Oil industry stakeholders have suggested that persistent vandalism of pipeline in the Niger Delta by saboteurs should be addressed as organised criminality. It is much more than oil theft due to level of sophistication being adopted by the perpetrators.
This was made known at a meeting organised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) with the Independent Petroleum Producers Group (IPPG) and the Oil Producers Trade Section (OPTS) on Thursday , asking to permanently find solution to activities of vandals.
At the meeting, the participants insisted that saboteurs usually described as oil thieves operate with cutting edge apparatus required to move thousands of barrels per day from the vandalised oil facilities to the terminals and vessels which transport to different destinations across the world.
Mr. Gbenga Komolafe, in his address to the participants described the phenomenon as a national disaster. He also called for the need to ascertain the actual number of crude oil losses happening on a daily basis. NUPRC identified the factors aiding organised criminal activities to include, economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholder compromises.
The commission disclosed that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal as well as Brass Terminal. The NUPRC boss further disclosed that Nigeria may have lost as much as $3.27 billion to vandalism over a thirteen months period between January 2021 and February 2022, suggesting that stakeholders must work with the government to reconcile the industry figures.
He also put the average monthly value lost during the period at $233.99 million, while on the average, it estimated that the country may have lost as much as $7.72 million on a daily basis. Mr. Komolafe said, “This is a one-agenda meeting and it centres on the issue of crude oil theft.
The issue of oil theft has become a very worrisome one to the nation, to the government and I believe to you as investors in OPTS and IPPG, even as it is to us as your regulators. “As a responsible regulator, there’s need for us to agree on the way forward and to hear your perspective.
We need to have accurate figures. As a government we cannot continue to use abstract or inaccurate figures in a matter as important as crude oil theft. We have set up a crack team to be able to have the information we need,” he stated.
Komolafe maintained that the challenge remained a disincentive to investment at a time Nigeria was in dire need of foreign exchange, assuring that the government was determined to make the industry more attractive for investors.
He also noted that President Muhammadu Buhari, has given directives to all relevant agencies to get rid of the menace, so that the country can benefit from the rising price of oil and also be able to protect the environment from oil spills. He said,
“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,” he noted.
The commission stated that due to the high level of theft, the country had been unable to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota. Abel Nsa, Senior Technical Adviser to the NUPRC CEO, in his contribution said that the impacts of the phenomenon include loss of value-a situation where government revenue is adversely affected, increased costs-due to frequent repairs of damaged facilities and environmental degradation due to spillages by the activities of saboteurs.
According to him, work teams had been set up to deliberate on workable solutions, identify various responsible parties and propose improvement areas. He added that a public, private approach was being adopted while the implementation of the provisions of the Petroleum Industry Act (PIA) was ongoing.
He noted that on the community side, the outlook was to engage, carry out awareness campaigns as well as ensure prompt payment of community contractors, while the installation of check meters, engagement of competent entities for pipelines surveillance and pipelines integrity assessment were being envisaged.
Richard Laing, Chairman/Managing Director of ExxonMobil, who spoke on behalf of the OPTS, insisted that oil thieves has grown beyond mere theft to what he described as, “organised criminality” involving sophisticated operations. “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 organised 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 organised criminality,” he insisted.
Also commenting, the Independent Petroleum Producers Group (IPPG) represented by the Chikezie Nwosu, Managing Director of Waltersmith Petroman, claimed that about 82 per cent of its members’ production was stolen in the month of February 2022. According to him, the independent oil producers facing an existential threat, Nwosu explained that the oil theft challenge had jumped from about 4 per cent in the past, to a high of 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 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 added