Oil theft is becoming the most pervasive issue facing oil corporations in Nigeria, Africa’s largest oil producer, despite recent government measures to stop the perpetrators being ineffective.
The situation is so severe that just 5% of the total amount of petroleum that was transported through the pipeline between October last year and February this year was able to reach oil producers.
Oil theft has been referred to as an existential danger to Nigerian oil businesses by Mr. Osagie Okunbor, managing director of Shell Petroleum Development Company of Nigeria Ltd. earlier this month.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in. It is a fact that the issue of theft, whether as a standalone or as the basis for us to meet our OPEC quota is an existential threat for this industry,” Mr. Okunbor said.
Other notable stakeholders in the Nigerian oil and gas sector have also voiced their frustrations over the issue.
To put things in perspective, the 180,000 barrels per day capacity of the Trans-Niger Pipeline represents about 15% of Nigeria’s most recent daily output quota, which was set by the Organization of Petroleum Exporting Countries and equals 1.772 million barrels (OPEC). According to Business Insider Africa, the country in West Africa has been producing about 534,000 barrels per day, which is 30% less than its designated output quota.
According to a report by the International Energy Agency (IEA), African producers of crude oil, of which Nigeria ranks first, were unable to benefit from the increase in oil prices because they were unable to expand their capacity.
