Nigeria Loses N2.4Bn Daily to Shut Oil Pipeline

Nigeria may face severe financial difficulties in the months ahead as crude oil production has dropped further by 150,000 barrels per day due to the shut of the Trans Niger Pipeline (TNP) following an explosion and fire at a crude theft point on the 28” section of the facility at Bodo West in Ogoni land.

To this end, the country is currently losing about N2.357 billion daily, pending when the pipeline is restored.

Nigeria relies on oil exports for both foreign exchange and revenues and that is why the country’s economy is tied to the unpredictable oil market.

Mutiu Sunmonu, managing director, SPDC and country chair, Shell Companies in Nigeria described “another sad reminder of the tragic consequences of crude oil theft.”

“This is another sad reminder of the tragic consequences of crude oil theft. Unknown persons continued to reconnect illegal bunkering hoses at Bodo West even as our pipeline team were removing crude theft points. It was, therefore, not surprising that the fire occurred from the continuing illegal bunkering even as a previous crude oil theft point was being repaired by the team.

“So far, there is practically no spill from this event as the oil is burning off. What is visible in the water is from an earlier oil spill which was also as a result of oil theft. The explosion also triggered a fire on a nearby barge. Crude theft continues to pose significant challenges to people, the environment and the local and national economy, and all stakeholders must work together to stop this criminal activity.” Sunmonu added.

The shut down is a confirmation of the International Energy Agency (IEA) report, which predicted a drop in Nigeria’s crude output this quarter.

IEA stated that Nigeria’s crude oil output declined to a six-month low of 1.96 million barrels per day. The agency attributed the decline to oil theft and pipeline vandalism, which had bedeviled the industry for a long time.

But environmental activists accuse Shell Nigeria of using oil theft as an excuse to cover up accidental spills.

Associated Press reported that the company has to compensate local communities for spills not caused by theft.

“Sabotage is a problem in Nigeria, but Shell exaggerates this issue to avoid criticism for its failure to prevent oil spills,” Audrey Gaughran of Amnesty International said.