The Federal Government’s current resolve to curb oil theft has recorded some success in the past few months. However, some Nigerians have criticised the new strategy of setting ablaze the illegal oil vessels together with the stolen crude. There are speculations that the new method of dealing with oil thieves, which amounts to destruction of evidence, may be used to shield high-profile individuals involved in oil theft.
On July 11, an oil vessel, MT Tura II, conveying a stolen 150 metric tons of crude oil in the Escravos area of Niger Delta to Cameroon, was seized by the Joint Task Force, Codenamed ‘Operation Delta Safe.’ Surprisingly, the vessel was set ablaze by security operatives with the crude oil emptied into the waters.
Though the House of Representatives has ordered an investigation into the seized oil vessel and its subsequent burning, those behind the action reportedly explained that the decision to set it ablaze was to serve as a deterrent to would-be oil thieves. Many Nigerians believe the action was a ploy to cover up the real culprits. The crude aboard the vessel is said to be worth in excess of $12 million. Though the probe by the House of Representatives may curtail future destruction of similar vessels conveying stolen crude, the incident is one too many in recent months. It underscores the rising incidents of oil theft and the urgent need to curb them.
The July 11 incident was not the first of such daredevil oil theft in the country. In October 2022, MT Deima, with 150,000 metric tons of stolen crude oil, was intercepted and later burnt in the Warri Escravos River. Last month, a 12-man crew ship carrying hundreds of metric tons of crude was seized by a pipeline surveillance company, Tantita Security Service Nigeria Ltd and the Joint Task Force before it was set ablaze. The rogue vessel was discovered to have changed its name from MT Tura 11, to MT Ali Riza to escape detection by law enforcement agencies.
A year ago, the Nigerian Ports Authority (NPA) revealed that most crude oil vessels had devised new tactics to steal crude oil from the country. Recent statistics from the Ministry of Petroleum Resources showed that Nigeria loses about $1.9billion monthly due to oil thieves. It has been revealed that the operators of the vessels used for stealing oil ingeniously turn off their Automatic Identification System (AIS) to evade detection. The AIS is a technology device that usually aids the tracking of dubious ships in the Nigerian waters.
Over 400,000 barrels of crude oil are stolen daily from Nigeria. Besides, it has been reported that oil theft goes hand in hand with theft of buoys worth millions of dollars. Oil theft thrives simply because highly privileged Nigerians are involved in the cartel. The government, the security agencies, oil companies, and host communities must work in concert to effectively curb oil theft. Without curbing oil theft, the economy will collapse.
Unfortunately, Nigeria rarely meets its OPEC production quota of 1.99 million barrels per day as a result of oil theft and illegal refineries. In 2021, Nigeria’s oil production averaged 1.6 mbpd, but was reduced to 1.2 mbpd mainly because of the activities of oil thieves. This means that Nigeria has an idle economic capacity shortage of about 500,000 barrels per day. That is why, in spite of the present high oil price in the international market, Nigeria has not met projected revenue target.
The Nigeria Extractive Industries Initiative (NEITI) says that Nigeria lost $3.5billion in revenue. This represents 10 per cent of the nation’s foreign reserves. In 2019, the NNPC announced a loss of $159billion due to oil theft and pipeline vandalism. Let the government deal with the factors responsible for oil theft.
The government should adopt the model of Saudi Arabia’s oil company, Aramco, in checking oil theft. The model involves the use of video surveillance system in monitoring oil pipelines carrying crude oil from oil wells to flow stations. One of the lessons to learn from the activity of oil theft is the need to grow the economy beyond oil.
The emphasis now should be on the development of the non-oil exports. Apart from creating jobs, it will earn foreign exchange and attract more investments. Above all, non-oil exports have faster growth rate that will ensure a resilient economy.