Wunmi Semudara
Shell Companies in Nigeria has disclosed that Nigeria has lost an opportunity to produce and sell about 65,700,000 barrels of oil in the last one year due to issues bothering on pipeline vandalism and the resultant oil theft.
This translates to about N2.3tn loss in oil revenue if the prevailing exchange rate and average oil price are used.
The Chairman of Shell Companies in Nigeria, Dr Osagie Okubor, gave this analysis at the just concluded Nigerian International Energy Summit held in Abuja, he said the 180, 000 barrels per day Trans Niger Pipeline had remained shut for more than one year- March 2022 to March 2023.
According to him, the loss from March last year to March this year brings total shut in/loss to about 65, 700, 000 barrels. Brent crude price averaged about $83 per barrel from March 2022 to March 2023, meaning the country could have lost as much as N2.3tr to the menace.
Okunbor said the TNP remained shut for one year due to the massive crude oil theft on the pipeline.
The pipeline, according to Shell, is part of the gas liquids evacuation infrastructure, critical for continued domestic power generation and liquefied gas exports.
He said, “What keeps me awake today as regards my onshore business in Shell is the fact that we cannot operate a pipeline, and that’s what is responsible for the 60 percent capacity. I think today that is almost just how much gas we can supply,” he said.
“And this is because one of our key gas infrastructures — the TNP — was shut down for one year; we removed 460 illegal connections on that line. We just reopened that line. Today we are struggling to catch up with our first programme.”
Okunbor also noted that the loss was often viewed as affecting Nigeria’s oil production quota to the Organisation of Petroleum Exporting Countries.
He stressed that the situation was also having devastating implications on the supply of gas to the Nigeria Liquefied Natural Gas.
“So, if you ask me what the number one issue has to be for the incoming administration, it has to be the security of oil and gas infrastructure. If you don’t fix it, then we have a huge problem on our hands”.
He pleaded with the incoming administration to prioritize te security of oil infrastructure as Nigeria was not short of frameworks and written documents on how to tackle the various challenges in the oil sector.
He noted that the decade of gas document, for example, included steps to deepen gas use, but implementation remained a challenge.
The Managing Director of Nigerian Liquefied Natural Gas Limited, Philip Mshelbila, pointed out that 40 per cent of globally renowned gas firms’ capacity had been lying fallow due to theft.
He added that the lack of power to execute the recommendations and policies in the various documents and laws of the oil sector remained a challenge to the industry.
“Last year, the Nigerian National Petroleum Company said it detected an illegal connection on the Trans Escravos pipeline looped to the four-kilometre Afremo test line.”
