Adewale Sanyaolu
The Federal Government as part of its oil sector reforms last week in Lagos recorded a major milestone in the history of the country’s oil and gas sector with the inauguration of the Crude Oil and LNG Tracking (COLT) to final destination portal by the Minister of State for Petroleum Resources, Mr.Ibe Kachikwu.
Prior to the launch of the portal, accurate and real time data of the country’s daily oil production figure has been a subject of controversy as there have been disagreements between government agencies responsible for collation of data for revenue purposes.
On many instances, figures presented by the Federal Inland Revenue Service, International Oil Companies(IOCs), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA) and the Nigeria Customs Service (NCS) often contradicts the ones presented by the industry regulator-Department of Petroleum Resources (DPR).
Kachikwu had while inaugurating COLT command centre at the DPR headquarters in Lagos admitted that the dearth of figures for the country’s actual oil production was not in doubt, adding that the NPMS portal would put an end to that national embarrassment. He equally said oil theft remained a major challenge while assuring that stolen oil could now be tracked and traced to its destination.
More worrisome was the recent disclosure by the Nigeria Natural Resource Charter (NNRC) that the country lost about N3.8 trillion within the last two years – 2016 and 2017.
According to the Assistant Director, Information Communication Technology, Department of Petroleum Resources(DPR), Mr.Ayo Cardoso, the National Production Monitoring System (NPMS) portal among other things would help track the country’s actual production figure, movement of vessels from one point to the other, track revenue and also determine the volume of refined petroleum products imported into the country.
What COLT, other automation seeks to achieve
According to the Minister the essence of the initiatives was to be able to track crude oil productions and vessels on the onshore and offshore the country’s waterways.
“The clear mandate as a Minister of State is to try and change the oil industry, because we were deeply worried about what was looking like a value dip in terms of the reputation of the oil industry and some of the issues of corruption that were all over the place. I said to them, let the people come out and know what they have been doing over the last couple of years.
One of the key areas of focus was issue of transparency; how do we ensure that we are transparent in our operations, how do we ensure that we have speed to get approval for licences that previously will take forever. How we ensure that every monies that is collected in this sector is tracked and goes straight into the federation account, one of the problems we have is that what quantity of crude we produce, how much are the leakages.
We have rolled around this for decades and I told them I want us to be able to tell Nigerians everyday what we produce with some certainties,” Kachikwu explained.
He said the agency has been able to track production, track the movement of that production, following these initiatives had launched series of IT-based platforms and interventions which had helped Nigerians into the next foray of how oil companies and oil operations in this country should run. “All our fields are largely tracked online now and what it means is that we can actually feed the nation on what was our actual production and from which fields and what is the volume and also identify if there are leakages.
“We have also had the COLT which is basically tracking of crude oil and LNG. It is just not enough to produce, but to know where it is going to. As you know, some of our problems is both accounting for production and what happened to crude oil produced.’’
Kachikwu said that what COLT does for Nigeria was to be able track any of these vessels be it LNG or crude and track where it is going, adding that Nigeria can also track those vessels to the point of discharge.
Oil theft still a menace
The Minister while alluding to the fact that oil theft still remains a major concern explained that, the fact that COLT portal is in place will help put some acts of sabotage in check while sending a signal to the international community that it is no longer business as usual in Nigeria as those planning to perpetrate the act are fully aware that a tracking system to hack them is already in place.
He said crude oil theft is still there and there was no point pretending about it, adding that significant efforts and progress have been recorded. He explained that the COLT system irrespective of oil theft will help to determine the actual volume of sip page when there is a compromise on a particular pipeline while also helping to determine where major breaks occur, thereby assisting security agencies to zero in on such locations.
Human rights lawyer and Senior Advocate of Nigeria, Femi Falana, had recently alleged that $12.7 billion worth of crude oil was stolen from the country between 2011 and 2014.
Falana who spoke at the 40th anniversary celebration of the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja, and called for the immediate recovery from oil companies, royalties that ought to have accrued to the Federation Account since 2014. “The study revealed that the value of the money from oil stolen from Nigeria is $12.7bn. The oil was discharged in one port. We have identified who the oil majors are and the shipping companies involved; but since 2014, we have been begging the Nigerian government to recover the money,” Falana stated.
In a similar vein, the Nigeria Natural Resource Charter (NNRC), last January disclosed that its latest report on crude oil theft in Nigeria showed the country lost about N3.8 trillion within the last two years – 2016 and 2017 to the menace.
The UK-funded non-governmental organisation (NGO) also added that the estimated financial value of what Nigeria lost through crude oil theft in the Niger Delta was higher than the current combined allocations of the country to health and education in the 2018 federal budget. NNRC provides policy options to guide government and societies in their use of natural resources to ensure maximum and sustainable returns for citizens.
It said: “The combined allocations for health and education amount to N189.4 billion, which translates to a mere 8.4 per cent of the estimated value of losses from oil theft two years ago.”
The ‘NNRC’s Oil Theft in Nigeria’ report identified poverty, unemployment, poor governance, pervasive corruption and the neglect of the Niger Delta region as major reasons for the emergence and sustenance of oil theft over time.