NNPC’s Renewed Fight Against Oil Theft

Emmanuel Addeh writes that the results of recent renewed effort by the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, and activities to redirect the national oil company, appear to be attracting positive feedback from industry operators

Although oil theft and pipeline vandalism are not new phenomena in Nigeria, the twin menace has recently assumed a new dimension, depriving Nigeria of taking advantage of current favourable international oil prices.

In all of the turbulence, mostly in the eye of the storm was the national oil company, the NNPC, led by Mallam Mele Kyari. In August last year, to underscore the severity of the problem, Kyari disclosed that Nigeria was losing $1.9 billion monthly to crude oil theft.

Kyari who spoke when a delegation on an anti-oil theft team led by the then Minister of State, Petroleum Resources, Timipre Sylva, visited the Governor of Delta State, Ifeanyi Okowa, said that Nigeria was hardly meeting its production quota due to the activities of the pipeline vandals and oil thieves.

“As a country, we hardly meet our OPEC production…which is currently being threatened by the activities of these economic saboteurs.

“This has done extensive damage to the environment, and losing $1.9 billion every month is colossal, considering the nature of the global economy at the moment,” Kyari said.

Kyari emphasised that the team needed the support and buy-in of the states because stopping oil theft required the concerted efforts of the federal and state governments as well as oil companies and security agencies.

Aside several visits to the creeks and collaboration with local groups and security agencies to stop the menace, Kyari’s  team also visited several other leaders, including Hope Uzodinma, governor of Imo, among others to seek their buy-in into the right against oil theft.

The problem was so pronounced at the time that Businessman and Chairman Heirs Holdings, Mr Tony Elumelu, bemoaned the fact that Nigeria was losing over 95 per cent of its oil production to thieves.

 “How can we be losing over 95 per cent of oil production to thieves? Look at the Bonny Terminal that should be receiving over 200,000bpd barrels of crude oil daily, instead it receives less than 3,000 barrels, leading the operator , Shell to declare force majeure.

“Why are we paying taxes if our security agencies can’t stop this? It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!,” he lamented at the time.

Elumelu wasn’t the only person who made public comments about the menacing problem at the time. Mostly reticent respected cleric, Pastor Enoch Adeboye also lent his voice to condemning the growing theft of Nigeria’s commonwealth.

“Who is stealing the oil? Where is the money going? What do they want to do with the money? Who are the foreign nations buying this stolen oil? How many of these nations of the world are your friends?” he asked, noting that if the issue of oil theft was not resolved, Nigeria could go bankrupt.

SEIZING THE GAUNTLET

Aware that the problem was getting out of hand, the leadership of the NNPC decided to seize the gauntlet, going beyond its call of duty to collaborating with federal security forces, local security groups, communities and government heads in the states to curb the rising trend.

Aside that, it floated a whistle-blowers policy which would see people who discreetly report oil theft in their communities handsomely rewarded. There’s also now some form of online real-time monitoring of activities on some of the nation’s oil assets.

In addition, it began consultations with international regulators to ensure that aside detecting stolen Nigerian crude oil, buyers of illegally sold oil are punished.

RESULTS

It wasn’t long before the results started to roll in. Nigeria boosted its oil production from sub 1 million barrels per day to over 1.4 million barrels per day. The figure was growing until April this year when extraneous factors, including the workers’ strike by Exxon Mobil employees negatively impacted production and causing a setback.

TURNAROUND & PLAUDITS

Industry operators and business owners who were hitherto frustrated by the seemingly unstoppable crude oil theft are now beginning to acknowledge how much things have changed since Kyari began coordinating the effort to rid the country of assets vandalism or at the least reduce it and revamping the firm.

The Chairman of Heirs Holding, Elumelu, who last year raised the alarm on how oil theft and vandalism were disrupting his business has taken notice of the efforts by Kyari.

According to Elumelu, due to the efforts of NNPC Ltd, Heirs Oil & Gas has now witnessed 96 per cent recovery rate.

 “When I listened to the Group CEO speak today, talking about us moving to 2.5 million barrels, we challenged him to do more. I believe that it is achievable. From losing 97 per cent of our 50,000 barrels production, interestingly and it will be bad of me to have this platform and not share this here.

“That day, I got a call from the GCEO and I thought he was going to kill me for speaking up, to my greatest surprise, he said to me Tony, we are sorry about what is happening, we are doing something about it, it will be corrected.

“They worked as a team and the Board of the NNPC, the federal government, the security agencies, and last month, our recovery factor was 96 per cent. So GCEO NNPC, you have delivered.

“I speak from experience, a beneficiary and one who cried out before and today standing up today to say we have improved our production and that is what we need to encourage more investments in the industry.

“Today, we lift 501,000 barrels of oil (per month) bringing our total lifting this year alone to 2.6m barrels of oil. I am a great beneficiary of the new NNPC,” Elumelu stressed.

DANGOTE TOO

Africa’s richest man and the Chairman of Dangote Group, Aliko Dangote , has also been speaking on the changing fortunes at the NNPC. Noting that the NNPC has what it takes to become the African version of Saudi Arabia’s Aramco, Dangote pointed out that he believes that the oil giant can generate billions of dollars in revenue if the right decisions are made.

Dangote and other speakers made the remarks on  at the 2023 Upstream Investment Management Services Ltd (NUIMS) Annual Value Assurance Review (AVAR) workshop in Lagos.

“I truly believe that NNPC should be our African Aramco. You have what it takes to take you up there and I am very happy. There is nothing that is impossible. You can make it possible and don’t let anything scare you,” he added.

“We need to look at our infrastructure and see how we can take ourselves to the next level and it has to be driven by NNPC because they are the largest conglomerate and whatever happens to NNPCL their assets, it actually happens to us either directly or indirectly…Without you doing well, the country cannot do well,” he noted.

TOTALENERGIES TESTIFIES

Also, the Deputy Managing Director, Deepwater Asset, TotalEnergies Upstream Nigeria Limited (TUPNI), Mr. Victor Bandele, has expressed appreciation to Kyari, over what he described as his patriotic intervention that unlocked 30,000 barrels per day of new oil from the Egina and Akpo fields expected before the end of the year 2023.

Specifically, he thanked Bandele, for enabling the deepwater PSC to engage the services of Gerry De Souza Drillship to commence the long-due drilling campaign of seven development wells and one exploratory well to arrest production decline on the asset and unlock up to 30,000 barrels.

Bandele, said this as a guest at the NNPC said arresting production decline has helped in generating more value for stakeholders, improve the capacity utilisation of the best-in-class Egina Floating, Production, Storage and Offloading (FPSO) Vessel and ensuring the attainment of the desired benefits from the attractive crude oil prices in the market.

Bandele lauded NUIMS for always being a step ahead while pledging the commitment of the OML 130 partners to complete the ongoing drilling campaign, close out the lease renewal discussions, and turn the focus to aggressively executing the Preowei and Egina West projects.

The deputy managing director also announced to the gathering that his organisation has secured the alignment of all the partners on OML 130 to progress with the lease renewal with a target to close out before the end of May 2023.

The lease renewal would pave the way to firm up discussions on the Preowei and Egina West projects lined up by TUPNI and the OML 130 partners to introduce additional volumes to the Egina FPSO, he said.

According to him, the company is also on course to hitting the milestone of 1 billion barrels of crude oil production on the Akpo field within a period of 15.5 years.

He attributed this success to excellent reservoir management and the instrumental role played by NUIMS and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in providing the necessary support.