Oil workers are operating under great risk —Shel

Despite efforts by the Joint Task Force in the
Niger Delta code-named, Operation Pulo
Shield, to stem crude oil theft and pipeline
vandalism in the delta, oil companies
operating in the blighted region are still
operating under grave danger. The oil
industry is not only troubled by the activities
of thieves and vandals, but also have to
contend with activities of armed criminal
gangs, who are always on the prowl to
snatch oil workers with a view to demanding
ransom from their employers.

This is grim reality in the region where
construction workers on infrastructural
development that are of immense benefit to
the people who, over the years, have been
yearning for development are also not spared
by the heavily armed criminals. The sad turn
of event in the delta is responsible for the
deployment of armed soldiers to construction
sites and its attendant increase in costs for
the companies.
The Vice President, Nigeria & Gabon, Shell
Upstream International, Mr. Markus Droll,
aptly captured the scenario at a recent forum
lamenting that oil and gas industry personnel
are working hard and faced with
considerable risks in the course of
operations and continued development of the
country. He lamented that the industry over
the years has learned and adapted well to
security threats though at great costs.
His words, “Nigerian oil and gas industry
personnel are working hard, and at the same
time managing considerable risks, in order
to play their part in the continued
development of this country. “As an industry,
we must ensure better security. This remains
a concern for many of us on a daily basis.
Over the years, the industry has learned and
adapted well to security threats, but we have
done so at great costs.
“This is not sustainable, as both our
development and operating costs are higher
than in many other operating environments
globally, due to security threats. “Ultimately,
it means that available funds for the industry
don’t stretch as far as they would, if we had
a safer operating environment. We all want a
more lawful environment because such an
environment fosters reduced cost and more
investment.
And in the end, more investment will
contribute to a more lawful environment. It’s
a vicious circle.” On crude oil theft and
pipeline sabotage, he said, “SPDC is taking a
range of actions to counter them but our
2014 production was again severely affected
by the direct impact of thieves placing illegal
oil tapping connections on oil infrastructure.
“We routinely replace damaged pipelines and
repair theft points during the year. This is a
problem unique to Nigeria, and no other
operating environment even comes close.
“Removing such connections often requires
production systems to be shut down. So
there is a compound effect between what is
being stolen and what simply can’t be
produced due to facility outages.
“Oil theft remains a complex issue that will
require sustained, multi-stakeholder
measures on a number of fronts to arrest,
and ultimately reverse. I have always been of
the view that together as an industry with
support from government, we can succeed in
turning this problem around.” While stressing
the need for better security for workers in the
oil and gas industry, he said, “A considerable
part of our operations are under strict
security limitations.
“We still need a more effective counter-
strategy against oil theft and sabotage. While
we have directed even more resources to try
to counter this menace, it has become a
bigger problem compared to a year ago. The
methods employed are more brazen than
ever. “We still need better funding for capital
projects and to clear pending payments on
expenditure.
We are very concerned about what impact
the much lower oil price will have on 2015
funding. We still need more predictability
around leases; if we increase certainty
around leases, then investment becomes
easier to attract. “And we still need fiscal
stability and predictability.
This remains key in ensuring investors of all
sizes can commit confidently, government
revenues can be forecast reliably, and a
capable service industry is maintained with a
steady workload. As it stands, investors in
Nigeria face very tough fiscal conditions.