LAGOS: Nigeria loses $5 billion annually to oil theft, the head of Shell's Nigerian branch has said, the latest sign of a flourishing and organised black market for crude inAfrica's largest oil producer.
"Nigeriais losing at least $5 billion every year as a result of criminals stealing crude oil in the delta," Mutiu Sunmonu, managing director of the Shell Petroleum Development Company (SPDC), told a meeting on Wednesday.
An SPDC spokesman confirmed the statement credited to Sunmonu in local media Thursday. He made the comments during a meeting inAbujawith the Nigerian Extractive Industries Transparency Initiative, an industry watchdog.
Sunmonu did not explain how he arrived at the figure.
"If we don't stop this, I can guarantee you that the revenue from oil business to the government in particular will continue to dwindle," he said.
Nigeriaderives more than 90 percent of its foreign exchange earnings from crude oil.
Bunkering, as oil theft is commonly referred to inNigeria, involves siphoning crude from pipelines that can be treated at makeshift refineries or transported aboard waiting vessels.
Ian Craig, Shell's head for sub-SaharanAfrica, said last month inAbujathat oil companies inNigeriawere battling against rising theft costing an estimated 150,000 barrels of crude a day.
Nigeriasupplied 2.14 million barrels of crude in February, according to the International Energy Agency in its latest report.
Influential Nigerians and the military have been accused of involvement in the lucrative illegal oil industry.
While a 2009 amnesty deal sharply reduced unrest in the oil-producing Niger Delta region and led to a rebound in oil production, crude theft is thought to be on the rise.
Shell says the vast majority of oil spills in recent years in the Niger Delta, badly hit by years of pollution, have been caused by sabotage, theft and illegal refining. Activists say Shell has not done enough to prevent such spills.
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