Root Causes of Oil Theft: Reps C’ttee Begins Probe

–        Says Nigeria lost $10bn to oil theft in 7 months 

–         Lawyers seek Farouk, others suspension as committee starts investigation

Juliet Akoje in and Alex Enumah in Abuja 

The House of Representatives Special Committee on Oil Theft and Losses has begun investigation into illegal lifting of crude oil in Nigeria in order to address the root causes of challenges facing the sector.

The committee revealed: “The statistics on crude oil theft are very alarming and its negative impact on the economy is quite monumental. For instance, it is estimated that between January and July 2024, Nigeria lost an average of 437,000 barrels of crude oil per day due to theft, vandalism and other criminal activities.

“At the current price of oil, this translates to over $10bn over the same period. “

Even as the Reps Committee digs in, no fewer than 20 constitutional lawyers, Thursday, urged the House of Representatives’ Joint Committee on Petroleum (Downstream and Midstream), to recommend to President Bola Tinubu, the suspension of the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, over alleged corruption, incompetence amongst others.

The suspension according to the lawyers would prevent interference with the job of the committee which is conducting a forensic investigation into the state of the NNPCL and the downstream sector.

The House Committee was mandated to investigate oil theft and the actions of criminal gangs, militia groups, local communities, companies and security agencies.

The chairman of the special committee, Hon. Alhassan Ado-Doguwa, during his remark at the committee meeting on Thursday, promised on behalf of the committee to do a good job in the interest of Nigerians. 

Ado-Doguwa said: “Our ultimate aim is to employ every legislative tool to unearth the root causes and immediate factors contributing to this crime, bring those complicit to justice and develop sustainable solutions that will safeguard the integrity of our oil sector and promote national development.

“To ensure a thorough investigation, our methodology includes inviting memoranda and presentations from key stakeholders within the oil industry and security sector and engaging in further discussions with international and local oil companies, host community leaders, and relevant agencies.”

Speaking on the challenges to be addressed, he said: “Our committee has noted several critical issues, including vessels transporting stolen crude oil undetected, collaboration among government and security agencies in illicit activities and the inefficiencies of current measures to combat oil theft.

“We have identified that firepower and other weapons of engagement are inadequate compared to the number of security operatives drafted to combat armed crude oil thieves.

“The NNPC Ltd. has reported 900 infractions on its pipelines and delayed judicial processes have resulted in the abandonment of cases, allowing culprits to return to their criminal activities.

“In light of these findings, our committee has resolved to enact adequate legislation, including budget allocations to support security agencies, improve existing laws to combat crude oil theft and collaborate with security agencies to prioritise the protection of national assets and critical infrastructure.

“We also emphasise the importance of involving indigenous youths in ownership initiatives and converting seized refineries for legitimate use rather than destroying them.”

The immediate past Deputy Speaker of the House, Hon. Idris Wase, urged Ado-Doguwa to brace up for what will come his way, noting that the oil thieves will come after him and reminded the Kano lawmaker that his job is a dangerous one.

His words: “Mr. Chairman, you are involved in doing a very dangerous business. It is more than dangerous. Don’t take it lightly. It is not going to be easy for you and the committee members because you are going to face people who are sabotaging Nigeria’s economy.

“In other climes, these people are supposed to be on the gallows and face the death penalty. They will go after you; they will come after your life but God will shield you. He will protect you.”

Earlier, Speaker of the House, Hon. Tajudeen Abbas, represented by the Deputy Speaker, Hon. Benjamin Kalu, lamented the negative impact oil theft is having on the nation’s economy as he decried the daily losses of crude due to the activities of criminals. 

According to him: “Apart from reduced government revenue to address the multi-faceted challenges of national development, other problems associated with crude oil theft include environmental degradation, heightened insecurity in the form of piracy, kidnapping, militancy and vandalism and the shut-down of production by many companies, among others.

“The reduction in government revenue has invariably been responsible for government borrowing to address budget deficits over the years.”

He identified corruption as one of the factors working against sustainable development in the oil sector and pledged the readiness of the parliament to assist anti-graft agencies to rid the sector of various economic crimes. 

“We are determined to strengthen the Economic and Financial Crimes Commission, the Nigeria Extractive Industries Transparency Initiative and other anti-corruption agencies to frontally combat corruption in the oil and gas sector,” he said.

The Secretary to the Government of the Federation, George Akume, also reiterated the commitment of the federal government to secure the nation’s oil and gas infrastructure, noting that in the past four years, over $1.5bn has been spent in this regard.

Akume, represented by the Permanent Secretary, General Services, Office of the SGF, Maurice Nnamdi, said: “The government has invested considerable resources in combating this menace.

“Since 2020, expenditure aimed at addressing crude oil theft and securing our oil infrastructure has exceeded $1.5bn. These funds have been allocated towards enhancing surveillance capabilities, securing pipelines, and increasing the presence of law enforcement agencies in critical oil-producing areas.”

Meanwhile, besides Kyari and others the twenty constitutional lawyers want those to be suspended to include: the Managing Director of NNPCL Trading Company, Lawal Sade, and the Chief Upstream Investment Officer of NNPCL Upstream Investment Management Services (NUIMS), Bala Wunti.  

The lawmakers had few days ago also called for the suspension of the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, over his comment on Dangote Refinery.

According to them, their suspension will give room for uninterrupted investigation because the officials would no longer have access to sensitive information and documents to derail the crucial exercise, aimed at addressing the stunning allegations of sharp practices being perpetrated right under their nose.

Speaking with journalists in Abuja, the legal practitioners led by constitutional activist, Comrade Tijani Usman, accused Kyari and others in the NNPCL management of sabotaging the efforts of President Tinubu to salvage the nation’s economy.

The lawyers equally urged the Hon. Ikenga Imo Ugochinyere (Downstream) and Hon. Henry Okojie (Midstream)-led probe panel not to sweep the OVH Acquisition and other sleeze under carpet as they are the larger issues the Joint Committee should look into beyond those raised in the motion that prompted the forensic investigation.

According to them: “It is quite fascinating that the House of Representatives has resolved to carry out a forensic investigation into the presence of middlemen in trading, the indiscriminate issuance of licenses, the unavailability of laboratories to check adulterated products, the influx of adulterated products into the country, the allegation of non-domestication of profits realised from crude marketing sales in local banks, and other anomalies.

“Interestingly too, the forensic investigation also covers the importation of substandard products and high-sulphur diesel into Nigeria, the sale of petroleum products below fair market value, and the impact on downstream and local refineries and as the source of funds for such interventions, amongst other things, and report back to the House within four weeks for further legislative action.

“However, this would be efforts in futility if the Group Chief Executive Officer (GEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari and his cohorts, especially Lawal Sade, the Managing Director of NNPC Trading Company and Bala Wunti, the Chief Upstream Investment Officer of NNPC Upstream Investment Management Services (NUIMS) are allowed to remain in office why the investigation is being conducted.

“Thus, we urge the House of Representatives’ Joint Committee on Petroleum (Downstream and Midstream) conducting forensic investigation into the state of the Nigerian National Petroleum Company Limited (NNPCL) and downstream sector generally to recommend their suspension to President Bola Ahmed Tinubu or else they will use their tremendous influence to sabotage this timely intervention.

“When that is done, President Tinubu who should by now have realised that the Kyari-led NNPCL was sabotaging his efforts to fix the economy due to their crass incompetence and mischief should suspend the management of the company to give the lawmakers unfettered access to do their job.

“Beyond those rots spelt out in the motion which necessitated the probe, the Hon. Ikenga Imo Ugochinyere (Downstream) and Hon. Henry Okojie (Midstream)-led probe panel should make sure the OVH Acquisition and other sleeze are not swept under the carpet.

“Nigerians are well aware how after N140 billion purchase, NNPCL was unable to complete the acquisition of OVH Energy Marketing Limited’s downstream assets. So, the panel will be daring the people who are already fed up with the kleptomania in the company.”