Nigeria's largest oil producer, Royal Dutch Shell, says that theft and corruption are undermining its business in the Niger Delta.
As many as 150,000 barrels of crude oil are stolen daily, despite an amnesty plan that slowed militant attacks on pipelines three years ago, Shell Executive Vice President Ian Craig told oil officials, according to BusinessWeek.
Nigeria is Africa’s largest oil exporter, and one of the US’ top suppliers. Currently, Nigeria produces about 2.5 million barrels of oil per day, but Craig says it could produce 4 million barrels daily, Reuters reports.
"The greatest challenge, however, is the massive organized oil theft business and the criminality and corruption which it fosters,” he said, according to Reuters. “This drives away talent ... increases costs, reduces revenues both for investors and the government and results in major environmental impacts."
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Nigerian officials said production is set to increase by 180,000 barrels per day, Reuters reports.
Attacks on pipelines, known as “bunkering” account for most of the lost oil, which is sold on the black market.
"The challenges I have described in the onshore, shallow water and gas sectors have held back development and have unfortunately led to a reduced appetite for exploration," Craig said, according to Reuters.
Shell’s “reduced appetite” comes as the company is under fire from activists, who charge that oil spills have damaged the lives of locals in the Niger Delta area.
After Shell’s Dec. 20 oil spill — the worst in a decade — some environmentalists alleged that in 50 years of Shell's Nigerian operations, 550 million barrels of oil have spilled into the delta. That would be the same as an Exxon Valdez disaster every year, the Associated Press reports.
Amnesty International says that the spills are endangering the people living in the Niger Delta, who are already suffering form widespread extreme poverty, despite the country’s oil wealth. Amnesty International wrote in a February report:
“Shell has, for years, not cleaned up oil pollution properly. As a consequence hundreds of thousands of children, men and women have been exposed to a sustained assault on their human rights to food, water, health and work, amongst others.”
The United Nations issued a report in August 2011, saying that decades of oil spills in the Nigeria's Ogoniland region may require a massive cleanup that could take 30 years, according to the BBC. The UN report said that Ogoniland communities dependent upon farming and fishing have been ravaged.
Meanwhile, in Nigeria's troubled north, witnesses say as many as 30 people were killed Tuesday when suspected Islamist militants stormed a fish market, spraying bullets at the vendors, according to Agence France-Presse.
The Nigerian military denied there were any civilian deaths, but eight militants had been killed, AFP reports.
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Boko Haram, a militant group linked to Al Qaeda, is believed to be responsible for this attack and nearly 300 deaths already this year.