Mitigating Nigeria’s Oil Theft Quagmire

 IN THE ARENA

Emmanuel Addeh, in this piece, chronicles the seemingly deep-seated challenge that the growing crude oil theft poses to Nigeria’s economy as well as national security,  touching on the renewed efforts being currently mounted by the authorities to resolve the intractable problem

Crude oil theft is not new in Nigeria. Indeed, the first report of stealing of the commodity dates back to the 80s when the military was still firmly in charge of administering the country. Since then, discussions surrounding the phenomenon have gained national prominence.

However, what is  different now is the sheer volume of crude oil lost to non-state actors and the manner the situation has disrupted the nation’s economy.

To be sure, as far as a decade ago, oil theft was already an issue in the country’s hydrocarbons sector. In fact, precisely in 2012, a former Managing Director of the multinational oil giant, Shell, Mr. Mutiu Sunmonu, had after a tour of bunkering described the development as “extremely saddening and worrisome.”

If anything was done like Sunmonu suggested, what has become abundantly clear, is that it was too little and too half-hearted to have any meaningful impact.

Although several layers of security arrangements and special units have been set up by the federal government under various names, the problem has, as it were, gone from bad to worse. This is so much so that it is not only pinching the industry players, dwarfing government revenues, but has indeed despoiled the environment.

In its wake, crude oil theft in Nigeria, rumoured to be carried out with the connivance of security personnel, community actors and even with the endorsement of top government officials, is not only threatening the Nigerian economy, but has imperilled the operations of the companies in the sector.

Finally, it is hitting home as the International Oil Companies (IOCs) begin divestment of their assets and indigenous Nigerian businessmen take over the running of the facilities.

As it is, whereas over 30 years ago, Nigeria could produce over two million barrels of oil per day seamlessly, today it struggles to drill as little as 1.4 million, even though the quota handed down by the Organisation of Petroleum Exporting Countries (OPEC) is almost climbing 1.8 million bpd.

While oil producing nations are boosting their foreign reserves and National Oil Companies (NOCs) are declaring massive profits and bonuses, Nigeria, ironically, is worried about the rising price of oil which has now settled above the $100 per barrel mark.

Prospective investors in the sector are literally on the run. Those caught in the space already are lamenting their unfortunate situations as they count their losses.

The cacophony of voices bewailing the complete deterioration of the country’s oil and gas industry has increased in the last few weeks. Ordinarily reticent and conservative players in the industry have spoken up vehemently about the weight of losses they carry.

From the angry to the helpless, some of the players have expressed their despondency at the intractable crisis in the Nigerian oil and gas industry.

Last week, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, who spoke at the end of the 284th monetary policy committee (MPC) meeting in Abuja, blamed the trend of oil theft for the inability of Nigeria to meet its oil production quota.

Describing the situation as unprecedented, he stated that the occurrence has had a debilitating effect on government revenue and accretion to reserves, adding that the global prices have gone up and are compounded by the shortage of supply of petroleum products.

Chairman, IPPG, Mr. Abdulrasaq Isa, speaking a fortnight ago at the 5th Nigeria International Energy Summit (NIES), like Sunmonu said that the challenge should be tackled before it finally kills the sector.

 Less than two weeks ago, Aiteo Eastern Exploration and Production Company (AEEPCO), operators of the Nembe Creek Trunk Line (NCTL) pipeline, threatened to exit the facility due to incessant vandalism, sabotage and outright theft.

Last Monday, THISDAY reported a Co-founder and former Chief Executive Officer of Seplat Energy Plc, Mr Austin Avuru as calling for a state of emergency in the Nigerian oil and gas sector, revealing that up to 80 per cent of oil pumped in the country, particularly in the East, is stolen.

Incidentally, Avuru’s comments came days after a businessman and Chairman Heirs Holdings, Mr Tony Elumelu, similarly bemoaned the worsening state of the industry, stressing that about 95 per cent of oil production does not get to the terminal. Elumelu has his oil assets in the Niger Delta.

Dissatisfied with the rising complaints, during the week, President Muhammadu Buhari deployed the Group Managing Director of the Nigerian National Petroleum Company (NNPC), Mallam Mele Kyari, in the Niger Delta to assess and put a final stop to the problem.

Speaking during the on-the-spot assessment, Kyari stated that the government had concluded plans to move against oil bunkering, pipeline vandalism and illegal activities threatening the country’s oil sector.

He noted that the government would leave no stone unturned to arrest the increasing spate of oil theft and destruction of the environment which had cost the country foreign exchange earnings.

The NNPC GMD stressed that no stakeholders will be left out in the quest to find a lasting solution, adding that the Navy were also on top of the situation. He assured that the task of destroying illegal oil refineries will not stop until the problem is resolved.

Subsequently, along with the team, Kyari visited the 146 Battalion, Finima, Bonny Island, where he tasked the special outfit to ensure that there is zero tolerance for illegal activities across the oil and gas sector.

Also shut down were the Gogokiri site, said to be the biggest bunkering area in Bayelsa, in addition to the destruction of a storage facility at Igbalele in the state as well as the  demolition of the Okarki site where oil thieves laid pipeline and tapped oil from a community in Abua community, near Rivers.

In Ahoada, Rivers, the GMD stated that the bid to put an end to the activities of the saboteurs will be relentless until the country got rid of them, pointing out that the strategy being adopted will finally arrest the situation.

Also on the team deployed by the president were the Minister of State for Petroleum Resources, Chief Timipre Sylva; Chief of Defence Staff, General Lucky Irabor and the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe.

If anything, the recent renewed vigour by the federal government, gives some hope that perhaps, very soon the theft of Nigeria’s commonwealth will be a thing of the past and that the country can truly enjoy its God-given resources.