Categories: Business

Shell Probes Illegal Oil Tap After Report of Prolonged Theft

Oil major, Shell’s Nigerian subsidiary, is investigating reports that an illegal oil tap ran for nine years on a pipeline it operates, a spokesperson said Wednesday.

The Nigerian National Petroleum Company Limited (NNPC) said on Sunday the theft point extended from the Trans Escravos pipeline and that the Afremo platform, operated by the Nigerian unit Shell Petroleum Development Company of Nigeria (SPDC), was the suspected exit point of the stolen crude.

“We are also conducting an investigation to establish where the theft lines end and whether there have been any breaches of the unmanned platform’s security barriers (locks etc.) or any unauthorised use of the equipment on it,” an SPDC spokesperson said in an email to Reuters.

SPDC said it had detected illegal connections as part of regular surveillance and would launch a joint investigation with regulators to “establish the nature and condition” of the lines before removing them.

NNPC pointed to the theft line discovery as evidence that Nigeria’s coordinated interventions, including contracts with companies owned by former militants, to crack down on theft were paying off.

Large-scale theft from Nigeria’s pipelines has throttled exports, forced some companies to shut in production and crippled the country’s finances.

For the significantly oil-dependent Nigerian economy, THISDAY reported Tuesday that crude production slumped to a new low of 937,766 barrels per day in September.

It would be the first time since at least 1990 that Nigeria would be producing that low quantity of the commodity from which the country generates majority of its foreign exchange revenue.

Latest data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) detailing production for last month , showed that the fresh drilling figure was lower than the one for August which was 972,394 barrels per day.

The information is coming days after THISDAY reported that Nigeria lost as much as $800 million in earnings that could have accrued to the federation to facilities’ shut-ins and equipment failures in August.

Nigeria is dealing with unprecedented oil theft under the Muhammadu Buhari administration, hobbling the country’s ability to meet its Organisation of Petroleum Exporting Countries (OPEC) quota in the last one year.

Emmanuel Addeh in Abuja