THE TIMES (UK): Finding a way out of the bunker: “It is a billion-dollar-a-year business, says Chris Finlayson, chairman of Shell in Nigeria. About 50,000 barrels are being siphoned daily from the web of pipes that link hundreds of wells to Shell’s terminals at Bonny and Forcados.” (ShellNews.net) 13 Nov 04

November 13, 2004

By Carl Mortished

IN THE Niger Delta, a local paper recently published an advertisement — notice of a peace treaty between warring villages. They announced that they had agreed which village had the right to bunker oil from Shell’s pipeline.

It is a billion-dollar-a-year business, says Chris Finlayson, chairman of Shell in Nigeria. About 50,000 barrels are being siphoned daily from the web of pipes that link hundreds of wells to Shell’s terminals at Bonny and Forcados.

The theft is sophisticated, no longer a business of hacking holes in pipes and pouring spilt crude into buckets until a stray cigarette causes a conflagration. Today, the bunkering is done with proper valves, the crude piped into barges by Kalashnikov-toting bandits. Offshore, the barges transfer the crude into coastal tankers and sail off to market.

“One of the unfortunate spin-offs of democracy has been local politicians arming people,” Finlayson says. “It got out of control and when the politicians failed to deliver, oil bunkering became an attractive way of making a living.

The obvious solution, monitoring shipping in the sea channels of the Delta is proving less than easy. “They have had problems with the alignment of naval officers,” says Shell’s Nigeria chairman.

Seized tankers have a habit of disappearing after arrest, notably the African Pride, found carrying 11,000 tonnes of stolen crude. Impounded last year, it disappeared. Three rear-admirals are defending themselves in court-martial proceedings and seven local governors are being investigated.