Nigeria: False Declaration - Shell to Refund 2 Million Barrels of Oil

18 February 2021

Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell, will refund about 2.1 million barrels of crude oil from the Trans Niger Pipeline in line with a directive of the Department of Petroleum Resources (DPR).

According to a court order seen yesterday, a federal high court sitting in Lagos had blocked the company's account in January pending the hearing of the case this month.

The company had been indicted by the DPR, for allegedly under declaring 2,081,678 barrels of oil between June 2016 and July 2018 through an unapproved metering system, which it used to misappropriate crude and to short-change local operators.

In a letter dated 28 January, 2021 from the DPR to the Managing Director, SPDC, the regulatory agency stated: "Please be informed that we are unable to accept your request for further engagement on the matter due to your failure to implement the refund of 2,081,678 barrels of oil from TNP injectors (SPDC, TEPNG, NDPR and WSPOL) to NCTL injectors (Aiteo, Belemaoil, Eroton and Newcross) as directed by the department.

"As you are aware, the refund volume is a function of production reallocation (for June 2016 to May 2017) in order to effect correction for the initial water allocation to NCTL injectors with Coriolis meter (by SPDC), which was REJECTED by DPR, vide our letter, Ref: DMR/CTO/COA/COM/V.3/102 and dated 9th February 2018, because it was contrary to statutory requirements."

Recall that the Chief Executive Officer of DPR, Mr. Sarki Auwalu, recently disclosed that most of the crude oil thefts actually occur from land terminals.

However, in a response by Shell to the DPR, through a letter referenced DMR/CTO/COA/COM/V.5/045 on January 28, 2021, stated: "We note your directives as contained in the above-referenced letter and wish to confirm that the Shell Petroleum Development Company of Nigeria Limited (SPDC) will implement the refund of the 2,081,678 barrels of crude oil... over the period from end of January 2021 till November 2021 in accordance.."

Commenting, the Media Relations Manager, Shell Nigeria, Bamidele Odugbesan, denied that the company was involved in crude oil theft.

He said: "The report is laughable, it's not true. The volume of oil said to have been stolen is just unimaginable. There is nothing to substantiate the report. Saboteurs are on the trunk line, from the point of injection to the terminal."

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