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Thursday, July 24, 2014

Shell asks Shareholders for support against Crude Oil theft

I know there is money in Crude oil business but I just don't see why people would take the risk of an explosion in stealing crude oil from pipelines.
Well shell has call on its shareholders for their support over oil theft. (Read on)

As oil theft, sabotage, spills and other related
crimes persist in the Niger Delta, Shell Petroleum
Development Company has asked for the support
of the media and other critical stakeholders in
addressing the problem.

pipeline vandals

At a summit organised recently for journalists and
other stakeholders in Yenagoa, Bayelsa State,
Shell said the menace remained unabated in the

The oil major believed that only a concerted
response by all stakeholders could end the oil theft
and related atrocities in the region.
In his lecture, the Manager, Pipeline Right of Way
Management, Mr. Wenike Princewill, said crude oil
theft and illegal refining were the main sources of
pollution in the Niger Delta.
Princewill said the Federal Government estimated
crude oil theft and associated deferred production
at over 300,000 barrels of oil per day.

oil theft

He noted that intentional third party interference
with pipelines and other infrastructure was
responsible for about 75 per cent of oil spill
incidents and about 92 per cent of oil volume
spilled from facilities operated by Shell over the
last five years.

He said, when the losses were converted into
money, the country must be losing approximately
$3.2bn per day at $100 per barrel.
He added, “Much greater volumes of oil are
discharged into the environment away from the
SPDC facilities through illegal refining and
transportation of stolen crude oil.
“In 2013, the number of spills from the SPDC
operations caused by sabotage and theft increased
to 157, compared to 137 in 2012, while production
losses due to crude oil theft, sabotage and related
temporary shutdowns increased by around 75 per

“On the average, around 32,000bpd was stolen
from the SPDC pipelines and other facilities while
the joint venture lost production of around
174,000bpd due to shutdowns related to theft and
other third party interference. This equates to
several billions of dollars in revenue losses to the
Nigerian government and the joint venture.”

Princewill said the ugly development called for
collaboration with the media and non-
governmental organisations to discourage people
from encroaching on pipelines.
Princewill, who said Shell had its huge footprints in
Niger Delta, with Rivers and Bayelsa having high
scope of oil exploration, said there was high
incidence of encroachment on Shell’s right of way.
However, he said the Bayelsa State government
was supportive in enforcing Shell right of way.

He warned against blowing oil well-heads, saying
apart from revenue loss to the government and
Shell, the impact could be dangerous to the host
He said currently, Shell had over 3,000 occupiers
on its well-heads, noting that occupiers failed to
observe the mandatory 100 metres from the pole.

He expressed happiness that Bayelsa had
prescribed punishment for occupiers of Shell’s
right of way, saying the initiative was a welcome
Princewill said Shell, in a bid to make it difficult for
oil thieves to operate, had resorted to burying
pipelines deeper and covering them with concrete.
However, he said despite those efforts, the
menace of oil theft and sabotage had persisted,
with long term social, economic and environmental

On leakages, he said Shell had a deliberate policy
that whenever it confirmed a leak, it usually
suspended production in order to stop the flow into
the environment.

He said efforts were made to contain spills, with
access to spill site usually a critical factor in
shaping the response.

Princewill said, “There have been instances where
individuals, community groups or armed gangs
have denied Shell access to spill sites.

“The reasons for this range from intra-communal
disputes to demands for clean up contracts and/or
higher compensation or plain criminal activity.
Source: the punch


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