Nigeria destroys 500 illegal oil refineries in Niger Delta

Lagos (Platts)--7Mar2011/837 am EST/1337 GMT

Nigeria's security forces have destroyed another 500 illegal refineries in the Niger Delta area, in the latest move by the country to combat vandalization of oil pipelines and wellheads that disrupt production, a military spokesman said Monday.

"Men of the Joint Task Force on Saturday stormed Mbiama, a coastal border town between Rivers and Bayelsa states where they discovered some 500 refineries used by some people to refine crude oil," JTF spokesman Timothy Antigha told Platts.

"The operators, we believe, were those that break into the vast network of pipelines in the Niger Delta to steal crude oil which they refine, and sometimes they damage wellheads in the process," Antigha said.

No arrests were made, however, as the operators had fled the area before soldiers arrived.

He added that operations of the illegal refineries were responsible for the recent cases of kerosene explosions in the country which caused more than 10 deaths.

"What they refined does not meet basic refining standard, what they sell to the unsuspecting public is adulterated products," Antigha said.

The refineries were makeshift structures where operators distill crude oil and sell the refined products on the black market at prices lower than the government approved prices.

Antigha linked the increase in illegal refineries dotted across the creeks and swamps of the Niger Delta to the intensive security surveillance of Nigerian waters mounted by security agents which made difficult for oil thieves to transport stolen crude to the high seas for export.

Last December, the JTF said it destroyed over 600 illegal refineries in the region.

Industry estimates indicate that Nigeria loses around 100,000 b/d of crude oil to thieves.

--Staff, newsdesk@platts.com

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