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Niger Delta Fund Initiative: Govt loses N149b oil revenue to Warri war
http://www.vanguardngr.com/articles/2002/headline/f126082003.html
By Hector Igbikiowubo
Tuesday, August 26, 2003LAGOS — The Nigerian economy has suffered deferred oil revenue of $1,167,125,000 (about N149,392,000,000) over the last five months on account of the incessant crises in Warri and environs which forced oil majors to shut-in production in the area. Also,10 sailors from Senegal, Gambia and Ivory Coast have been arrested by the Nigerian Navy during an operation to halt oil smuggling from the strife-torn Niger Delta, a spokesman said yesterday.
Following the crises which started in March, a total of 272,500 barrels per day (b/d) of a production capacity of 2.1 million b/d, remains shut-in, six months after inter-ethnic clashes between the Ijaw and their Itsekiri neighbour forced oil multinationals to shut down key production facilities. But for the crises, there are indications that at $30 per barrel of crude oil, the Nigerian economy would have grossed $8,175,000 from the 272,500 barrels per day of crude oil which is currently deferred.
The deferred amount of crude oil production per day would translate to $253,425,000 per month and would have grossed $1,167,125,000 over the last five months.
The Federal Government also has suffered a deferred revenue in excess of $696,918,750 (about N89,216 billion) over the last five months as a result of the Warri crises. Since the Federal Government owns 55 per cent equity participation in the joint venture operations of the oil companies operating in the area, it would have earned about $4,496,250 per day from the 272,500 barrels of oil per day which is currently deferred.
In a month, Federal Government’s 55 per cent equity holding would have earned a total of $139,383,750 and over a five-month period, this would have totalled $696,918,750 (about N89.2 billion).
There are also indications that the recent spate of inter-ethnic fighting between the two groups which has left countless people dead could delay plans by Shell, Nigeria’s biggest producer, and ChevronTexaco to restart some facilities abandoned after the clashes five months ago.
Spokesmen for the companies affected by the production shut-in said the amount of crude oil production shut-in represented about 10 per cent of Nigerian oil output. Inter-ethnic fighting between the Ijaw and their Itsekiri neighbours earlier in the year led to dozens of deaths and forced oil majors— Royal Dutch Shell , ChevronTexaco and TotalFinaElf— to abandon installations in the Warri swamp which accounts for over a third of Nigeria’s crude oil production. Although the violence soon ebbed, continued sporadic clashes, kidnapping and banditry have kept the oil multinationals out of the worst affected areas. ChevronTexaco said 140,000b/d of its production capacity in the Niger Delta was still shut-in, while Shell said it was losing 125,000 b/d. TotalFinaElf, a small producer in the area, said it was not about to return to abandoned facilities with capacity of 7,500b/d. "We obviously hope to start production as soon as possible, but we are only going to when we are convinced it is safe for our personnel to return to their posts," said Simon Buerk, a Shell spokesman in London. He said Shell would not speculate on when that could be. Shell had initially abandoned 320,000b/d of production when the unrest broke out. Output was completely restored in one of the affected areas, but the company has stayed away from the northern swamps of the affected area, Buerk said. A series of incidents since March have compounded fears of returning to abandoned facilities. In June, three Shell expatriate staff were kidnapped and held for a fortnight. Shell said it had been the target of protests and armed robberies since then. One of its gas compressor stations in the Niger Delta was broken into by "a group of armed men" on August 5, although operations at the facility were not affected, said Buerk. He also said an unspecified "community incident" closed Kokori, a 20,000 b/d flow-station, on July 25, and that it was re-opened six days later. TotalFinaElf said it had still not returned to the western Niger Delta, where its 7,500 b/d Upomami flow-station near the oil city of Warri was attacked by suspected Ijaw militants in March. "Warri is still not safe. We lost five staff to the crisis, so we are not in a hurry to go back," said a TotalfinaElf spokesman, referring to the killing of three employees and two members of the security forces guarding the facility in the March attack. "We won’t see any production from any of those fields before the fourth quarter," said ChevronTexaco spokesman, Andy Norman. "The security situation really continues to be the main concern that we have," he said.
On the arrested sailors, Navy Commander Aliyu Kabir said the men were arrested along with several Nigerians over the past three weeks as Navy patrols seized four ships and a motorised barge involved in smuggling. Nigeria has launched a crackdown on illegal oil bunkering which accounts for losses in excess of 150,000 barrels of crude oil per day which are sold to agents of unscrupulous foreign refineries. The profits from the racket are said to be used to fund armed gangs of pirates and ethnic militants which have terrorised the Niger Delta in recent months and disrupted legitimate oil exports from Africa’s biggest producer.
Kabir said four sea-going tankers, the Zoogu, the Tina, the Cap Breton and Efunyo, had been seized in recent weeks along with the barge, the Glory. "Investigation is still going on. As soon as it is complete, the arrested men will be handed over to the police for prosecution," he said.
Oil industry officials said international syndicates take much of the stolen oil to West African refineries, but some cargoes get as far as Europe and the Dutch port of Rotterdam in particular.
http://www.earthrights.net/nigeria/news/revenuelost.html