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Despite the fact that Nigeria as a whole managed to increase and stabilize its crude oil production last year, crude oil theft on Shell’s pipeline network resulted in a 50-percent increase in oil losses, the oil major said in its 2017 sustainability report this week.
Crude oil theft resulted in losses of around 9,000 bpd in 2017, more than the 6,000 bpd lost in 2016, but less than the rate of 25,000-bpd loss in 2015, Shell said.
The number of sabotage-related spills in 2017 increased to 62 compared to 48 in 2016, but was less than the 94 sabotage-induced spills in 2015, Shell’s estimates showed.
“The increase in 2017 can in part be explained by the militant-induced shutdown of the Forcados export terminal in 2016, which reduced opportunities for third party interference,” the Anglo-Dutch oil major noted.
“This demonstrates that continued air and ground surveillance and action by government security forces to prevent crude oil theft remains necessary,” according to Shell, whose Shell Petroleum Development Company of Nigeria SPDC JV has removed more than 950 illegal theft points since 2012.
The number of operational oil spills on Shell’s network increased to nine last year from eight in 2016, but the volume spilled dropped by 70 percent annually, the report showed.
In the ‘payments to government’ section of the report, Shell said that it had paid US$4.32 billion to the Nigerian government in 2017, most of which—US$3.2 billion—went for production entitlement to the Nigerian National Petroleum Corporation (NNPC), followed by taxes to the federal inland revenue service, royalties to the Department of Petroleum Resources, and fees.
“Security remains a high priority due to continued crude oil theft and criminality in parts of the Niger Delta. Illegal refining and third-party interference are the main sources of pollution in the Niger Delta today,” Shell highlighted in its report.
Last month, Amnesty International accused Shell and Eni of being negligent regarding oil spills in the Niger Delta—a veritable disaster site after decades of spills, sabotages, and oil theft. A few days later, Shell Nigeria denied Amnesty’s allegations of environmental mismanagement in the Niger Delta, “reiterating its commitment to swift response to oil spill incidents as much as access and security conditions permit teams to mobilise and deploy to spill sites to investigate, clean up and remediate such areas.”
By Tsvetana Paraskova for Oilprice.com