Oil theft disrupts power supply as Shell spends N80bn on CSR

The Federal and state Governments, alongside oil companies and other stake holders in the oil industry have all raised alarm over the colossal amount of money lost annually to oil thefts in the Niger Delta, but none has mentioned the fact that these activities of a few unscrupulous Nigerians also cost the residents of the region billions of dollars in earnings while also been responsible for the erratic power supply in the country.

In an exclusive visit and briefing organized for Niger Delta Mirror by the management of the Royal Dutch oil giants, Shell Petroleum Development Company, revelations were made about the implications of plant shut downs and pipe line vandalization for power supply to the nation and how this environmental scourge cost residents of the Niger Delta area, billions of dollars annually.

According to Engr. Ben Agbajogu, the Operations Manager of SPDC’s Afam Power Plant in Rivers State, when oil thieves vandalize trunk lines that supply crude to mains, the company always rapidly mobilizes its workers to conduct a Joint Investigations Visit (JIV) with the relevant stake holders to determine extent of damages and damage control measures to be taken.

‘’We usually mobilize immediately to repair the leaks, while the condensate is diverted into a storage tank while the repairs last’’, Agbajogu said. Agajogu explained how these illegal activities lead to disruption in electricity supply : ‘’We have a 240 MM standard cubic feet gas plant at nearby Okoloma called Okoloma Gas Plant and six oil wells which feed our Afam Plant.The gas supply comes with heavy liquid, even though they supply us in dry gas, while the remaining liquid drops out. The liquid, which is hydro carbon is injected into the crude line.

When oil vandals break the supply pipe line, we divert the condensate into some storage tanks, however when these tanks are full, we cannot store more crude in our facilities, to avoid break down in our facilities, we have to shut down the plant which feeds the national grid’’.

Shut downs of power plants lead to loss in the supply to the grid and these also lead to regional or national blackouts’’. The plant Manager also commented on the huge loss suffered by the company and electricity consumers in Nigeria last year.

‘’In 2012, between June and October , we had a loss of 547,488 mega watts per hour. This is massive and it costs all the stake holders a lot of power outage, which needless to say led to the loss of billions of Naira for all’’, he said.

According to SPDC sources, in July last year, the nation lost 13 days mega watts per day, as a result of incessant shut downs of the Afam facility, resulting from pipeline vandalization. This was followed by the months of June and August, when the facility was shut down seven days.

It was also shut down in September (6 days) and October (2 days) Shut downs of power plants last year alone cost the nation about 9 billion dollars in revenue while the residents of the Niger Delta that thrive mostly on favourable acquatic environment suffered a colossal loss of about 3 billion dollars annually according to an NGO, Niger Area Crusaders, who undertook a comprehensive study on the livelihood of residents of the six Niger Delta states, namely; Edo, Delta, Bayelsa, Rivers, Cross Rivers, Rivers and Akwa Ibom .

Silva Preye King, the Project Coordinator of the group based in Port Harcourt said; ‘’We undertook a comprehensive and holistic study of the cost, standard and way of living of the residents of the state over a period of 9 months and we discovered that the people of the area lost about 4.1 billion dollars arising from pollution and distortion of the environment.’’ King also explained other losses by the people of the region.

‘’During gun battles arising from disagreements between the Joint Task Force, JTF drafted to the area by the federal government to curb oil theft and vandalism and some criminals involved in the illegal activities, some members of the communities are killed in cross fires , while some are injured. Social and commercial activities are also affected and these also lead to losses by small scale tradersl which in turn results in social disorder in the affected areas’’.

‘’Most of the time, nobody says anything about the properties,including houses, vehicles, equipment, farming implements and all others lost in these frequent , disruptive and destructive face-offs’’, he said. Shut downs also leads to losses of billions of dollars in revenues to the Federal Government aside the energy losses to the economy. It also raises the level of the ozone layer nay aquatic environment to a dangerous disruptive level.

It impacts on the economy from the local community to the national level. However, an in-depth investigation by Niger Delta Mirror also revealed that the present energy challenges being experienced by the nation are caused by certain political decisions by the government officials, especially those involved in the administration of the oil and energy sector.

An energy expert, Engr. Ishmael Oparaku, who has been in the energy sector for the past 30 years, in a career that has taken him to Norway, England and the Far East, blamed the Federal Government for its lack of commitment to the provision of uninterrupted electricity supply to the nation. He said the constraints placed in the path of energy supplier by the Government include the lack of cable lines capable of evacuating energy, transmission facilities, distortion and lack of organized and integrated blueprint for the energy sector.

‘’The evacuation bottlenecks include the fact that the cable lines used in transmitting power from all our power plants to the main grids are all old and largely ineffective. This causes the transmission constraints experienced daily by our energy supplier, for example, I know for a fact that there are two lines that transmit power between Afam and Alaoji, but from Alaoji to Onitsha, they have only one line’’ On the consequences of this anomaly, Engr. Oparaku said, ‘’This results in constrains that leads to grid instability, especially since the lines are old and largely ineffective.

During the rainy season, this leads to shock and accidents, which could fatal sometimes’’, he warned. On the way forward, the Energy Development expert advised that all the relevant stake holders in the energy sector should continue to synergize and fashion ways to accelerate existing transmission network while also building others in other to realize the objective of power for all.

However, good news has come out of the power sector for the local people of the Niger Delta and the nation generally, via the initiative of Shell which has contributed about $80 billion to economy in the past five years, while also committing a further 3 billion dollars into human capacity development around the Niger Delta. In its 2013 annual report, Shell claimed that its joint venture operated by the SPDC has paid the sum of $42 billion as taxes to the Federal Government since five years ago (2008- 2012). And that the FG received the amount after costs from the joint venture.

The company which produced an average of 949,000 barrels per day in 2012, also said its off shore unit, SNEPco paid about $25 billion dollars as taxes during the same period (2008-2012). While it has contributed the sum of $178.3 billion dollars to support the interventionist agency, Niger Delta Development Commission, NDDC ,the company says it supports and finance programmes that address social and economic challenges in the Niger Delta through voluntary social investment and that in 2012 alone, it invested the sum of $103.2 billion together with its off shore unit, SNEPco.

This it said was ; ‘’ towards addressing social and economic development challenges in the region. The focus areas of our social investments are education, community health, enterprise development for youths and women and community- driven development initiatives via Global Memorandum of Understanding (GMoU) between Shell companies in Nigeria and communities’’, the company’s 2013 reports said.

The largely misunderstood company has been variously vilified for being the cause of oil spills and environmental degradation in the Niger Delta, but when it commissioned the now muchhyped UNEP report in the Ogoni land and after being a leading sponsor of the Nigerian Extractive Transparency Initiative ( NEITI), its critics have now seen the light and the true colour of the company as the leading friend of the people of the Niger Delta region.

Through a youths and women empowerment project, the Live Wire Nigeria Programme , which it started in the region in 2010,Shell has trained 5,232 Niger Delta youths in enterprise development and management. 2,698 of these youths have been assisted to start up their own businesses through business start-up awards. The company has received various awards and recognition for these unprecedented human capacity development projects , which has now been expanded by the company to cover all the Niger Delta region. In 2011, it received the ‘’African Leadership Magazine Award for Youth Development’’ and the ‘’Social Enterprise and Reports Award’ ‘in 2010.

Through a partnership it signed with NDDC, Shell and the interventionist agency used the platform to create employment opportunities for over one thousand, six hundred women( 1600) youths between the age of 18 and 35.The community-friendly oil giant also committed about $ 45.3 million on innovative scholarship programme and the promotion of educational excellence and academic achievement through Science Fairs and Quiz competitions.

On the environment, Shell stated in its annual report that it has begun implementing some of the findings of the UNEP report as it affects its operations.’’SPDC reviewed these findings and has taken the following specific actions since the report was published. The company said it has ‘’Completed a comprehensive review of its remediation Management System (RMS) and made a number of changes in line with the best industry practice.(ii) reviewed its clean up and remediation practices and confirmed the usage of Bioremediation as the principal techniques for soil and under


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