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Low oil prices mean a slump in Nigerian oil thefts

The Niger Delta area in Nigeria has been a catastrophic region for environmental pollution and oil piracy. But, as the oil market continues on with its slumping prices, stealing crude oil for illegal refining is less profitable, and the country is experiencing a decrease in crude oil crime.

According to a recent Wall Street Journal report, just months ago, hundreds of thousands of barrels worth of crude oil were obtained daily. However, with current low prices, risk of getting busted by Nigeria’s navy now outweighs tapping into oil pipelines and selling the stolen commodity on the international market.

Nigeria is the biggest oil producer on the continent of Africa. The country is also a member of the Organization of the Petroleum Exporting Countries (OPEC). However, many communities residing around oil production in the Niger Delta remain underdeveloped. Many oil companies blame gangs breaking into pipelines to steal crude oil as the main cause of oil spills in the region. It’s such a mess that companies have tried to sell off assets in the country. Royal Dutch Shell alone has rid itself of $2.4 billion of oil-related properties in the country since 2010.

Shell reopened a pipeline in February as theft decreased, but other companies aren’t as optimistic just yet. Kola Karim, chief executive of Nigeria’s Shoreline Natural Resources Ltd., said about 15 percent of his oil “just vanishes.” He adds: “The price is at the pits of hell so even a drop of your oil stolen, you feel it.”

Until recently, government officials could only guess how many hundreds of thousands of barrels of oil were taken daily. Now, officials in the presidency say it is less than 50,000 of the two million Nigeria produces daily. For more information on the impact of low oil prices in Niger check out the full article from Drew Hinshaw of the Wall Street Journal here.

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