IOCs urge industry stakeholders to address oil theft in Niger Delta

International oil companies (IOCs) in Nigeria have called on stakeholders to address the existential issue of crude losses in the Niger Delta caused by oil theft.

They made this known while speaking at an industry leaders’ panel at the Nigerian Oil and Gas (NOG) conference on Wednesday in Abuja.

Osagie Okunbor, managing director of Shell Nigeria Limited, said the crude oil losses caused by oil theft had resulted in Nigeria’s daily oil production declining from 1.8 million barrels per day to about 1 million bpd and frankly, “most of that comes out of deep water”. 

“So, our OML 53 and 57 marginal field licensees, depending on how quickly they can bring production on stream, those who are on land, swamps and shallow water, evacuation is going to be an issue. So it’s an existential issue for us,” Okunbor said. 

He added that two of the most important oil pipelines in the country are currently shut down with hundreds of thousands of barrels a day shut-in.

“We need to address it. If we don’t address it, we can do all the new oil development issues that will continue to occur. But what is going to move the needle for us in terms of bridging this gap of hundreds of thousands of barrels a day is solving the evacuation problem,” he added.

“So if there’s one thing we need to take away from this conference, it’s how we can put our heads together: Industry, government, regulators, communities, security agencies as to how we can deal with this culture.”

Oladotun Isiaka, executive director, ExxonMobil Nigeria, who was represented by Richard Laing, managing director of the company, asked stakeholders to work together to tackle the oil theft challenge as it was weighing down on investments in the upstream sector.

“I see two things: When you talk about production, there are two variables in there. There’s capacity and there’s downtime. So security and the downtime aspect, and I agree it is existential,” he added. 

Meanwhile, Philip Mshelbila, chief executive officer (CEO), Nigeria Liquefied Natural Gas (NLNG), said its six-train gas processing plant is experiencing a decline in production owing to escalating third-party infringement. 

“We have been producing in the last month at about between 60 to 68 per cent production. In other words, roughly 35 percent of our capacity is empty. There are many factors, but the biggest one of them is crude oil theft,” Mshelbila said. 

“If we don’t address this, we will not get out of this quagmire that we’re in.”

In the first quarter of 2022, the country lost at least $1 billion due to oil theft, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).