Nigeria sees 21.9 mm barrels of crude lost to oil thieves

Between 14.6 mm and 21.9 mm barrels of crude oil out of the over 3.6 bn barrels that was produced in 2004 was stolen by oil thieves in the Niger Delta region going by the revelation by the Shell Petroleum Development Company (SPDC), Nigeria that crude oil theft by armed gangs peaked at 60,000 bpd and 40,000 bpd at low periods within the period.
That is to say that the armed gangs in a total of 71 incidents deprived the country of revenue from nearly a month's production ranging between 29 mm to 31 mm barrels.

Also in the year under review, $ 100,000 was expended by the SPDC on the purchase of drinks and "wedging fees" during their homage visits and meetings with communities and their traditional rulers in the region.
SPDC in its 2004 People and the Environment Annual Report, however, said the figures on the stolen crude oil were estimates as it does not have "accurate data on the volumes of crude oil that are stolen" but it said that in 2003, between 100,000 bpd and 20,000 bpd were stolen at high activity and low activity periods, respectively. Oil production in 2004 averaged one mms per day compared to the 2003 figure of 900,000 bpd.

External Affairs Manager, Western Division of Shell, Mr Harriman Oyofo who referred to the Directorate of Petroleum Resources (DPR) for information on the nation's oil production figures said in response to a question that he does not know how the oil mafia rips off the country.
"We report our fiscal production, not our well head production as required by the Royal Dutch/Shell Group's HSE Performance Monitoring and Reporting Guideline," the company stated.

Besides the $ 100,000 on homage payments, the company also said that approximately $ 1 mm was spent on transportation and accommodation of community representatives and its recognised Project Advisory Committees (PAC) members when they were invited to Warri and Port Harcourt to discuss business/project plans or operational matters.
It stated that its "big" rules of no payments to communities other than specified for legitimate business reasons; no payment to ghost workers or stand-by employment and no bribery of any kind do not stop it from purchasing drinks and paying "wedging fees" during homage visits because the customs and tradition of the communities demanded so.