Alleged 16m barrel crude theft: Lawyers, CSOs drag Shell before US, Nigeria authorities

Some Nigerian lawyers and Civil Society Organisations have dragged Shell Petroleum Development Company of Nigeria Limited, Shell Nigeria Exploration and Production Company Limited and their other allied companies like Shell Western Supply and Trading Limited before Nigerian authorities over alleged crude oil theft.

Their petition was drafted by a consortium of lawyers for human right and justice led by Barrister Peter Abang, separately addressed to President Muhammadu Buhari; the Chairman of the Economic and Financial Crimes Commission; as well as the US Security and Exchange Commission.

In the petitions dated March 3, 2021, the petitioners accused Shell entities of allegedly stealing over 16m barrels of crude oil and selling same in the international market and appropriating the proceeds.

They therefore, called on the authorities to investigate, prosecute and sanction the firm for the theft.

The petitioners who also called for the seizure of the firm’s assets, sought compensation and recovery of the value of the stolen crude at prevailing market price identified Shell as the operator of the Bonny and Forcados crude oil export terminals with capacity of 5,700,000 barrels and 6,289,832 barrels from both terminals and making the company the largest exporter of Nigeria’s crude oil.

They made it known that “the firm was also the owner and operator of the OML 29 and the Nembe Creek Trunk Line (NCTL) which they divested in 2015 to an indigenous company, AITEO EASTERN E & P COMPANY LIMITED.

The petition partly read : “the methodology for calculating the water and crude theft allocations is determined by the Department of Petroleum Resources (DPR) on behalf of government and this methodology is reviewed periodically in line with the Petroleum Act.

“In 2016, the DPR approved methodology was to be conducted with the use of a Leased Automatic Custody Transfer (LACT) Unit Metering System and not any other system.

“Following several complaints, the DPR investigated and discovered that instead of the approved metering system for calculating water allocation and crude theft, Shell deployed the Coriolis Flow Meter which clearly underreported the volume of crude which passed to the terminal thereby short-changing the Local Oil Companies and ultimately denying the country of scarce revenue which shell stole and appropriated.

“Upon conclusion of investigation, the DPR wrote a letter dated 9th February, 2018 to Shell wherein it notified Shell that the Coriolis Flow Meter was installed by Shell without approval among other indictments in the letter.

“The DPR went ahead in the same letter to sanction Shell and imposed a penalty of Two Hundred and Fifty Thousand Naira (N250, 000:00) only for violations of the Petroleum Act and Mineral Oil safety Regulation. A copy of this letter is hereby attached and marked as Annexure 1.

“However, this penalty by the DPR is not a recovery of the stolen crude or its monetary value, or the attendant lost revenue to government. Hence there is the urgent need for the commission to intervene and recover the full value of all the stolen crude from Shell which it stole through the use of the unapproved metering system and deliberate understating of the volume of crude oil which was injected into the Bonny Oil Terminal.

“This deployment of an unapproved metering system by Shell was done to steal the crude oil and its proceeds, defraud the real owners of the products, wrongfully appropriate to itself the crude oil and proceeds which do not belong to it and also unlawfully convert and retain to itself the crude oil and its proceeds.”

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