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Nigerian military scales up battle against oil theft in bid to restore production


Military recovers 3.75 mil barrels of stolen crude

Nigeria losing close to 400,000 b/d oil output to theft: NNPC

Bonny Light, Forcados exports remain disrupted

  • Author
  • Eklavya Gupte    Newsdesk-Nigeria
  • Editor
  • Manish Parashar
  • Commodity
  • Natural Gas Oil

Nigerian security agencies have scaled up operations to dislodge thieves ravaging oil pipelines and other production facilities in the Niger Delta region, the military said Aug. 12, as the country attempts to restore production to normal levels.

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Sustained offensives by government troops in the main oil producing Bayelsa, Delta and Rivers states in the heart of the Niger Delta region led to the recovery of 3.75 million barrels of crude oil stolen from wellheads and pipelines, the military said in a statement.

Mele Kyari, the CEO of Nigeria National Petroleum Co. Ltd., said in July that Nigeria was losing 400,000 b/d of oil production to theft, and added that the government was working with oil producing companies to resolve the security challenges.

Africa's largest oil producer has been dealing with a barrage of security, operational and technical problems at its key oil infrastructure since early 2021.

Crude and condensate production averaged 1.314 million b/d of oil equivalent in July, down from 1.403 million boe/d in July 2021, according to data from the Nigerian Upstream Petroleum Regulatory Commission.

Nigeria has seen its crude and condensate production drop to almost half its capacity of around 2.2 million b/d, S&P Global Commodity Insights reported earlier.

"The large quantity of crude and [oil products] recovered showed a great deal of damage to the economy," military spokesperson Bernard Onyeuko said in the statement.

Security risks

Nigeria's biggest oil producer Shell said in briefing notes released Aug. 8 that the alarming insecurity in the Niger Delta has forced it to abandon its Assa North-Ohaji South gas development project, expected to produce 300 Mcf/d of gas. It said it would not return until the security situation improved.

A Shell spokesperson said Aug. 11 the company was still battling to repair the damage to an arm of its loading facility at the Forcados Oil Terminal that led to the suspension of oil exports since July 17.

Crude exports of the Bonny Light grade have been on force majeure since mid-March following sabotage attacks on key pipelines.

Rising pipeline sabotage and insecurity in the Niger Delta have also hampered the growth outlook for Africa's largest oil producer.

S&P Global said in a recent note it expects Nigerian crude supply to rise to 1.5 million b/d in the first quarter of 2023.

"Political risks may worsen ahead of elections in early 2023," Platts Analytics said. "Production has averaged around 300,000 b/d below its OPEC+ quota since mid-2021 ... Loadings remain low despite the start-up of the Ikike field in July, feeding into Amenam loadings."