The Managing Director of Shell Petroleum Development Company (SPDC), Mr Mutiu Sunmonu has said that Nigeria loses six billion dollars (about N942 billion) yearly to crude oil theft.
Sunmonu made the statement in a paper presentation titled “Nigeria’s Oil and Gas Strategy in the Next Five Years: A new dawn to boost investment and production”, at the ongoing Nigerian Oil and Gas conference, recently.
He said militancy in Nigeria had been replaced “by industrial scale oil theft and sabotage.
“We, and others, have had to shut in significant production, spend huge amounts on replacing and repairing hardware and deploying massive resources to clean up oil spills,” he said.
Sunmonu urged the Federal Government to tackle the insecurity in the oil and gas industry to attract investment.
He said tackling insecurity in the sector and proper funding of the joint venture projects would encourage tremendous development in the country.
Sunmonu said there was a need for value-driven partnerships, technology development and capacity building as leeway to attracting investment.
He urged the Federal Government to provide a conducive operating environment and fiscal terms leading to competitive and attractive rates of return in its attempt to encourage investment.
Sunmonu decried the high cost of doing business in Nigeria and the spate of oil theft and pipeline vandalism, which had contributed negatively to the production level.
“For instance, oil theft and sabotage which lead to lost loss production and even more cost and resource pressures,” he said.
Sunmonu acknowledged the Federal Government’s efforts at addressing the challenges but said more needed to be done to deal with the situation.
“The society needs to know it can trust both business and government to function in a way that balances risks and rewards,” he said.
Sunmonu said it was important to have a strategy that could help grow the Nigeria oil and gas industry, which was currently facing serious competition.
“We must have a conducive operating environment and fiscal terms leading to competitive and attractive rates of return.
“Value-driven partnerships, technology development and capacity building are some of the actions that can be taken to boost investment and growth,” he said.
He emphasised the need for government to boost production and grow reserves.
Sunmonu said that in spite of production from emerging oil producing countries around the continent, Nigeria still produced more than half of Sub-Saharan Africa’s total production.