Crude oil theft poses a threat to the country’s oil industry, the Managing Director and Country Chair, Shell Petroleum Development Company of Nigeria Limited and Shell Companies in Nigeria, Osagie Okunbor, has said.
Okunbor told the Nigerian Oil and Gas conference in Abuja yesterday, that this development had resulted in the shutdown of two of its major pipelines.
He said oil theft is one of the reasons Nigeria could not meet its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8 million barrels a day (bpd).
“It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry,” he stated.
Already, the Nigerian Upstream Petroleum Regulatory Commission said the country lost $1 billion in revenue during the first quarter (Q1) of this year due to oil theft.
Shell has operated for decades in Nigeria and together with other oil majors, is selling onshore assets to focus on deep water drilling.
Okunbor said local companies which won licences to develop marginal fields would face challenges to transport their crude once they start production.
Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.
Oil theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.