February 24, 2024

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Indigenous Oil Firm Insists Shell Must Account For 16 Million Barrels Of Oil

3 min read

John ODHE, Yenagoa


An indigenous oil firm, Aiteo Exploration and Production Company has asked Shell Petroleum Development Company (SPDC) to account for 16 million barrels of crude oil which it allegedly short-changed Aiteo and the Federal Government.
The indigenous oil firm is alleging that the 16 million crude shortfall recorded at the Bonny Export Terminal between 2016 and 2018 belonged to them and the Federal Government.
This was contained in a statement issued at the weekend by Aiteo’s head of media operations, Mr Ndiana Matthew.
The statement alleged that Shell has been embarking on media campaign of calumny against Aiteo and its executive vice chairman, Benedict Peters, to divert public attention from the missing 16 million barrels of crude and put the indigenous oil firm in bad light locally and internationally.
The statement reads in part: “Objective observer will easily appreciate the motivation on the part of the international oil giant to propagate this campaign of calumny.
“By doing so, the outcome will create unnecessary digressions and distractions from the current issues encapsulated by our demand that Shell accounts and pays for over 16 million barrels of oil belonging to us and the Nigerian government, missing through their actions and activities.
“Hitherto unchallenged evidence of this missing crude is exemplified by the discrepancies in the production figures independently reported by the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR).
“As is standard in the industry, DPR reports actual reconciled production volumes from the wells that flow to the terminal. Their records and statistics align with Aiteo’s reconciled production figures. NNPC, on the other hand, reports crude measured at the tanks in the terminal exclusively managed, operated and controlled by the IOC.
“It is the analysis of these independent reports that demonstrates the glaring discrepancies. Indeed, over the relevant three-year period, the figures from both government agencies set out below make grim, desperate reading:


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“2016 barrels: NNPC 16 million v DPR 22 million. 2017 barrels: NNPC 13.5 million v DPR 21 million. 2018 barrels: NNPC 15 million v DPR 25 million. Critically, clear indication that buttresses the fact that millions of barrels remain unaccounted for is the oil giant’s deployment of unapproved metering equipment at its terminal.
“Complaints by Local Oil Companies (LOCs), including Aiteo, led to an investigation by DPR culminating in the regulatory agency releasing a report that identified irregularities in that respect and deprecated the methodology used by the IOC. DPR issued further directions affirming its non-approval of the equipment used by the IOC.
“In doing so, it imposed a sanction in the sum of N250,000 Naira on the oil giant for violation of Part 1, Section 2(d) of the Mineral Oil Safety Regulations and the provisions of section 51 of the Petroleum Act 1969.
“Despite this, the IOC has continued to use the unapproved metering equipment, continually understating the crude oil due to certain LOCs, including Aiteo.
“While dispute resolution between Aiteo and the IOC continues, this ploy by the IOC to incentivise certain sections of the media to publish false and damning reports targeted at maligning the reputation of Aiteo and its Executive Vice Chairman, Benedict Peters, is being shamelessly deployed as a means of muddying the waters and diverting the public’s attention from the pertinent current issue
“Nevertheless, Aiteo has continued, unperturbed, to undertake and accomplish its identified objectives in its resolve to remain one of the foremost indigenous oil and gas companies in Nigeria.”
In its reaction through its media relations manager, Mr. Bamidele Odugbesan, Shell described the allegation of oil theft at its Bonny Crude Export Terminal as factually incorrect.
The statement said “this is a distinct issue that relates to directives by DPR to SPDC as operator of the Bonny Oil and Gas Terminal, an asset belonging to the SPDC Joint Venture to implement a crude reallocation programme between injectors into the SPDC JV’s Trans Niger Delta Pipelines and injectors into the NCTL.
“Crude allocation review is a normal industry practice to reallocate previous provisional allocated volumes under the directives and supervision of DPR and this is not an exercise resulting from crude diversion, underreporting or theft at the terminal.”

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