Thieves Stall Nigeria Crude Supply Via Export Terminals

The Agbada 2 flow station should have been buzzing with activity, pumping crude to one of Nigeria’s largest export terminals. Instead, it remains idle as Wilcox Emmanuel, the facility’s manager, shrugged in resignation about the thieves who had shut him down.

As much as 30% of the oil sent by pipelines through the swampy Niger River delta is stolen, consultant Wood Mackenzie Ltd. estimates. That is depriving the country of income amid a crippling recession and compounding the pain of a global price slump for Africa’s largest producer, Bloomberg reported.

At Agbada, the wells dotting the surrounding forests had been closed for three weeks following 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 Plc’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 last August, smaller-scale sabotage caused by people trying to steal oil remains rife.

Companies are using surveillance helicopters equipped with infrared cameras every day. They are 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 kilometers 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 barrels a day, according to Wood Mackenzie.

Much of the stolen oil is processed in makeshift, illegal refineries, while more organized thieves load tankers for export.

 “It’s constant,” said Gail Anderson, a WoodMac researcher in Edinburgh. “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.”