Presidential Panel: Poor Metering System, Improper Reporting of Crude Production, Diversion from Pipelines, Aiding Oil Theft

Kingsley Nwezeh in Abuja

The Maj Gen Barry Ndiomu-led Special Investigative Panel on Oil Theft/Losses in Nigeria has submitted its report to the National Security Adviser (NSA), Maj Gen Babagana Monguno (rtd).

A statement signed by Head, Strategic Communication, Office of the National Security Adviser (ONSA), Mr Zakari Usman, said the panel found that crude oil losses arose from a lack of proper reporting of crude oil production, illegal refining, theft from wellheads and diversion from sophisticated pipelines network. 

The panel also attributed losses to the absence of a robust industry-wide metering system and an unworkable security arrangement.  

It said “the confusing roles of regulatory agencies was also cited as being responsible for making the detection of theft/losses difficult”.

Submitting the report, the chairman of the investigative panel, Maj Gen Barry Ndiomu (rtd), called for quick implementation of the report and said  should government implement the recommendations in the report, oil theft/losses would be adequately addressed. 

He also said prompt implementation of the report would not only create an immediate impact on crude oil production levels to meet OPEC’s quota but would also attract foreign direct investment and serve Nigeria’s economic and national security concerns. 

Ndiomu stated that the panel engaged key stakeholders both within and outside the oil and gas industry including state governments, ministries, departments and agencies.

The panel also engaged “security agencies, regulatory agencies, international and indigenous oil companies, traditional institutions, host communities, artisanal refiners among others”.  

The statement noted that in discharging the responsibility of the panel, it received and reviewed several memoranda and reports on oil theft and losses.

“During the assignment, the panel discovered several layers of involvement in the illegal theft of crude oil despite the best efforts of the Armed Forces and other security agencies to combat the activities of the oil thieves. 

“The panel also observed that crude oil losses arose from a lack of proper reporting of crude oil production; illegal refining; theft from wellheads; and diversion from sophisticated pipelines network.  The panel also attributed losses to the absence of a robust industry-wide metering system; and an unworkable security arrangement.

“The confusing roles of regulatory agencies was also cited as being responsible for making the detection of theft/losses difficult”, it said.

Receiving the report, Monguno thanked the panel for keeping to the timeframe and for addressing the issues of oil theft and losses comprehensively.  

He assured that government would study the report and see to its immediate implementation, especially the recommendations with short-term perspectives.

It would be recalled that the NSA inaugurated the investigative panel on December 6, 2022, and was given 10 weeks to complete the assignment with extensive terms of reference to investigate all aspects of crude oil theft/losses in all its ramifications. 

The panel commenced work the same day.