Nige­ria oil thieves keep lid on out­put as at­tacks abate

The Star Early Edition - - WORLD -

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

PIC­TURE: GE­ORGE OSODI FOR BLOOMBERG

An em­ployee ap­proaches the en­trance to the Ag­bada 2 oil flow sta­tion op­er­ated by Shell in Port Har­court.

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