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THE Nigerian National Petroleum Corporation (NNPC) seems to be shifting from its hitherto conservative posture to suspiciously becoming a beacon of transparency, with its curiously damning public disclosure on crude oil theft in the country. The corporation, through Ms. Tumini Green, its acting group general manager, public affairs division, said Nigeria in the first quarter of this year lost N191billion ($1.23billion) to crude oil theft and vandalism.
This figure could be an understatement when juxtaposed with figures from other credible sources. Just last year, the International Energy Agency published a report indicating that Nigeria loses about $7billion annually to oil theft. Also, recently, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) through Babatunde Ogun, its president, disclosed that the country loses $6billion annually to crude oil theft, and that Nigeria has also lost N105billion to theft of refined products.
The theft of crude and even refined products has become intractable because of systemic conspiracy and corruption. Indeed, its negative impact is daily being felt. For example, Shell has shut down the Nembe Creek Trunk line due to stealing of an estimated 60,000 barrels of its produced crude per day. Even the NNPC reveals that there are 53 discovered break points along the 97-kilometre Nembe Creek Trunk line, yet, nobody has so far been held responsible for this criminal act.
Agip has also suspended production in Bayelsa State because 60 per cent of its crude oil production of about 90 barrels is stolen daily. The NNPC/Shell Petroleum Development Company Joint Venture has also reportedly declared a force majeure on Bonny Crude due to incessant crude oil theft, and resulting in the loss of 150,000bpd of crude oil being produced through the venture.
The recent damage to pipelines and stealing of refined petroleum products in Arepo, Ogun State, is just one example of so many like that across the country. This kind of vandalism, especially of major oil pipelines within the Niger Delta, is largely responsible for the drop in the nation’s oil production. Regrettably, the situation looks irredeemable due largely to systemic corruption. In practical terms, this nefarious act has led to a reported fluctuation of daily crude oil production in the first quarter to between 2.1 million and 2.3 million barrels per day – a sharp drop from the projected estimate of 2.48mbpd. Expectedly, the government has reportedly lost $1.23billion (N191billion) that ought to have accrued to the Federation Account.
It is sad that despite the existence of a law that provides life imprisonment for anyone engaging in stealing of crude oil/refined petroleum products and damaging of pipelines, no person has been apprehended or prosecuted. The NNPC cannot exculpate itself from the rotten state of affairs in the oil industry. Does the corporation expect us to clap for it for reeling out doubtful figures of oil theft when nothing concrete has so far been done to stem the injurious tide?
We consider NNPC’s revelations as appalling. The corporation is established to work and not to complain. It easily tells the public how much was stolen. But it finds it difficult to tell Nigerians the actual amount of crude that Nigeria produces per day or even open its books for scrutiny. In this regard, NNPC had failed several legislative/public scrutiny tests in the past.
No doubt this degree of oil theft is unsustainable. One other thing we have to look at is the way oil wells are allocated in the country. There is so much impunity in the manner of allocation; this has to be addressed to make the process fair and equitable. Also, the present security system in the country is very weak and incapable of tackling the challenge of oil theft. All said, a paradigm shift is inevitable in the oil industry if these absurdities are to be checked.
Source: The nation
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