The Federal Government has raised the alarm over the rising rate of crude oil theft in the Niger Delta, disclosing that about $3.27 billion worth of oil had been lost to vandalism and theft in the past 14 months.
The government also said high-level cases of oil theft had become a threat to the country’s corporate and economic existence, with the industry now thinking of transporting crude oil from fields to export terminals by trucks.
This came on a day the Defence Headquarters announced the destruction of 49 illegal refineries and arrest of 70 oil thieves and pipeline vandals in the Niger Delta.
In a presentation at a stakeholders’ engagement in Abuja yesterday, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said the government is extremely worried about the huge loss of oil revenue to vandals.
‘Crude theft mostly from Bonny, Brass, Forcados’
Chief Executive of NUPRC, Gbenga Komolafe, who disclosed this, said much of the crude oil losses came from Bonny Terminal Network, Forcados Terminal Network and Brass Terminal Network.
He listed factors aiding the criminal activities to include economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholders’ compromises, stressing that due to the high level of theft, the country had been unable to meet its OPEC production quota.
Komolafe said the government was determined to end the menace, so the country could benefit from the rising price of oil and also protect the environment from oil spills.
He said: “The issue of oil theft has become a very worrisome one to the government of Nigeria and I believe to you as investors too.”
He said it was important that government and oil companies work together to resolve the issue, especially on the agreed volume of oil lost to vandals, since the issues strike at the heart of federation revenue.
“You will recall that in the last one week, we have set up a crack team to determine the accurate figure because as a government, we cannot continue to act on the basis of an abstract or inaccurate figure in dealing with an important issue as crude oil theft because the issue goes to the heart of federation revenue.
“The concern of the government is to increase our national oil production. Basically, we are an oil economy and when the upstream is sick, it affects the well being and health of the country.
“The situation happening in the upstream is getting to the level of threat to the existence and well-being of Nigeria. As responsible regulators, we are very concerned about it.
“We have been doing a lot and we are not relenting. We will do everything possible to increase oil production in a manner that will make the nation benefit from the upward swing in the international price of crude oil,” Komolafe added.
Reacting to proposals by some operators that crude oil could be transported by trucks as an alternative measure, the NUPRC boss stated: “I quite agree that alternative evacuations that are being proposed now will be just an intervention mechanism that cannot be a permanent solution to the problem we are facing.
“I will take note of that as a regulator because already, people are pressured by the challenge to look for alternative solutions. They are seeing it (trucking) as a solution but they are not having a long-term look at the effect that the criminals could equally switch their strategies (to attack the trucks).”
It’s organized crime – IOCs
In his presentation, the Chairman/Managing Director of ExxonMobil, Richard Laing, who represented the Oil Producers Trade Section, OPTS, of Lagos Chamber of Commerce, pointed out that though the issue is not new, it had grown from just oil theft to organized criminality, with the sophisticated operation.
He said: “As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly, it is a threat to investments, a threat to the health of the industry and wealth of the nation
“It is important that the stakeholders integrate their activities and their thoughts. As OPTS, we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective.
“The language is very important and I think we use theft rather quickly. I don’t think this is theft, this is organized criminal activity. The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn’t some guy coming along and tapping into a pipeline and taking container crude oil. It is organized criminality.’’
82% of production was stolen in Feb
On its part, the Independent Petroleum Producers Group, IPPG, disclosed that about 82 per cent of its oil production was stolen in the month of February 2022.
Represented by the Managing Director of Waltersmith Petroman, Chikeze Nwosu, the group said independent producers are facing existential threats.
Nwosu explained that the oil theft challenge had grown from what it used to be in the past when it was just about four per cent, lamenting that it was as high as 91 per cent in December 2021.
“The TNP (Trans Niger Pipeline) is the major issue. We have seen crude theft grow from single-digit percentages to 91 per cent in December for some of the operators who produce into the TNP, 75 per cent in January and the February report we got has an average of 82 per cent,” he said.
Nwosu pointed out that the situation seemed to be getting worse, despite all efforts to curb it, and called for urgent action from the government and stakeholders.
FG reads riot act to oil thieves
At a separate on-the-spot assessment of some pipelines damaged by vandals at Ibaa community in Emeoha Local Government Area of Rivers State, Minister of State for Petroleum Resources, Timipre Sylva, said the Federal Government would no longer condone any form of criminality in the nation’s oil and gas facilities and installations.
He said aside from causing huge losses for the country, the criminals involved in pipeline vandalism are also destroying the livelihoods of locals and the environment.
To resolve the issue, he said: “The community must be involved; the security arm must be involved and the third arm, which is the operating public must be involved. I want to let everybody know that these criminals have their days numbered because the country has lost so much from their activities.”
Also speaking, General Irabor, who said the military will deploy a different strategy and a new drive by pursuing not only the criminals, but also their sponsors, said: “We are not only zeroing in on the criminals, but also on those who are supporting them.”
On his part, the GMD/CEO of Nigerian National Petroleum Company Limited, NNPC, Mele Kyari, lamented that the scale of crude oil theft and pipeline vandalism seen now was beyond explanation, adding that all hands must be on deck to contain the spate of crude oil losses in the country.
While appreciating the current leadership of the military, Kyari expressed confidence that through a collaborative effort of government, security agencies, host communities and oil companies and deployment of the right technology, the menace would be contained.
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