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Crude theft risks crimping production, Nigerian oil officials say

DANIEL MAGNOWSKI and ELISHA BALA-GBOGBO

ABUJA, Nigeria (Bloomberg) -- Nigerian oil officials said unchecked theft from pipelines may crimp the African nation’s ability to meet its target of adding 30% to crude output by the end of the decade.

Stealing and sabotage cost the country 300,000 bopd last year, Andrew Yakubu, group managing director of state-owned Nigerian National Petroleum Corp., said today at a conference in Abuja, the capital. Nigeria must do more to maintain its position as Africa’s biggest producer, he said, adding that the country has a target to raise production to 3 MMbopd by 2020, from about 2.3 million now.

The nation’s oil output fluctuated by as much as 420,000 bopd between 2011 and 2013 amid pipeline attacks that halted flows from some fields. Nigeria has responded to theft by starting air surveillance of pipelines and allocating 15 billion naira ($91 million) for security equipment, Yakubu said.

“A difficult and growing problem is the issue of oil theft,” said Markus Droll, V.P. for Nigeria and Gabon at Shell Upstream International. “2013’s production was badly affected by the direct impact of thieves placing illegal oil-tapping connections on oil infrastructure. In Shell alone, we removed around 300 such connections last year.”

Deepwater production will account for half of Nigeria’s oil output by decade end, the NNPC’s Yakubu said. Six deepwater oilfields including Shell’s Bonga, Chevron’s Agbami, Mobil’s Erha, and Total’s Akpo currently account for a third of Nigerian output.

03/18/2014

 

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