As FG Tightens Noose on Crude Oil Saboteurs

Last week, the military renewed its crackdown on oil thieves and vandals, in a coordinated effort to halt the leakages in the oil industry and boost Nigeria’s revenue base. However, analysts will expect them to look beyond the South-south region in their attempt to smoke out the beneficiaries of this illegal operation and return Nigeria to the path of prosperity, writes Festus Akanbi

For a nation in the throes of economic turmoil, one understands why the renewed crackdown on perpetrators of oil theft and illegal oil bunkering by the federal government has continued to occupy a pre-eminent position in the media.

First was the fresh marching order to the nation’s security agencies to dislodge perpetrators of oil theft, especially in the Niger Delta in a bid to improve oil production and revitalise the country’s ailing economy.

Accordingly, the Chief of Defence Staff (CDS), General Christopher Musa, said the president had given the military a mandate to ensure that they secured the entire South-south, to enable NNPCL and others to carry out their tasks to improve oil production.

Musa assured Nigerians they would see the result of the reinvigorated war against oil theft within three months.

And responding to the call for effective monitoring of the country’s crude oil production, the federal government on July 12, approved the sum of $21 million for the metering of 187 oil flow stations across the Niger Delta region to help monitor the country’s crude oil production and distribution.

A report of the special investigative panel on oil theft and losses in Nigeria constituted by the immediate past administration had attributed oil losses to the absence of a robust industry-wide metering system and an unworkable security arrangement in the sector.

However, the Minister of State for Petroleum Resources (oil) Heineken Lokpobiri, who hinted at the ongoing effort to procure the metering tool explained that the metering project is in line with the government agenda to curb the issues of oil theft bedevilling the country’s oil and gas sector.

Products’ Diversion

Apart from the outright theft of crude, operators said the issue of diversion of petroleum products is another major problem that needs urgent attention. For instance, the Akwa Ibom State Coordinator of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ike Eseka, recently sought the support of the Nigerian Army to address the rampant issues of petroleum products diversion, price gouging, and sale of adulterated fuels in Akwa Ibom State. 

Industry operators said the problem of diversion is not limited to Akwa Ibom as several hundreds of petroleum tankers make their way through the porous borders daily.

But determined to stamp out oil theft and pipeline vandalism, the Chief of Army Staff vowed that going forward, the entire South-south would be cleared of all acts of vandalism and criminality within the general area.

He added, “We know that Nigeria relies so much on crude oil production, so we want to use this medium to appeal to the communities, to have an understanding. Yes, we know trust has been a problem, but they can trust us, they can trust the government, that we want to do things differently. Everyone will be carried along.”

The CDS said the ongoing war was not only for the security agencies, stating that everyone has a role to play in the renewed anti-oil theft operation.

He said, “We need the communities to understand that pipeline vandalism and all the hazards being caused is also affecting them directly and we need to stop that.”

Beyond Nigeria Delta

Industry affairs commentators, however, cautioned that the war against oil saboteurs should not be limited to the creeks, given the indictment of some unnamed security and public office holders in the criminal activity.

Recently, Senator Seriake Dickson representing Bayelsa West in the National Assembly alleged that bigwigs from Lagos and Abuja are masterminds of the oil theft on Niger Delta soil.

Dickson, a two-term governor of Bayelsa State in the South-south zone, said the official system and oil companies are beneficiaries of oil theft in the Niger Delta and lamented the absence of national values which makes people use the nation’s resources for personal aggrandisement.

Dickson said, “Why should a country like Nigeria that has been producing and exporting oil for the past 70 years not have a scientific way of metering, recording what leaves, what is pumped, what is sold, and what is not sold? And it’s deliberate.

“It’s not a Niger Delta thing; it’s just happening there and, unfortunately, it has destroyed communities because there is too much illegal money, illegal arms, illicit drugs and it has fueled cultism because people want to get the loyalties of young people to be able to hold territories where oil facilities are. They need weapons and young men that are always high on drugs. Do you think a man who slaughters and cuts off a man’s head and dismember him is normal? So, those are people who are actively on drugs.”

In Search of Economic Viability

The Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, who was part of last week’s security meeting admitted that oil theft and pipeline vandalism have become a national issue and that the president has directed the CDS to curtail this within the shortest time possible, “so that we can restore national production to the level the president and the country is expecting.”

“Without restoring oil and gas production, we cannot have the economic stability that we desire. The president is focused on this to deliver value to our country. It is impossible to do this without curtailing the crisis around our operational areas.”

The GCEO added: “We are already seeing progress; we are seeing substantial value that is being created by the coordination, but we are very convinced that a solution is in sight.”

The theft and vandalism of oil assets have made the issue of budget deficit for a nation that relies heavily on oil revenue, a recurring decimal. It also makes it difficult to meet the OPEC quota which stood at 1.5mbpd in 2024 and the federal budget benchmark of 1.78mbpd (including condensates). According to the Nigerian Upstream Petroleum Regulatory Commission, the total volumes of crude oil and condensates produced in January, February, and March were 1.643mbpd, 1.539mbpd, and 1.438mbpd respectively. 

The limited production has disrupted budgetary expectations. Crude oil and gas constitute 70% of Nigeria’s budget revenues and 95% of its foreign exchange earnings.  Analysts therefore said that President Bola Tinubu needs to take crucial steps to stop industrial-scale theft.

Harvest of Losses

The National Security Adviser, Nuhu Ribadu was quoted as saying that in 2023, the country lost 400,000bpd to theft. A former Minister of State for Petroleum Resources, Timipre Sylva, said Nigeria lost at least 700,000bpd to thieves in 2022. This is far higher than in other OPEC countries plagued by oil theft like Venezuela, Iraq, Mexico, and Malaysia. 

The NNPC stated in September 2022 that it lost $700 million every month to oil theft. The Nigerian Extractive Industries Transparency Initiative added that Nigeria lost 619.7 million barrels, valued at N16.3 trillion, to crude oil theft from 2005 to 2021. In 2023, the NNPC spent N136 billion on security, repairs, and maintenance of vandalised infrastructure, per Dataphyte. 

Analysts who doubted the capability of the current security architecture to stem the tide of sabotage in the oil industry said what looked like a lack of confidence in the military by some public officials is bound to affect the public perception of the current assignment.

For instance, the Minister of the Federal Capital Territory, Nyesom Wike accused the military of being in cahoots with oil thieves, saying the killing of 17 soldiers in Okuoma, Delta State, last March, reflects the angst between the military and the Niger Delta communities. 

The reality is the military in the past had failed to win the fight against oil theft. This calls for sober reflection and a paradigm shift. 

With Nigeria deploying 98 per cent of its revenues to service debt, Tinubu must insist that the military retrieve stolen crude, deploy it as evidence in court, and make it available to the Nigerian National Petroleum Company Limited in an accountable and transparent manner.