•Oil theft bleeds the country pale and must be stopped by government
Nigeria loses monumentally to oil theft – a menace that has deprived the country of maximising her biggest natural resource and hobbled her economy over the years. This was a bitter fact again highlighted last week by Shell Petroleum’s disclosure that it eliminated hundreds of illegal tapping points from its Trans Niger Pipeline (TNP) before the facility was restarted after being shut down for one year.
Managing Director of Shell Petroleum Development Company of Nigeria (SPDC) and Country Chair of Shell Companies in Nigeria, Osagie Okunbor, said the oil giant detected and removed 460 illegal connections on the trunk line before resuming operations after a one-year shutdown. Owing to the fleecing points, the company has had to operate at 60 percent capacity. The TNP, operated by Shell, is a major pipeline capable of transporting some 180,000 barrels per day (bpd) of crude from oil fields in Rivers and Bayelsa states to Bonny export terminal.
Other oil firm executives as well lamented the grave impact of oil theft on their operations. Okunbor and other executives of international and indigenous oil and gas companies spoke at the just-concluded 2023 Nigeria International Energy Summit in Abuja where Vice President Yemi Osinbajo, announced government’s plan to generate 5,300megawatts of electricity from solar and produce six billion litres of biofuel annually.
In response to a question on what the incoming administration should address in the oil sector, Okunbor cited security of oil infrastructure as priority. “What keeps me awake today as regards my onshore business in Shell is the fact that we cannot operate a pipeline, and that’s what is responsible for the 60 percent capacity. I think today that’s almost just how much gas we can supply,” he said. “And this is because one of our key gas infrastructure – the TNP – was shut down for one year. We removed 460 illegal connections on that line, we just reopened the line. Today we are struggling to catch up with our first (export) programme,” the Shell chief added. According to him, the loss was reckoned as affecting Nigeria’s oil production quota to the Organisation of Petroleum Exporting Countries (OPEC), but it also had devastating impact on the supply of gas to the Nigeria Liquefied Natural Gas (NLNG). “So if you ask me what the number one issue has to be for the incoming administration, it is the security of oil and gas infrastructure. If you don’t fix this, then we have a huge problem on our hands,” he said.
Also speaking at the event, Managing Director of Nigeria LNG Limited, Philip Mshelbila, noted that 40 percent of the globally renowned gas firm’s capacity had been lying fallow due to theft. He also said lack of willpower to execute recommendations and policies in various documents and regulations on the oil sector remained a challenge to the industry.
The oil executives spoke against the backdrop of concerns often expressed by the Nigerian National Petroleum Company Limited (NNPCL) about how the menace of oil theft undermines Nigeria’s output and, consequently, financial returns. Early last September, NNPCL Group Managing Director Mele Kyari fingered various sectors of the Nigerian society as being complicit in the theft of millions of barrels of crude oil, alleging that make-shift pipelines and stolen fuel had been found even in churches and mosques. On his heels, another NNPCL chief and Group General Manager, National Petroleum Investment Management Services (NAPMS), Bala Wunti, said the oil firm was losing 470,000bpd of crude oil amounting to $700million monthly to oil theft. According to him, major pipelines, particularly those around Bonny terminal, could not function due to activities of criminals – like some 270bpd that ought to be loaded in Bonny but could not because of theft.
It must be acknowledged that efforts were made by government to tighten the noose on oil thieves, only that the consequential effect of these efforts have not translated to eliminating the menace. Among other things, government has engaged pipeline surveillance contractors on mega-billion naira deals. Some of the contractors reported eliminating illegal tapping points, like a four-kilometre long illegal oil pipeline in the Forcados area of Delta State that Tantita Security Services Limited linked to ex-militant Government Ekpemupolo, alias Tompolo, claimed late in 2022 to have uncovered. The contractors and conventional security services like the Navy reported a serial arrests of suspects that are yet to be tried before the courts. Besides, NNPCL reported having put in place a technology-based control and security system to curb oil theft, but the impact of this intervention is apparently tentative.
The experiences just reported by oil executives at the Abuja summit show why government must muster the willpower to decisively tackle down the stubborn menace that is laying the country’s common wealth waste.