Alarming crude oil theft: Is Nigerian govt. helpless?

EnergyDay Editorial

President Muhammadu Buhari came strong in the saddle when he resumed office as Nigeria’s 15th Head of State. Within weeks of resuming office, the entire civil service including the petroleum establishment sat up in preparation for the demands of corrective governance on the wings of his anti-corruption mantra.

The tempo soon dwindled, however, as full-scale oil thefts took complete reign while insurgency, abduction, banditry, and corruption became heightened.

President Muhammadu Buhari today, stands in the eyes of the storm, and in retrospect, EnergyDay wishes to encourage him to gird his loins afresh, stand tall, be courageous and remain authentic as an icon of anti-corruption

The scale and international dimension of crude oil theft may well serve as the rallying point for every patriotic Nigerian to reclaim the country from unscrupulous persons, some of whom are Nigerians working in collaboration with foreigners.

President Muhammadu Buhari during a session with editors of major newspapers in 2016, sent stern warnings to members of the Niger Delta Avengers and other agitators operating within Nigeria’s territory,  insisting that the government will deal with all militants and kidnappers who threaten the economy and geographical integrity of the country.

In April of the same year, he was in Beijing, China, meeting with members of the Nigerian community in China. He warned vandals and saboteurs blowing up oil and gas installations in Nigeria to desist immediately or face the same drastic action being taken against the extremist Boko Haram sect by the Armed Forces.

In November 2016,  President Muhammadu Buhari when he was decorated as Grand Patron by the prestigious Nigerian Academy of Engineering, pointed accusing fingers at the engineers for colluding with vandals to hit oil installations.

He was quoted as having said that ordinary Nigerians, without sophisticated technical know-how,  would not go far into the sea to vandalize pipelines.

In 2018, while issuing yet another stern warning to pipeline vandals through a statement released by Garba Shehu,  Senior Special Assistant to the President on Media and Publicity, the President gave frightening statistics on the number of times and frequency of pipeline attacks. “Within six months,  we recorded 684 cases of vandalized pipelines in a pattern of persistence,” the statement read.

He further said in that statement that each time the pipeline was repaired, the vandals resumed their activities,  in connivance with the security agents, who are reported to have set up toll gates collecting fees from them.

To date, he has not relented in the onslaught against those who have practically brought the country to its knees and in debt, because of oil thefts.

There is no denying the fact anymore, that senior-level officials in the Federal Government are more complicit in the ongoing crude oil theft saga, which has now, convincingly portrayed Nigeria as a bad odor in the global environment.

Given the posture of the President as incorrigible, strict, upright, and the de facto minister for petroleum resources, the latest outcry on the menace of crude oil theft has certainly come to the point where a hard decision is inescapable.

Agreeably, select political office holders at various times have been found guilty of felonies, but the industrial size of this illegal activity, operating as a parallel market alongside statutorily recognized institutions has gone too deep to be expunged without a brawl.

The plundering and stealing of crude oil gained public attention during the second republic and got progressively worse from Ibrahim B. Babangida’s era to the present. We knew all this long ago and we have been saying so to deaf ears.

Should we now feign surprise at the scope and vastness of the plundering, which now spans across all the streams?

It didn’t take too long for the natives in the Niger Delta region, for instance, to become offensive when they could no longer withstand the brazen plundering of a resource meant as the commonwealth of the Nigerian Nation-State.

President Umaru Yar’adua’s emergence and his attempt to reform a rotten situation proved futile because the thieves were protected while amnesty and N65,000 per month were given to 30,000 protesting militants.

What happened subsequently snowballed into widespread construction of artisan refineries by the natives, including pipeline vandalism and the abduction of oil and gas personnel, especially expatriates.

And now? It has all gone from bad to worse.

Mele Kyari, the Group Managing Director(GMD) of the NNPC,   stopped short of mentioning the exact names of the thieves, but he went close enough to inform the nation about the clan they came from.  He said without mincing words that “Our elites” are the thieves.

Addressing the All-Nigerian Guild of Editors Conference in October 2021, Mr. Mele Kyari, said that the elites, and not the poor masses, are responsible for the theft of crude oil in Nigeria’

The Director-General of the World Trade Organization Dr. Nkozi Okonjo Iweala, while serving as the country’s coordinating minister for the economy and minister for finance, said on the floor of parliament, “We are losing revenue; 400,000 barrels of crude oil are lost daily due to illegal bunkering, vandalism, and production shut-in.”

The Nigeria Extractive Industries Transparency Initiative (NEITI) said that the country lost 41.9 billion dollars to stolen and refined crude oil products in ten years.

Between 2011 and 2014, reliable data showed the country lost over Usd25bn as a result of theft,  and in 2019, the country lost 42.25 million barrels of crude oil valued at Usd2.77bn.

However, things have now reached a tipping point, with the country losing a whopping USD 3.2 billion between January 2021 and February 2022 alone!,

According to statistics presented at a meeting in Abuja recently, between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oil Producers Trade Section, and the Independent Petroleum Producers Group (IPPG).

The Group Managing Director of the NNPC, Mele Kyari gave excellent insight and a good description of the thieves but the patriotic will on the part of the Presidency to tackle this problem may not be doubted.

EnergyDay holds the firm conviction that President Muhammadu Buhari should rise up decisively and declare a State of Emergency on this issue with a timeline to stop this stealing.

Our crude oil production profile is stagnated at a time when global demand is on the rise but the intervention of the Presidency could turn the tide to boost production!

In fairness, we must emphasize that this problem didn’t start with President Muhammadu Buhari but then, it shouldn’t degenerate beyond this level under his watch.

Industry stakeholders are unanimous in what is considered an action points agenda to resolve this obviously tough challenge and those recommendations resonate with the beliefs of EnergyDay.

First, the Presidency should consider declaring a State of Emergency in the oil industry as a specific action against oil theft and pipeline vandalism

Secondly, the Petroleum Industry Act should  be freed from the constraint influence of the NNPC and be allowed to drive the industry more transparently and more vigorously.

Thirdly, the imminent and complete divestment of the IOCs should be bridged more quickly by the application of the ‘drill or drop provisions of the PIA. This will allow non-IOCs to assume control of divested assets and convert them into profitable operations

Finally, the interests of Host communities as oil resource beneficiaries will then be rolled out as provided for in the PIA.

President Muhammadu Buhari is urgently required to roll up his sleeves and weigh in strongly in changing the oil theft narrative

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