EDITORIAL: Curbing Oil Theft In Nigeria

In September, at a presentation during the third annual lecture of the Dauda Adegbenro Foundation at Ibadan, the Executive Secretary of NEITI, Mr. Waziri Adio, stated that Nigeria still does not know exactly how much oil it produces almost 60 years after crude oil production and export began in the country!

“We need to know exactly how many barrels of crude oil we produce, not just how many barrels that we export…”, he said, adding that NEITI’s recommendation of “multi-phased, calibrated meters at oil well-heads, flow stations and export terminals is… yet to be considered by the government”.

Usman Ndanusa, a Deputy Director in the Federal Ministry of Trade and Investment, admitted as much at a recent public hearing of one of the Joint Committee of Senate Committees when he stated that since 2015, the country had been exporting oil and non-oil products without measurement and documentation.

The point must be made that these red flags were raised not by opposition politicians but patriotic citizens who are senior members of this Administration.

We do not need a Senior Advocate of Nigeria as prosecutor to argue that the patent lack of transparency implied in Waziri’s and Ndanusa’s submissions suggests the existence of a less-than-honest scheme to shortchange Nigeria.

In addition to what might be going on behind the scenes (since we don’t use flow meters to measure oil production volumes, and officials export oil and non-oil products without measurement or documentation), other categories of Nigerian crude oil theft have been documented in media coverage of the oil industry: small-scale theft and illegal local refineries; large-scale illegal bunkering in the field; theft at export terminals; fuel trucks theft; and piracy and oil tanker hijacking.

The most common method of illegal oil bunkering is for oil stolen from licit pipelines that transport crude oil around the Delta, from wells to refineries, or from wells to official export terminals, where the crude is loaded by gangs on to oil tankers. It is believed that detailed technical advice (at a cost of about $5,000 per operation) is sought from oil workers in pipeline control rooms or former employees who can also provide critical information on security patrols and inspection schedules.

From several accounts, all of them consistent, politicians, security forces, government officials, oil workers, criminal entities, and local community leaders all seem to benefit from the oil theft. This activity is facilitated by a large-scale theft network which includes security personnel, local and foreign transport networks and a range of buyers and sellers, among other facilitators.

Hydrocarbon theft is still on the rise and beneficiaries from the crime continue to smile to the bank!

Reports emerging from the House of Representatives Ad hoc Committee probing an alleged theft and sale of Nigerian crude oil and gas simply suggest that crude oil and natural gas theft and sale in this country has reached stratospheric levels.

Preliminary reports suggest that between 2011 and 2014, an estimated 1,492,000,000 barrels of stolen crude oil priced at between $15 billion and $17 billion were exported in 51 countries – a small measure of the rot under the past PDP Administrations.Moderate estimates put the quantity of stolen at 150,000 barrels a day, a daily revenue loss of a whopping $7.5 million.

But the cost of illegal oil theft cannot only be counted in purely financial terms alone. Oil theft helps to sustain the culture of armed insecurity in the Niger Delta, exacerbates the existing pollution problems, encourages organised crime, and feeds and is fed by the culture of corruption.

The Nigerian Expression calls on Government to strengthen existing controls and institute new ones to minimise oil theft and ensure that Nigerians enjoy the full benefits of its exploration, production and export.

First, Government should, without delay, implement NEITI’s recommendation for the installation of flow meters to determine national crude oil production volumes.

Secondly, plans to start ‘fingerprinting’ of the country’s crude oil should be expedited post-haste. This will help to identify the sources of crude, identify apprehend criminals, and, gratuitously, facilitate the tracing of oil spills to their source. Also, immediate payoff is envisaged particularly in the labyrinthine creeks and waterways of the Niger Delta that has long been blighted by kidnappings and gangland violence.

Thirdly, improved intelligence. Nigeria and its prospective partners should prioritise the gathering, analysis and sharing of intelligence. Nigeria cannot stop the flow of stolen oil on its own. Partners must be engaged for they have an important role to play.

Finally, adequate resources should be made available for awareness-creation, for technological preventive and responsive interventions, as well as for regular, structured engagement of all stakeholders, including the Nigerian Navy, among others.

We recognise that the intricate web of beneficiaries of oil theft might seem to make it difficult to stop the practice.

But Nigerians have trust in this Administration and in its determination to “kill corruption before it kills us”. This should fire the government to put an end to this rot!

Mr. President, the ball is in your court, and, like always, the buck stops with you!

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