Shell warns of economic plunge if sabotage persists in oil sector
Shell Petroleum Development Company of Nigeria (SPDC) has warned that if oil theft is not tackled urgently, the country could, in the future, be spending 50 per cent of its yearly budget on clean up.
The Head, Corporate Relations, Nigeria, Igo Weli, while linking the current rise in foreign exchange rates, high cost of goods and services to sabotage of oil facilities, said unchecked illegal refining would further crash the economy and retard infrastructural development.
Weli stated this in Port Harcourt, yesterday, during an engagement on oil theft, pipeline vandalism and illegal refineries.
He said: “Spill is going on, and if you want to clean it up, it is going to cost a lot of money. People should create a link between actions and impacts. If you break pipes and the oil spills, and government needs to clean it, then the resources needed for other infrastructural development, like building of schools and hospitals, would be channelled into cleaning up a spill that is avoidable.
“So, if the issue of oil theft continues, the spills will be horrible in the future and if you want to clean them up, you will have to allocate about 50 per cent of the national budget.
“Consequently, there will be no economic growth in the nation, infrastructure will be retarded, new ones will not be built, old ones will not be maintained, schools will go on longer strikes and hospitals will collapse.”
This came as the company announced that its Trans Niger Pipeline, from Rivers State to Bonny export terminal, has been inoperative since March 2022 as a result of sabotage.
He said it makes no economic sense to keep pumping crude, asking: “How can we pump 200 barrels while only five gets to Bonny terminal?”He said Shell would only reopen the facility when it has confidence that it is secure.
Weli said Shell is doing so much to protect its facilities from oil thieves and vandals, lamenting that 91 percent of spills from its facilities were caused by third party interference and sabotage.
“What we do in Nigeria to protect our facilities, we don’t do in other countries where we operate. We have daily overflight with security agents. We have detailed engagements with them and we were deploying drones to monitor facilities. The loss is higher. That is why it is affecting the economy, the exchange rate and every other aspect of the economy.”