According to the head of the state-owned oil company NNPC LTD, authorities in Nigeria discovered an illegal connection line from one of its major oil export terminals into the sea that had been operating covertly for nine years.
According to NNPC Chief Executive Mele Kyari, the 4-kilometer (2.5-mile) connection from the Forcados export terminal into the sea was discovered during a crackdown on theft in the previous six weeks. The terminal typically exports about 250,000 barrels of oil per day (BPD) into the sea.
In an audio recording of the briefing reviewed by Reuters, Kyari said, “Oil theft in the country has been occurring for more than 22 years, but the dimension and rate it assumed in recent times is unprecedented.”
An illegal line in the ocean is highly unusual and suggests a more sophisticated theft operation. Thieves frequently use land-based pipelines to siphon oil covertly while they are still in operation.
The operator of Forcados SPDC, a regional affiliate of Shell (SHEL.L), claimed that the theft pipeline was far away.
A spokesperson told Reuters via email that SPDC “appreciates the additional surveillance conducted on behalf of NNPC to deal with illegal activities.”
“The theft pipeline, however, is about 30 kilometers away from SPDC’s Forcados terminal. It is outside of SPDC’s right of way for the pipeline.”
According to Kyari, Nigeria, usually Africa’s largest oil exporter, is losing out on potential income from its 600,000 BPD of oil because some of it is stolen and because oil companies idle some fields rather than feed pipelines that thieves can tap into.
As a result, for the first time since at least 1990, crude oil exports declined below 1 million BPD in August, depriving Nigeria of critical funding.
Since a sub-sea hose leak was discovered at the terminal on July 17, loadings there have been halted. This week, Shell stated that it anticipated loadings to start up again in the second half of October.
