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March 30, 2013

Shell to Shut Down Major Pipeline in Nigeria

by Heather Murdock

Shell Nigeria, one of the largest oil companies in the Niger Delta, is planning to shut down one of the most important pipelines in the country because of 'unprecedented' levels of oil theft this year.  Observers say repairing the damaged pipeline will not fix the problem.

Shutting down a 150,000 barrel a day oil pipeline is a big deal but Shell Petroleum Development Company in Nigeria says it has no choice. It says it has to shut down the Nembe Creek Trunkline, a major oil export pipe, to repair holes drilled by oil thieves.  Shell declined to say when it expects the pipeline to re-open.

Security forces say they are successfully combating oil thieves but Shell says sabotage has increased dramatically this year.

Joseph Adheke, an oil worker, says people are buying, selling and transporting illegal oil in plain sight on the Niger Delta creeks.

"A barge that would take three hours to cover a journey of just a mile or two: How come they could not be arrested?  How come they can carry crude and escape the watchful eyes of this surveillance, the military and the rest of them," he said.

Isitoah Ozoemene, a political science lecturer at the State College of Education in Warri, a Niger Delta oil town, says it is possible that both Shell and security forces are correct: oil theft is increasing and security forces are catching more thieves.

Nigeria is Africa’s largest oil exporter, shipping about 2.5 million barrels of oil a day.  Nigerians in the Niger Delta have long complained all they get for their land’s oil wealth are massive oil spills.

Ozoemene says the reason oil theft persists is largely systematic. The main beneficiaries of oil theft, known as "illegal bunkerers" are wealthy "big men" but they could not do it without unemployed young people frustrated by abject poverty in a region awash with oil wealth.

"Bunkerers are able to do this because there are a lot of young people who are frustrated with the system are ready to work with them for their own benefit," said Ozoemene.

The answer, he says, is not to stop local people from making money from oil, but to find a way to make it legal.

"But if the system accommodates them and makes them a stakeholder or if government policies acknowledge that these resources belong to this area and they can exploit them and pay taxes to the government these so called big-time bunkers would not succeed," he said.

He also says it is possible that security forces, known as the Joint Task Force, or JTF, have a hard time stopping saboteurs because individual officers look the other way.

"You may also have a very corrupt regime.  For instance, JTF is made up of very lowly paid military officers.  Everybody wants to cash in on the oil wealth so I wouldn’t be surprised if there was an issue of corruption there," he said.

Other observers say even if there is no corruption at all among security forces, it is still impossible for them to stop oil thieves. 

Jackson Timiyan, a community leader in oil-rich Gbaramatu Kingdom, says the answer is not to let the people steal oil, but to pay them to police the pipelines.

"They are more familiar with the terrain," he said. "They know who can perpetrate these acts.  If the act is perpetrated they know where the act can take place.  Not somebody that doesn’t know the terrain.  You can take the entire Nigerian army into the creeks.  That would not curtail illegal bunkering and crude oil theft."

Between 2003 and 2008 there was an insurgency in the Niger Delta, with militants attacking the oil companies and the government.  The all-out war quieted in 2009, with former militants basically being paid not to fight.  However, instability in the region remains and the people say their grievances have never been addressed.

Hilary Uguru contributed to this report from the Niger Delta.