By Adewale Sanyaolu
Recent surge in pipeline attacks in oil producing parts of the country is threatening to derail the second phase of the naira-for-crude deal.
Stakeholders have warned that as sabotage of key oil infrastructure intensifies, the future of the presidential initiative, aimed at bolstering local production of petroleum products and cutting back on heavy foreign exchange spend on imports, grows increasingly uncertain.
On October 1, 2024, the federal government officially flagged off a strategic shift in its oil trade policy by commencing the sale of crude oil to the 650,000 barrels per day Dangote Refinery and other local refineries in naira.
The move was announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who disclosed that the initiative had received the Federal Executive Council’s approval as far back as July 2024, with implementation scheduled for October.
Industry stakeholders have lauded the Crude-for-Naira policy as a good measure that will ease pressure on the US dollar, enhance foreign exchange stability and boost confidence in the naira.
A second phase of the policy is designed to extend this arrangement to modular refineries across the country, ensuring they gain reliable access to crude oil and are able to maintain consistent operations, contributing to energy security and domestic refining capacity.
At the weekend, Oando Plc, a leading indigenous oil producer, reported a series of sabotage attacks on its pipeline infrastructure in Bayelsa State within the span of a week.
In a statement cited by Reuters, the company, now the owner of Nigerian Agip Oil Company, formerly a subsidiary of Italy’s Eni, revealed that the targeted facilities include the 18-inch Tebidaba-Brass crude oil pipeline in the Brass Local Government Area and the 24-inch Ogboinbiri/Obiobu gas pipeline in Southern Ijaw.
Oando described the incidents as deliberate acts of vandalism and raised fresh concerns about the persistent threat of sabotage in Nigeria’s oil-producing regions and the implications for energy infrastructure security and production stability.
The company said it has activated an emergency response to contain the impact and deployed leak repair teams to the affected sites, a spokesperson said in a statement.
Oando said it was working with authorities to conduct a joint investigation visit to determine the extent and cause of the sabotage.
After the visit, the company will commence full-scale repairs to resume operations “as quickly as possible”, Oando said.
Pipeline sabotage and crude theft are some of the major reasons that oil majors like Shell, Exxon Mobil, Total and Eni have sold their onshore and shallow-water fields in Nigeria to concentrate on deep-water operations.
Prior to the Oando attack, a fire incident had engulfed the Trans Niger Pipeline (TNP) at Bodo, Gokana local government area of Rivers State.
The Trans Niger Pipeline (TNP) operated by Renaissance Group which recently acquired 100 per cent stake in Shell Petroleum Development Company (SPDC) which has a capacity of around 450,000 barrels per day, is a major oil artery that transports crude from onshore oilfields to the Bonny export terminal.
The consortium, which includes Nigerian exploration and production companies Aradel Energy, First E & P, Waltersmith, and ND Western, along with the international energy group Petroline, now operates Shell’s former onshore subsidiary in Nigeria.
A statement by the Rivers State Police Command explained that a fire incident occurred at the Shell Petroleum Development Company (SPDC) operated Trans Niger Delta Pipeline, located at the border of Kpor and Bodo communities.
“During a routine night patrol, security operatives observed the incident and promptly alerted SPDC management. The latter initiated necessary safety protocols, including shutting down the affected pipeline. As a result of swift intervention, the situation is now under control, and there is no further threat to residents or the environment.”
The statement added that the Rivers State Police Command has commenced a thorough investigation to determine the cause of the fire.
“In connection with this, two individuals have been taken in for questioning as part of efforts to uncover any potential act of sabotage. The Command remains committed to ensuring that perpetrators of criminal activities are identified and brought to justice.
We urge residents to remain calm and vigilant, assuring them of our unwavering commitment to protecting lives and property. The Command will not relent in its efforts to rid the state of criminal elements and maintain peace and security for all.”
Speaking to Daily Sun in a telephone interview, Managing Director of Flex Data Nigeria Limited, a firm operating in the oil and gas sector, Mr. Jude Chukwu, said the resumed attacks on critical oil assets will constitute a major setback to smooth takeoff of the second phase of the deal.
He said attacks on these assets will prevent oil companies from going into production while those already in production are from time to time fixing damaged pipelines.
“With all these attacks here and there, where will these refineries get the crude oil from. The oil production companies that were meant to drill the oil and transport them are facing attacks on their pipelines almost on a daily basis.’’
Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), Mr. Ichie Idoko, in a an interview with Daily Sun said the implementation of the second phase of the deal remained crucial for the survival of modular refineries in the country.
He lamented that refineries are currently out of operation due to unavailability of feedstock.
According to him, the development poses grave danger to employment and investment as most refineries operators have taken loans from banks but were now struggling to service the debts due to lack of activity.