Uncertainty caused by the transition…
Ninepoint Energy Fund’s Eric Nuttall…
Many oil fields are situated in countries where poverty and crime are large problems. The locals see the oil as an opportunity to gain a bit of wealth and theft is common.
Nigeria is Africa’s largest producer of crude oil, and oil is one of the largest revenue creators in the country, however oil companies must constantly battle with thieves in the production and transport of oil in the region. At least 150,000 barrels of oil are stolen, causing higher production costs, and therefore lower revenues, and also risking major environmental disasters as the thieves often break pipes in order to loot the oil, regardless of the resulting oil spill that forms.
Shell is the largest producer of Nigerian oil, and yesterday reported two leaks on its trans Niger Pipeline in the Rivers state, which it suspects were caused by thieves cutting the pipes with hacksaws.
On the 4th of May it had to delay shipments of oil due to the theft of oil from its Nembe Creek Trunk pipeline. It had to stop the transport of 60,000 barrels a day whilst the line was repaired.
In this constant battle against the thieves Nigerian troops arrested two tankers full with crude that they suspect was stolen from coastal fields in Degema in the southern Rivers state. Brigadier General Tukur Buratai, commander of the joint military task force in charge of security in the oil region, said that the troops seized the tankers Oxo and Ani, which were carrying more than 1.8 million barrels of crude.
“Operatives of the joint military task force arrested the suspects ( a 26 man crew of Ghanaians and Nigerians) at Awoba (a coastal town in Rivers state),” he said.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com