Why oil firms are divesting, by stakeholders

Stakeholders have blamed the ongoing divestment recorded in the oil and gas sector on high operating costs and tough operating environment.

Chief among this is the menace of crude oil theft which has reached an alarming level over the years.

According to oil and gas experts, Nigeria suffers from widespread oil theft and difficult relationships, in most cases, with local communities, driving up the costs of operation.

Mr. Felix Amieyefori Valentine, Managing Director, Energia Limited, an indigenous oil firm, disclosed that his company and four others – Midwestern Oil and Gas, Pillar Oil, Chorus Energy and Platform Petroleum Limited, lost about $72 million (N11.448 billion) in 2012 alone to illegal bunkering, crude theft and pipeline vandalisation.

He said: “Our cluster group lost about $72 million to crude theft in 2012 alone and at the rate we are going; this might increase to $100 million (N16.9 billion) in 2013. This got us thinking and we considered building a refinery.”

– See more at: http://www.vanguardngr.com/2013/07/why-oil-firms-are-divesting-by-stakeholders/#sthash.dO06lLOR.dpuf

About Author: Integrity Org

Integrity Organization is committed is an anti-corruption, research and advocacy organization. Its activities are centered on the aim to reduce the tolerance for corruption in Nigeria.

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