Shell: Nigerian oil sector in crisis mode

July 31, 2013 at 8:58 AM

ABUJA, Nigeria, July 31 (UPI) -- Nigeria is in a "crisis situation" because its crude oil production plans are undermined by rampant theft, a country manager for Shell said Wednesday.

A report published Monday by the Nigeria Extractive Industries Transparency Initiative estimated Nigeria lost $10.9 billion in oil revenue to theft and sabotage from 2009-11.

Country manager for Shell operations in Nigeria Mutiu Sunmonu said 80 percent of the government's revenue came from oil. He said a goal of expanding the national oil sector may be thwarted by oil bandits in the Niger Delta region.

"The impact of the activities of crude oil thieves and illegal refineries on the environment in the Niger Delta and the Nigerian economy is now a crisis situation," he was quoted Wednesday by Nigerian newspaper ThisDay as saying. "At some point this year, over 60,000 barrels of crude were being stolen from the Shell Petroleum Development and Production Co. lines every day."

The Nigerian government in 2000 set a national goal of producing 4 million barrels of oil per day by 2010. The Organization of Petroleum Exporting Countries said in its latest monthly market report Nigeria produced 1.7 million bpd in June.

"Until there is a deterrent, the industry does not stand a chance against illegal bunkering [theft] of the scale we are seeing today," Sunmonu.

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