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Oil Theft: Combined efforts, technology to the rescue

oil thieft Oil Theft:

SUCCESS NWOGU writes on strategies adopted by the Federal Government, National Assembly and the Nigerian National Petroleum Company Limited (NNPCL) as well as concerns and suggestions from stakeholders on how to address oil theft and vandalism

 

Worried by the rising menace of oil theft and the attendant revenue losses to Nigeria, especially with the inability of the country to meet its crude oil quota from the Organisation of Petroleum Exporting Countries (OPEC), NNPCL, President Muhammadu Buhari and the National Assembly have embarked on measures to stem the tide.

Nigeria sits atop 36 billion barrels of crude oil reserves and 206 trillion cubic feet of proven gas reserves, but has not benefitted from the current high oil prices. NNPCL’s app NNPCL recently revealed that it would be adopting state-of-the-art technology to gather the muchneeded intelligence that will assist security agencies to go after crude oil thieves and pipeline vandals.

The method appears to be akin to Saudi Aramco’s model of using video surveillance to monitor its pipelines carrying crude oil from wells to flow stations. NNPCL had recently launched an application platform to monitor crude oil theft in Nigeria.

The platform, ‘Crude Theft Monitoring Applications’ was launched in Abuja at the signing of renewed Production Sharing Contracts (PSCs) agreements between NNPC and its partners in oil mining leases.

The platform, according to NNPCL, was created for members of host communities and other Nigerians to report incidents of oil theft and get rewarded. The Group Chief Executive Officer of NNPCL, Mr Mele Kyari, had lamented the negative effects of vandals and urged companies to report suspicious sales even in the international arena. He said: “The actions of vandals on pipelines have become a difficult thing to deal with.

There are still on-going activities of oil thieves and vandals on our pipelines and assets, very visible in the form of illegal refineries that are continuously put up in some locations and insertions into our pipeline network. We, at NNPC, will guarantee absolute privacy on any such report that comes and I’m directly managing this myself as no one will be exposed.

“Secondly, on an international scale, companies must report suspicious sales of crude. Every oil that leaves this country has a unique registration number that is issued by NNPC and also validated by the OPEC commission. And I know that the destination reporting framework has been put up by the Commission.

“Ahead of this, we are also creating a platform where end-users, particularly investors and traders, can validate the crude they are handling from Nigeria as their only source. “If they don’t do this, as I always say, our companies are international, which means they are part of the riggers and whenever we discover this, we will take necessary actions against them.”

Presidential order President Muhammadu Buhari, who is the Commander-in-Chief of the Armed Forces, also recently gave a marching order to the Nigeria Security and Civil Defence Corps (NSCDC) to stop crude oil thefts and vandalism in the Niger/ Delta region and ensure that all perpetrators of such crimes are brought to justice.

The directive was revealed by the Commandant-General of NSCDC, Dr Ahmed Audi, who further said that the president had ordered NSCDC to use all means possible to protect the nation’s critical assets and infrastructure.

According to him, a panel of inquiry has been established by the Corps to probe alleged acts of collusion and compromise of some NSCDC personnel who allegedly compromised their mandate to arrest oil thieves and vandals. Audi, while addressing states Commandants, zonal Commandants as well Assistant Commandant- Generals and Deputy Commandant- Generals at a strategic meeting at the headquarters of the Corps in Abuja, urged all the personnel to buckle up and stop illegal oil bunkering, vandalism and assaults on Nigeria’s critical national assets.

According to him, Nigeria has lost enormously to crude oil thefts and vandalism of infrastructure with the attendant negative economic impacts on the country. He claimed that about 200 suspects and 300 trucks containing stolen crude oil had been arrested within a year, and over 50 illegal refineries in the Niger/Delta region destroyed.

 

President Buhari, during the inauguration of the Presidential Committee on National Economy, also said crude oil theft must be addressed. He lamented the impact of the menace on Nigeria’s revenue and noted that production of crude oil owing to economic sabotage had led to a decline at half the nation’s OPEC quota. While promising that his administration would work assiduously to reverse the trend, Buhari urged members of the committee to address the menace.

Members of the committee include Vice President, Yemi Osinbajo, who is also Chairman of the National Economic Council (NEC), Sokoto State Governor, Alhaji Aminu Tambuwal, who represents the Nigeria Governors’ Forum and other members of the cabinet.

NASS’ order to security forces Not only that the executive arm of government is concerned about oil theft and its negative consequences, the leadership of the Senate also ordered security forces to go after oil thieves and bring them to justice.

The Senate leadership, during a recent meeting with military and intelligence chiefs, to review progress made in the fight against insecurity, decried the massive loss of crude oil to illegal bunkering in the Niger Delta and its adverse impacts on Nigeria’s economy.

The President of the Senate, Ahmad Lawan, presided over the meeting, which was a follow-up to a similar one held in August. Deputy Senate President, Ovie Omo-Agege, other principal officers of the Senate and chairmen of security-related committees of the senate, attended the meeting.

Also present were the Chief of Defence Staff, three service chiefs, Inspector General of Police, Directors-Generals of National Intelligence Agency(NIA), State Security Service(SSS) and Commandant General, National Security and Civic Defence Corps while the Acting Comptroller General of the Immigration Service was represented. Lawan urged security agencies to arrest oil thieves and ensure  they are prosecuted.

He said: “Those who have made every effort to steal our oil at an industrial scale, I’m sure some of them may not be that lucky to escape. We want to see trials of people who are caught because when that happens, citizens will know that nobody, no matter how high that person is, can go scot-free if he or she decides to get involved in this kind of criminal activity.

“Of course, I will appeal to our courts – the judiciary – once we have cases like this, we must give expeditious consideration, because these are the issues that are today militating against our stability and even against our democracy. “We lose so much of our oil. As of the last count, the report was that we export just a little above 900,000 barrels.

And that is just about 50 per cent because it is supposed to be 1.8 million barrels per day and that is halving our revenues and our resources for development. So, I want to appeal to the judiciary to give special consideration once a suspected oil thief is taken to court. We must prosecute them. It is not enough to just take away whatever they have stolen and say go and sin no more.”

Losses to theft

The Group Chief Executive Officer, NNPC Limited, Mele Kyari, had, in April, disclosed that Nigeria lost $4 billion to oil theft at the rate of 200,000 barrels per day in 2021. He added that the country already lost $1.5 billion so far in 2022 because pipeline vandalism has escalated. He further said that Nigeria was losing 95 per cent of oil production to thieves at Bonny Terminal, Rivers State.

In addition, the Group General Manager, National Petroleum Investment Management Services (NAPIMS), Bala Wunti, during a recent tour of NNPCL facilities, said the company loses $700 million monthly as a result of oil theft and vandalism at terminals.

Wunti, who heads NAPIMS, which is a corporate services unit in the upstream directorate of NNPCL, said the pipelines — particularly those around the Bonny oil export terminal — could not be operated due to the activities of oil thieves and pipeline vandals.

He said: “If you’re producing 30,000 barrels a day, every month, you get 1,940 barrels. So, what it means is that you can take it to 270 every four days, calculate it in a month; you will have seven cargoes on a million barrels, that’s seven million barrels. “When you multiply seven million barrels by $100 that is $700 million lost per month, adding that about 150,000 barrels expected have differed, we are not producing due to security challenges,” he said.

Also, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, said Nigeria lost $1 billion in revenue during the first quarter of 2022 as a result of crude oil theft.

Oil theft has official partners- Falana

A Senior Advocate of Nigeria,  Femi Falana, during a two-day leadership retreat organised by the Labour Party in Abuja, with the organised labour, captains of industries and other stakeholders both in the private and public sector, said government could not feign ignorance concerning the identities of people with unwholesome conduct in the upstream and downstream sectors of Nigeria. He warned that until this was addressed, the masses would continue to live at the mercy of a few criminals.

He said: “Today, government is thinking of increasing fuel price to N500. I want to say this here publicly, about seven years ago, government spent a colossal sum of N50 billion to acquire software by the Petroleum Equalisation Fund to track and monitor all tankers that load fuel in any part of the country. “Today you are being told Nigerians deserve to be punished because of the criminal activities of a few people.

That government will punish the people because of the criminal activities of a few. “We have heard now that the Comptroller General of Customs has come out publicly to say that it’s impossible to smuggle daily about 10 million litres of fuel. Where did they pass?

“Nigeria is the only country where government will come out and say we are losing $7 million every day because of oil theft. Nigeria is the only oil-producing nation without data to know how much oil it is producing daily. “Five hundred tankers loading 36,000 litres of fuel. NNPC has confirmed that yes, this is what is going on.

Who are the oil thieves? They know them. Oil theft and oil smuggling, all have official partners.” The SAN said there was an organisation called Lloyd, which has records of all oil transactions in the world. He said: “The Federal Government has access to that and yet we are saying we don’t know who is stealing our oil or where the oil is being taken to.

“So government knows and if they want information, we can make it available to government. If they are sure they want to know those who are stealing oil and those who are spoiling our country.

“In the 2023 budget, government said they are going to spend N453 billion on fuel subsidy. By June, the president presented a supplementary budget to the National Assembly that increased the budget to N4 trillion. The National Assembly did not debate it, they passed it.

“Now the minister of finance is saying that that figure will go to N6.5 trillion, that in the budget of next year, there would be no money for capital project. “I challenge the Nigerian Labour Congress, Trade Union Congress and others that you must get to the root of this criminality once and for all.

We will decide today. We will set up a committee. I have all the right information to expose all the criminals behind the smuggling of fuel and criminals behind oil theft.”

Last line

A former Governor of Anambra State, Mr Peter Obi, had said it was saddening that Nigeria was the only OPEC country that is not benefitting from the increasing oil prices and is not meeting its OPEC crude oil quota.

He said: “Our oil is today being stolen. For oil to be stolen, a ship has to be cleared by the Navy to enter Nigeria’s waters. Who is approving the ship coming in and who is stealing oil? N1.3 trillion is involved in these shady deals

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