As FG Intensifies War against Oil Theft

It is hoped that the tour of oil and gas facilities by a special presidential delegation put together to find a lasting solution to the problem of oil theft and low production will bring the desired results and improve the much-needed revenue that will boost the country’s economy, writes Festus Akanbi

For most of last week, media attention was focused on the ongoing tour of the nation’s oil and gas facilities in the oil-rich areas by a special presidential team led by the National Security Adviser (NSA), Nuhu Ribadu, amid a cocktail of measures being put in place to plug the loopholes in the nation’s revenue sources.

Analysts described the latest onslaught against oil thieves as a low-hanging fruit in the face of the current revenue crisis, inflation, and a regime of paucity of foreign investment in the country.

On the delegation with the NSA were the Chief of Defence Staff (CDS), General Christopher Musa; and the Chief of Army Staff (COAS), Lt Gen Taoreed Lagbaja. 

Others include Minister of Defence, Muhammed Badaru; Minister of State for Defence, Bello Matawalle; Minister of State (Oil), Petroleum Resources, Heineken Lokpobiri; and Minister of State (Gas), Petroleum Resources, Ekperipe Ekpo. 

Also, senior management team members of the Nigerian National Petroleum Company (NNPC) Limited including the Group CEO, Mr. Mele Kyari and other top security personnel made the delegation.

Currently, the government is battling to check the activities of economic saboteurs running clandestine refineries and illegal bunkering operations.

Mind-boggling Revelations

Energy sector watchers said the mind-boggling revelation of unrelenting oil theft and the sheer estimation of the corresponding revenue losses have vindicated President Bola Tinubu’s position on the urgent need to plug the loopholes in the nation’s oil revenue.

According to Ribadu, Nigeria currently loses 400,000 barrels of crude oil daily to criminals and economic saboteurs. At the current crude oil price of $87.99 per dollar, the losses translate to $35,196,000 (N27,260,709,840) at the official rate of N774.54 per dollar daily. This means Nigeria loses almost N10 trillion to oil thieves every year.

Ribadu made the shocking revelations after the inspection of the oil and gas facilities at Owaza in Abia and Odogwa in Etche Local Government Area of Rivers penultimate week.

He maintained: “Nigeria can produce two million barrels of crude daily, but we are currently producing less than 1.6 million barrels due to theft and vandalism of pipelines. “So, we are talking about 400,000 barrels of crude oil going to waste.

The NSA said the team is committed to ending the menace at whatever cost in the interest of the government and the people.

“We have the marching order by Mr. President to stop crude oil theft and all other vandalism around our installations and that we promised to do.”

The delegation also visited oil and gas facilities in Koko, Warri North Local Government Area of Delta State.

Speaking on the visit, the Minister of State for Petroleum Resources (Oil), Lokpobiri, said the federal government was committed to putting a stop to pipeline vandalism in the Niger Delta.

“We are here because of the problem of pipeline vandalism and illegal bunkering that is going on in the Niger Delta. I believe that it has become an existential problem and we need to fight it. We need to fight these criminals to submission.

Lower Output

The result of these acts of sabotage became manifest in the oil production data for the second quarter of the year which recorded an average daily oil production of 1.22 million barrels per day (mbpd).

This, according to the Nigerian Bureau of Statistics (NBS), was much lower than the daily average production of 1.43mbpd recorded in the same quarter of 2022 by 0.22mbpd and lower than the first quarter of 2023 production volume of 1.51 mbpd by 0.29mbpd.

The real growth of the oil sector was 13.43 per cent (year-on-year) in Q2 2023, indicating a decrease of 1.66 per cent points relative to the rate recorded in the corresponding quarter of 2022 (-11.77 per cent). Growth also decreased by 9.22 per cent points when compared to Q1 2023 which was -4.21 per cent.

To curb oil theft, the Nigerian National Petroleum Company (NNPC) Limited has partnered with private security firms. It said 20 illegal pipeline connections were discovered, and 45 illegal refineries were destroyed in the Niger Delta recently. 

Treating Vandals with Kids Glove

Oil industry watchers believe much still needs to be done by the federal government to halt the rising cases of vandalisation and outright theft in the industry. They contended that the current security arrangement with Tantita Security Services Nigeria Limited, a security firm said to belong to a former militant leader, Government Ekpemepulo aka Tompolo is not enough to eliminate the problem of oil theft in the country.

According to an energy expert, Prof. Wumi Iledare, Nigeria has tolerated a lot of criminality in the energy sector in a way that encouraged criminality to fester for a long time. He dismissed calls for the government to approve the operation of illegal refineries, arguing that such would be an exercise in futility. 

Iledare said it may be profitable to run these illegal facilities now because they are not paying for crude oil that is stolen. 

“There is no basis to approve illegal refineries. They should pursue them and jail them. Illegal refineries are thriving because the culprits are not paying for their crimes,” he said.

Iledare added that communities should also take up the challenge of policing such oil facilities and that the constitution should be reviewed in such a way as to give states control of the assets. 

He stated: “States should be allowed to take care of their oil resources because they know their people,” he suggested.

This position was also shared by a Senior Advocate of Nigeria, Kayode Adeluola, who explained that there are sufficient laws to punish criminals in the oil sector, saying the government should jail anyone found stealing the nation’s resources. 

“There are laws but there should be enough desire to achieve the aim of justice. If there is culpability, it means there should be a way out.”

 He dismissed the call for the set-up of another security agency to monitor the maritime sector, and argued that the existing security apparatus can do the job if properly managed.

Oil Pipeline Surveillance

The ongoing tour also stokes controversy over the N48 billion crude oil pipeline surveillance contract awarded to Tantita Security Services with the Rivers State governor Siminalayi Fubara saying it was wrong to award such a contract to ‘one man’.

He said the decision would not achieve the objective it was meant to serve because, in his view, an individual should not have control over the assets in another’s territory. His view was corroborated by the Ikwerre Peoples Congress (IPC) which said there was no reason for the government to exclude critical stakeholders like the Ikwerre people whose land hosts a large percentage of the pipelines.

But some other Niger Delta leaders and stakeholders under the aegis of Niger Delta Indigenous Movement for Radical Change (NDIMRC) took an opposing view. The Tompolo contract, they said, should be renewed as it has helped in checking oil theft in the region. Fubara, who mentioned no name, told the high-powered federal government delegation that “Security of pipeline should not be given to one man or one person. How can someone from Kalabari be controlling the pipeline in Ogoni? There is no way it will work.

It is hoped that the ongoing assessment of the oil and gas facilities will be followed to a logical conclusion and all the indicted individuals behind oil thefts will be made to face the law as anything short of this will amount to playing to the gallery as usual.