By Kikelomo Brita
As oil companies and oil-producing nations reap bountifully from rising crude prices, producers in Nigeria have called on the Federal Government to urgently tackle the menace of oil theft in the Niger Delta, which is impacting negatively on their operations.
Hard hit are the indigenous producing companies who revealed to our reporter at the weekend that the giant strides recorded over the years in gaining a foothold in Nigeria’s upstream oil sector are gradually being eroded by oil theft which is aided by the rising crude oil prices in the international market.
“People are making petrodollars on the high seas, while we are experiencing a fall in production volumes,” said an indigenous oil producer last week.
The price of the international benchmark, Brent Crude, for the better part of 2021 and this year has been above $70 per barrel mark, jumping 7-year high to over $100 per barrel last week.
Nigeria’s Bonny Light, a favourite of refineries, and the country’s other blends are also selling within that range.
“The thieves are cashing in on soaring prices and there is a noticeable presence of barges and vessels in the creeks loading stolen oil from pipelines and transporting to large vessels on the high seas,” the producer said.
President of the Independent Petroleum Producers Group, the umbrella group for indigenous oil producers, Abdulrasaq Isa, lamented the challenges of the theft. “The key challenges now are in the areas of security and high operating costs. ’’We look forward to the government in finding long-lasting and sustainable solutions to these challenges,” Isa said.
Industry sources explained to our reporter that usually, crude theft is highest just after the flow station, as this is after primary treatment and so the flow is at a higher quality, easier to handle by the crude refiners.
One of them painted a grim picture of the prevalence of the theft. He said, “the ENI-operated pipeline to Brass terminal appears to be a favourite of many oil thieves; the AITEO Nembe Creek Trunkline is also recording heavy losses; Chevron’s production to Escravos suffers losses too; and to some extent, the TransForcados pipeline.”
“ExxonMobil offshore line to Qua Iboe Terminal is perhaps the least affected because they produce and transport their oil offshore,” he added.
Collaborating, an executive of an international oil company, who does not want to be named because of sensitivities involved, said while there is so much talk about oil spills like the recent one caused by sabotage at Santa Barbara in Bayelsa state, much more oil revenue is lost to the sale of stolen oil on the high seas, where the major challenges lie.
Illustrating the crime pyramid in the Niger Delta, a former Director of Shell Nigeria, who also lamented the situation, said it has many layers. “It’s not the boys in the creeks that are at the helm. Those boys cannot arrange the complex logistics, including transshipments to mother ships offshore and eventual export of the stolen crude. Obviously, some highly influential persons are involved.”
According to the immediate past Director-General /CEO of Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, “It is estimated that 80 percent of the stolen oil is exported, while the balance of 20 percent goes into illegal refining in “refineries” dotting the landscape of the Niger Delta creeks.”
He said: “The vessels and the illegal refineries are very conspicuous and visible to be noticed, yet these illegal operations have been going on without any significant challenge from Government or governmental institutions including security agencies.”
The Eastern Naval Command of the Nigerian Navy disclosed recently that it had deactivated 175 illegal refineries while arresting 27 vessels under 11 months in its areas of operations in 2021.
In September last year, the Nigerian government set up a committee on the recovery of crude oil and illegally refined petroleum products. The group comprised the Nigerian Upstream Petroleum Regulatory Commission (NUPRC; formerly DPR), the Nigeria National Petroleum Company Ltd., the National Oil Spill Detection and Response Agency, the Nigerian Army and Navy, and the Nigeria Security and Civil Defence Corps.
Recognizing this as a good move, the oil producers who spoke over the weekend, called for immediate action by the committee to stem the crushing tide of crude oil theft.
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