The Federal Government has disclosed that Nigeria lost about $3.27 billion worth of oil in 14 months to crude oil theft and pipeline vandalism in the Niger Delta.
The government said high-level cases of oil theft have 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.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in a presentation at a stakeholders’ engagement on oil theft in Abuja yesterday said the government was extremely worried about the tragic situation.
This is as the Independent Petroleum Producers Group (IPPG) said about 82 per cent of its members’ oil production was stolen in the month of February 2022.
The Commission stated that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal Network and Brass Terminal Network.
It listed factors that were aiding the criminal activities as: economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholder compromises.
The commission stated that due to the high level of theft, the country has been unable to meet its OPEC production quota.
Speaking on the issue, the Chief Executive of NUPRC, Engr. Gbenga Komolafe, said the government was determined to end the menace so that the country can benefit from the rising price of oil and also to protect the environment from oil spills.
According to him, “the issue of oil theft has become a very worrisome issue to the government of Nigeria and I believe to you as investors too.”
Engr. Komolafe said: “You will recall that in the last one week we have set up a crack team for us 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.”
He noted that “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 wellbeing and the health of the country.
“The situation that is happening in the upstream is getting to the level of threat to the existence and wellbeing of Nigeria.
As a responsible regulator 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”.
Meanwhile, represented by the managing director of Waltersmith Petroman, Chikeze Nwosu, the group said the independent producers were facing existential threat.
Nwosu explained that the oil theft challenge has grown from what it used to be in the past of about four percent to a high of 91 per cent in December, 2021.
According to him, “The TNP (Trans Niger Pipeline) is the major issue. We have seen crude theft grow from single-digit percentages to reports of 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 pointed out that the situation seems to be getting worse despite all efforts to curb it. He, therefore, called for urgent action from the government and stakeholders.
In his remarks, the chairman/managing director of ExxonMobil, Richard Laing, who represented the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce, pointed out that though the issue was not new, it has grown from just oil theft to organized criminality with 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 taping into a pipeline and taking container crude oil. It is organized criminality”, Laing stressed.