Shell: Nigeria Oil Infrastructure Attacks Still A Major Concern

Although Nigeria has managed to restore its oil production to around 1.8 million bpd, following major militant attacks on oil infrastructure in 2016, sabotages in parts of the oil-rich Niger Delta continue to plague its oil production and the oil majors operating there, a local manager for Shell has told Bloomberg.

“Security in parts of the Niger delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism as well as onshore and offshore piracy,” Igo Weli, general manager for external relations at Shell’s Nigerian unit, told Bloomberg in an email.

“Facilities operated by both indigenous and international oil companies continue to be vandalized by attacks and other illegal activities such as crude-oil theft,” Weli noted.

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 in April.

Crude oil theft resulted in losses of around 9,000 bpd in 2017, more than the 6,000 bpd it lost in 2016, but less than the rate of 25,000-bpd loss in 2015, Shell said two months ago.

Last year, Shell’s production in Nigeria averaged 631,000 bpd, equal to around one-third of the country’s oil production, Weli told Bloomberg.

In recent weeks, Nigerian oil facilities operated by Shell had some issues, but Weli didn’t specifically link those incidents with his comments on security.

In the middle of May, Shell’s Nigerian unit declared force majeure on Bonny Light exports because of the shutdown of the Nembe Creek pipeline, which led to the accumulation of lots of unsold crude.

Following disruptions of the oil flows on the pipeline feeding the Forcados oil terminal, the facility faces more than two weeks of delays of oil cargo loadings, and no official June or July loading schedules have been released yet, trading sources told Platts last week.

By Tsvetana Paraskova for Oilprice.com

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