of oil spilled more than halved to 0.2 thousand tons.