The Nigerian Government has been challenged to demonstrate that it is not the major sponsor of the massive crude oil theft happening in the country, by publishing names and revealing the identities of high-profile individuals behind crude oil theft for prosecution.
This was the view shared by experts during the high-level strategic dialogues at the just-concluded 2022, Nigerian Association of Petroleum Explorationists (NAPE) all-convention luncheon, with the theme: Surmounting Insecurity and Threat in the Oil and Gas Industry: Evolving Strategies, in Lagos.
Dr. Layi Fatona, Director Niger Delta Western, in his keynote address at the session, while commenting on the right platform for insecurity solutions for Nigeria’s national energy ecosystem, disclosed that activities of oil thief and Nigeria’s decreasing oil production are two existential threats to the survival of the country.
He noted that the Nigeria Government and oil and gas companies have not sufficiently engaged, deployed, and utilise the capacity of the host community to protect oil assets, despite the passage of the Petroleum Industry Act(PIA).
The Director of NDEP noted that the host communities are critical partners needed in efforts to unlock the real value of a sustainable oil and gas industry in Nigeria, adding that no attack would have occurred on any oil and gas installations if the members of the oil producing communities are patriotically engaged and rewarded.
He said, “At ND Western Limited operates a very strong partnership with the host communities who play a key role in safeguarding our oil and gas pipeline right of way.
“I can tell you for a fact that we have never witnessed production shut down due to activities of vandals on our facilities. It is only when the product gets to Nigerian National Petroleum Corporation(NNPC) and third parties’ facilities that most of the product get stolen by the so-called oil thieves.
“Government needs to make a very loud statement that crude oil vandalism and theft are not state-sponsored, because that is the feeling that we are getting. We can’t be losing over 900,000 barrels of crude oil per day despite our production quota, while the Government and relevant authorities are showing a very casual attitudes toward the whole thing. Evidently, there is something that is going on that we do not know.
“While collaborations amongst security agencies in the Niger Delta is critical, I think the collaboration is not effective enough. The security operatives in the Niger Delta are just not doing enough.
“Government needs to show that it is not the sponsor of oil theft, by prosecuting whoever is perceived as the perpetrator of this crime. Evidently, the magnitude of criminal activities going on in the Niger Delta is not perpetrated by those stealing with kegs and drums, but by institutionalized thieves tapping from the export trunks and moving huge volumes of crude oil in vessels. These people have the capacity to move millions of barrels in vessels through the export jetties.
“Over the years, there is a significant level of mistrust between the host communities, oil-producing companies, and government. So many promises were made in the past that have not been fulfilled.
“For instance, the NDEP has been operating in the Niger Delta for almost 30 years and has never recorded one day of production shut linked to sabotage. It has always been something else. We have been able to achieve this through host community partnerships and relations nurtured over years with deep trust.
“I think, if this very simple template is adopted with the PIA, Nigeria will be able to increase its production substantially. We need to pay more attention to the short, medium, and long-term goals of the PIA. This can be achieved by speaking the truth, and fulfilling whatever you promised to do. Don’t skip promises for so long.
“Oil theft is a serious national concern threatening our existence as a nation because the oil and gas sector is the lifeline of our economy, providing about 80 percent of the country’s export revenue. It is too much of a burden on a country, with this size of population and the magnitude of energy poverty to continue to manage.
” We are getting more and more into the negative zone. All the stakeholders including Government, IOCs and LOCs must not underestimate the consequences of neglecting the host communities in our operations. We need effective collaborations between industry practitioners, the community in a completely positive way.
Mr. Fatona further noted that in some oil producing countries have developed technologies dedicated to monitoring pipelines, denying saboteurs from having access to the operator’s right of way.
“There is some sensitive technology that covers as much as 23 meters wide. If any infiltrator comes around the oil installations, such a person would either be electrocuted or caught. I am not sure whether it can be allowed here in Nigeria. I don’t think we have leveraged the potency of technology enough.
The MD of NDE&P revealed that Nigeria can deal with crude oil theft if it is committed to domestic consumption through the refining of the crude oil in Nigeria with the activations of all the local refineries in the country.
He said, “Increased domestication of crude oil refining is a very critical remedy to crude oil theft and pipeline vandalism. It is not too late for us to start redirecting our attentions toward this sustainable solution. Domestic refining remains the veritable way to scale up our production capacity.
Dennis Amachree, Principal Partner, Zoomlens Security Solutions, a panelist at the session, while highlighting actionable strategies to ending insecurity within the oil and gas industry, revealed that trust has been a major issue responsible for the tension in the Niger Delta.
According to him, all the Memorandum of Understanding (MOUs) signed between the government, and multinationals with the host communities have failed and are not well managed.
He said, “Members of the communities are employed as contract workers. None of the indigenes have advanced to the top management level in some of these oil companies and their joint ventures. This is one of the factors responsible for the mistrust.
“Oil-producing communities need more than artisanal employment, they are asking for real participation across the production value chains. They need to be part of the entire process and also have a shared interest in investment opportunities and production revenue.
“Apart from the provision of the PIA, host communities should have an equity share in the ownership of the assets in their environment. The 3 percent annual allocation to host communities from the operator’s operating expenditure by PIA is very minimal.
“This would give them a sense of responsibility for the protection of the oil facilities and assets. Some of these communities do not have access to electricity and good water, while some oil companies keep flaring away gases that should have been converted into producing electricity for the people.
Retired Director of the State Security Service (SSS) further suggested that institutionalised oil theft is the major scourge threatening Nigeria’s existence. He, therefore, charged the government name and prosecuted these big oil thieves who run big operations in the Niger Delta region.
He said, “There have been discoveries of illegal underwater pipelines and platforms connected to the export trunk line.by the NNPC and the Federal Government in recent times. The names of these individuals have not been declared to the public, and some of them are yet to be arrested and prosecuted. The issues have been swept under the carpet.
“Shell Nigeria has commenced production, while those people involved in this criminal activities have moved on with their lives without deterrent. This is not to say the government is directly involved, but it is evident that the individuals involved are within the government, IOCs, and security operations.
“Today, Nigeria does not have data showing the actual volume of crude oil produced locally vis a vis the barrels of crude oil that we export. He also noted that another major issue is trust, adding that it is high time for the stakeholders to honestly tell the truth and eliminate the thieves within the system.
“The government should expose and arrest the thieves within its system. The situation cannot be addressed if we fail to tell ourselves the sincere truth. “Unfortunately, all the investment in sophisticated technology dedicated to dealing with oil thieves has failed to achieve the desired result because the oil thieves are within the system.
“The thieves within the system have been frustrating every attempt by the government to install technology to monitor crude oil theft in the country. Attempts to replicate the deployment of technology like Saudi Arabia for surveillance oil installations from the control rooms have been sabotaged by the institutionalised criminals within the government. These things have been going on for years because some people have been benefiting from it.
“Ofcourse, the present administration has not shown enough commitment to addressing this crisis. We may be lucky, in 2023, after electing the right leadership to run the affairs of the country. Nigerians must be sensitive to electing the right leadership in the next general election to ameliorate the crisis.
“If crude oil and gas is the lifeline of the country and resources are stolen by the managers of the resources, then we should be prepared to face the aftermath when these resources would be no more. We have seen the lobby by these same set of people to influence elections and control the political space in order to safeguard and guarantee their access to control of petroleum resources,” the security expert said.
Amachree, therefore, noted that the rising cases of oil theft in the country pose a great risk to the survival of the economy, adding that it is an existential threat.
Osten Olorunsola, Chairman, the Energy Institute of Nigeria, In his intervention during the panel session disclosed that crude oil which is supposed to be a common blessing is now the destroyer of the economy. The activities of the thieves are actually a complete breakdown of the ecosystem.
According to Chairman/Chief Executive of Energetikos Limited, there are two levels of crude oil thieves, those stealing small barrels of crude oil at the community level and organised criminals stealing crude oil with large vessels. He said that solution to one can not be deployed to resolve the other problem.
He said, “First problem is the host community and associated crises. These are crises that have just shown up within a few years. They were not here 20 years ago, when everyone including organisations in the sector used to be afraid of being associated with oil crimes.
“In those days, the stakeholders and the oil-producing communities shared a sense of collective ownership and interests in these oil assets.
“We all used to see Nigeria, as our country. People had some feelings of relative inclusiveness and committed to shared prosperity and in fact, some oil workers were integrating with the producing communities. Poverty was never a factor and there was no incentive to go into pipeline vandalism.
“As of that time, the IOCs that was in charge of the production, had a superlative operating system and regulatory framework than the DPR. They were forced to operate at international standards based on the regulatory framework operational in their countries. Some of these attributes have been neglected because Nigerian regulatory authorities do not have that rigour to sustain such regulatory responsibilities.
“There was governance in the country at that time. The DPR in those days had an office in Port Harcourt, Rivers State. The former DPR Directors including Mr. Jubril Oyekan , Peter Achebe to Billy Agha, used to make pronouncement without undue interference from the Ministry of Petroleum and the Presidency. At that point in time, there was no need for small thieves (those stealing only 5 barrels),” Olorunshola said.
The former Director of DPR noted that the recently approved PIA had only put in check the activities of small thieves within the host communities.
According to him the PIA, unfortunately, does not put in place measures to checkmate the activities of institutionalised oil thieves. He noted that these big criminals are the major perpetrators of economic crime against Nigeria.
He said, “The present system in Nigeria offers great incentives to organised criminals stealing our crude oil. The Nigerian government is tolerant of these economic saboteurs. The fear no longer exists, because the situation has changed, we now celebrate criminals and offer big contracts to oil thieves.
Olorunshola while proffering solutions to the crises, said, “The big thieves, certainly, need a firing squad. The organised criminality in the Niger Delta region is an existential threat that shouldn’t be tolerated for a seconds within our space.”