Nigeria oil thieves keep lid on output as attacks abate
THE AGABADA 2 flow station should have been buzzing with activity, pumping crude to one of Nigeria’s largest export terminals.
Instead it was idle in the muggy, mid-morning heat as Wilcox Emmanuel, the facility’s manager, shrugged in resignation about the thieves who’d shut him down.
As much as 30% of the oil sent by pipelines through the swampy Niger River delta is stolen, British consultant Wood Mackenzie estimates. That’s depriving the country of income amid a crippling recession and compounding the pain of a global price slump for Africa’s largest producer.
At Agbada, the wells dotting the surrounding forests had been closed for three weeks after a pipeline leak that was probably deliberate.
“Who knows when we’ll be back up?” Emmanuel said.
The 60 000-barrel-a-day flow station, owned by Royal Dutch Shell’s Nigerian unit and idle for most of June, illustrates the nation’s struggle to restore deliveries of its most vital resource. Even after the government quelled a militant uprising that sent production to a 30-year low in August, smaller-scale sabotage caused by people trying to steal oil remains rife.
Companies are using surveillance helicopters with infrared cameras every day. They’re also experimenting with drones and cages on wellheads rigged with alarms. But nothing seems to fix the problem.
“We’re trying all sorts of things, you wouldn’t believe it,” Igo Weli, a manager at Shell, said in Port Harcourt, Nigeria’s oil capital. “But how do you protect thousands of kilometres of pipelines against people who are out to sabotage them?”
While Nigeria’s output has risen more than 20% since August to almost 1.8 million barrels a day, as a fragile peace with militants reduces the number of attacks on pipelines, the continual disruption from theft in the impoverished delta region threatens plans to exceed 2 million a day, according to Wood Mackenzie.
Much of the stolen oil is processed in makeshift, illegal refineries, while more organised thieves load tankers for export.
“It’s constant,” said Gail Anderson, a Wood Mackenzie researcher. “It’s a big amount of crude being stolen. Nigeria is selling much less oil on the international market than what is coming out of the ground.” Damage from theft, in lost output and pollution, can be as severe as from rebel attacks. – Bloomberg