Page 4 - DMEA Week 40 2022

DMEA COMMENTARY DMEA

Ad from NNPCL’s anti-theft campaign (Image: NNPCL)
Pipeline theft highlights

larger problems in Nigeria

Disruptions in flows to export terminals are affecting the West African country’s politics,

economic standing and efforts to achieve self-sufficiency in petroleum product supplies

IT is common knowledge in Nigeria that the lose money when crude oil doesn’t reach export
pipeline networks that connect oilfields in the terminals. Abuja also loses, partly because some
WHAT: south to the export terminals at Bonny, Forca- of the barrels flowing through the pipelines
The head of NNPCL spoke dos and other locations are not secure. For more belong to the national oil company (NOC),
to Parliament about the than two decades, the international oil com- Nigerian National Petroleum Co. Ltd (NNPCL),
extent of oil theft near panies (IOCs) that are working to develop the and partly because it cannot collect tax on crude
Forcados. region’s resources have been seeing a sizeable export revenues for barrels that never arrive at
portion of their production disappear between an export terminal.
WHY: wellhead and tanker, siphoned out of the pipe-
The pipeline breaches line by smugglers who direct it to underground Widespread pipeline theft
are exacerbating strains
in Nigeria’s midstream refineries in a practice known as bunkering. Earlier this week, Mele Kyari, the group CEO of
sector and its economy The phenomenon is a significant source of NNPCL, spoke to members of Nigeria’s Parlia-
at large. concern for IOCs. Oil theft causes them to lose ment about the extent of the problem that the
money, and it’s also a logistical complication. country was facing.
WHAT NEXT: All too often, Shell (UK), Eni (Italy) and other Speaking to members of the Senate’s ad hoc
Much depends on the majors working in southern Nigeria have had to committee on oil theft, he said that security
success of efforts to declare force majeure in response to the spills forces had uncovered extensive illegal refining
expand refining capacity. and stoppages caused by the pipeline breaches networks in the vicinity of the 400,000 barrel per
made to enable bunkering. day (bpd) Forcados terminal run by the Shell
But it’s also a headache for the Nigerian gov- Petroleum Development Co. (SPDC) joint ven-
ernment. IOCs aren’t the only stakeholders to ture within the last six weeks.

P4 www. NEWSBASE .com Week 40 06•October•2022