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Royal Dutch Shell on Thursday said Nigeria was losing over $1bn monthly to the activities of oil thieves.
The oil major said the monthly $1bn oil theft figure was estimated and added that the country might be losing more.
Industry analysts, who computed the figure over a 12-month period, concluded that the country must have lost at least $12bn to oil theft in 2013.
Similarly, Shell said it lost nearly $1bn through theft and various disruptions to its Nigerian oil and Liquefied Natural Gas operations in 2013 and noted that rampant oil theft was costing the country even more.
Oil theft is often associated with criminals who tap crude from pipelines for local refining. Stolen oil also leaves the country in tankers.
A Reuters report quoted Shell’s Chief Financial Officer, Simon Henry, as saying, “The theft is very material. Figures have been quoted up to a billion dollars a month being stolen from the government; in effect, and that figure is probably accurate.”
The oil major, which updated investors on its strategy in its annual report, also said that the proposed Petroleum Industry Bill had curbed investment, hindering production, while security was a daily challenge and oil theft “very material”.
According to Henry, Nigeria is important to Shell because it provides almost 10 per cent of the company’s output and is seen as a source of future growth.
In its annual report, also published on Thursday, Shell said some risks of working in Nigeria had worsened.
The PIB, a piece of legislation several years in the making, has not passed but it could change the terms for foreign oil companies in the country.
Henry said “There are at least three to four different versions of it and most of them have been unhelpful to supporting future investments in the country.
“Therefore, the industry at large has taken almost no significant investment decision in that six, seven-year period. So, the country’s four million barrel-a-day target has effectively become actual production of less than two million bpd.”
Nigeria produced about 1.9 million bpd in February, according to OPEC figures.
Shell’s Nigerian oil and gas output averaged 265,000 barrels of oil equivalent per day in 2013, down 100,000 bpd from 2012 and equal to about eight per cent of total supply of 3.2 million bpd.
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THE ECONOMY