By Adewale Sanyaolu
The recent allegation by former Niger Delta militant, Asari Dokubo, that the Navy and Army were responsible for 99 per cent oil theft in the country may have stirred the hornet’s nest.
This was as the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, recently disclosed that the country was losing $1.9 billion monthly to oil theft .
Dokubo stated this when he met with President Bola Tinubu at the Presidential Villa, recently.
He maintained that 99 per cent of oil theft and bunkering in the Niger Delta is done by the Nigerian military, notably the Army and the Navy.
Briefing State House correspondents after the meeting with the president, Dokubo said even if one billion contracts are awarded to everybody in the Niger Delta to stop oil theft and bunkering, it will not work because of kingpins fully armed from the Army and the Navy.
He disclosed that he has volunteered to end the menace, knowing that he will be fully protected by the Tinubu’s administration.
But, the allegation didn’t go down well with the Navy and Army. They have demanded that Dokubo name the officers involved in this act of sabotage.
Director Naval Information (DINFO), Commodore Ayo-Vaughn, dismissed Dokubo, claims and said the ex militant is only trying to be relevant.
He said the Nigerian military and the navy in particular has taken the fight against crude oil theft to the creeks and waterways where these criminals are located to give them the fight of their lives.
The navy spokesman while noting that the navy has continued to record tremendous challenges in the war against oil theft, challenged Dokubo, to name the military officers engaged in such acts rather than ranting and making spurious allegations.
Ayo-Vaughn in an audio message to Saturday Sun said: “What I can say officially is that the Nigerian military and the Navy in particular is at the forefront of fighting crude oil theft at all levels. Why I say at all levels is because crude oil is stolen from pipelines and refined in the creeks for the local market. The local buyers. It also allegedly stolen from offshore at sea. You remember the case of Eric Edun that was made to pay fines to Nigerian government after they were arrested and brought back from Guinea Bissau, Malabo island and made to face court orders. It demonstrated the will of the Navy to go as far as even beyond our waters to arrest a ship that attempted to load without licence without due approval. In April 1, last year, I was there physically on board one of our ships at FOT, in Onne, when the Navy launched operation Dakata Fs barawo, which means Stop the Thief in Hausa language. Stop the Thief that is stealing the nations natural resources. Nigerian Navy has been fighting oil theft, taking the fight to the creeks. As I speak to you, our men are currently in the creeks fighting oil theft.
“So what I will just say is that If Asari Dokubo is seeking some form of relevance and whatever, and he alleges that there is a cabal of military people that are involved in crude oil theft, let him bring the names. Nobody is afraid of getting the names of those involved in crude oil theft. You cannot make such spurious allegations and think that we will just sweep it down the carpet. “There will be, I believe an official response from Defence Headquarters on the matter. The Chief of Defence Staff does not condone such acts, nor the Chief of Naval Staff under whom I serve. The Nigerian Navy as an organization is actively involved in the fight against crude oil theft and the resources in the Niger Delta, so for anybody to say that there is a cabal of military officers, the only simple thing is, bring the evidence, bring the names. I rest my case.”
Also speaking, Director, Army Public Relations, Brigadier General Onyema Nwachukwu, denied the allegations. Nwachukwu in an interview with Saturday Sun, said The Nigerian Army has been vigorously engaged in the fight against illegal oil bunkering, oil theft and illegal oil refining in the Niger Delta and this has yielded positive results as evident in the increase in daily oil production per barrel from an abysmally dwindling output. The Nigerian Army has zero tolerance for any compromise on the part of our troops and no black sheep will be spared if identified.”
But beyond the allegations and counter allegations on this menace, it is on record that the country’s is heavily bleeding over the rising wave of oil theft, which has almost crippled the activities of both International Oil Companies (IOCs) and their indigenous counterparts.
Last year March, the Chairman of Heirs Holdings, Mr. Tony Elumelu, in a tweet, lamented that Nigeria loses over 95 per cent of its oil to thieves.
The Heirs Holding boss lamented that Bonny Terminal that should be receiving over 200,000 barrels of crude oil daily, gets less than 3,000, forcing Shell and Eni to declare a force majeure.
Shell has said it would try to go elsewhere for business. The lost shipments could be significant for Nigeria. The country was scheduled to export almost 1.5 million barrels a day this month, loading plans show.
“This morning(yesterday), I was listening to my colleagues at the office bemoan the very pressing issues that they face every day in this country, and how things have been getting worse and worse -no electricity for five days, hike in the price of diesel, freighting food inflation.
Why are we paying taxes if our security agencies can’t stop this? It is clear that the reason Nigeria is unable to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota is not because of low investment but because of theft – pure and simple.
Meanwhile, oil producing countries are smiling as their foreign reserves keep rising.What is Nigeria’s problem? We need to hold our leaders more accountable,” Elumelu had lamented.
Regrettably, over one year since Elumelu pointed the attention of government to the escalating problem of oil theft on the economy, nothing seems to have changed as the country has lost an opportunity to produce and sell about 65,700,000 barrels of oil in the last one year due to issues bordering on pipeline vandalism and the resultant oil theft.
IOCs lament N2.3trn oil revenue loss
The Chairman of Shell Companies in Nigeria, Mr. Osagie Okubor, had disclosed at the Nigerian International Energy Summit held in Abuja in April this year that the 180, 000 barrels per day Trans Niger Pipeline had remained shut for more than one year- from March 2022 to March 2023.
The loss from March last year to March this year brings the total shut in/loss to about 65, 700, 000 barrels. Brent crude price averaged about $83 per barrel from March 2022 to March 2023, meaning the country could have lost as much as N2.3 trillion to the menace. The TNP, a Joint Venture operated by SPDC is a major pipeline capable of transporting about 180,000 barrels of crude per day to the Bonny export terminal.
Speaking at the NIES, Okunbor said the TNP remained shut for one year due to the massive crude oil theft on the pipeline.
The pipeline, according to Shell, is part of the gas liquids evacuation infrastructure, critical for continued domestic power generation and liquefied gas exports.
He said: “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 per cent capacity. I think today that is almost just how much gas we can supply,” he said.
“And this is because one of our key gas infrastructures — the TNP — was shut down for one year. We removed 460 illegal connections on that line. We just reopened that line. Today we are struggling to catch up with our first programme.”
Okunbor said the loss was often viewed as affecting Nigeria’s oil production quota to the Organisation of Petroleum Exporting Countries.
He stressed that the situation was also having devastating implications on the supply of gas to the Nigeria Liquefied Natural Gas.
“So, if you ask me what the number one issue has to be for the incoming administration, it has to be the security of oil and gas infrastructure. If you don’t fix it, then we have a huge problem on our hands,” Okunbor said.
Okunbor advised the new administration to prioritise the security of oil infrastructure.
On his part, Managing Director of Nigerian Liquefied Natural Gas Limited, Philip Mshelbila, pointed out that 40 per cent of globally renowned gas firms’ capacity had been lying fallow due to theft.
He added that the lack of power to execute the recommendations and policies in the various documents and laws of the oil sector remained a challenge to the industry.
Last year, the Nigerian National Petroleum Company said it detected an illegal connection on the Trans Escravos pipeline looped to the four-kilometre Afremo test line.
Panel on oil theft indicts operators, regulators
Curiously, a report by the Special Investigative Panel on Oil Theft and Losses in Nigeria had in March this year indicted operators and regulators in the country’s oil sector for the widespread act of sabotage in the industry.
The panel had recently submitted its report to the National Security Adviser (NSA), retired Maj.-Gen. Babagana Monguno.
A statement by Mr. Zakari Usman, Head, Strategic Communication, Office of the National Security Adviser (ONSA), quoting the report, said the panel observed that crude oil losses arose from a lack of proper reporting of crude oil production, illegal refining; theft from wellheads; and diversion from sophisticated pipelines network.
The panel also attributed losses to the absence of a robust industry-wide metering system and an unworkable security arrangement.
“The issue of the confusing roles of regulatory agencies was also cited as being responsible for making the detection of theft/losses difficult.”
The statement added that in arriving at its submission, the panel engaged key stakeholders both within and outside the oil and gas industry, including state governments; ministries, departments and agencies; security agencies; regulatory agencies; international and indigenous oil companies; traditional institutions; host communities; artisanal refiners; among others. It also said that, in discharging the responsibility of the panel, it received and reviewed several memoranda and reports on oil theft and losses.
“The panel discovered several layers of involvement in the illegal theft of crude oil despite the best efforts of the Armed Forces and other security agencies to combat the activities of the oil thieves.
The chairman of the investigative panel, Maj.-Gen. Barry Ndiomu (retd) , called for quick implementation of the report, maintaining that if the government implements the recommendations in the report, oil theft and losses would be adequately addressed.
Efforts to tame oil theft
Having explored all forms of strategy to tame the monster of oil theft which appears not to have yielded the desired result, the NNPC Limited awarded a N48 billion pipeline surveillance contract to a company with links to a former leader of the Movement for the Emancipation of Niger Delta, Government Ekpemupolo, popularly known as Tompolo. The NNPCL despite public outrage described the deal as the ‘right decision’.
Speaking at the 49th session of the state house briefing at the Presidential Villa, Abuja last August, Kyari, said the decision was necessitated by the need for Nigeria to hire private contractors to man its oil pipeline network nationwide due to massive oil theft.
Kyari argued that it was not the first time that individuals within the Niger Delta region were awarded contracts for pipeline surveillance.
Kyari said that the federal government is not dealing directly with Tompolo but a private contracting company that Tompolo has interests in.
“The security agencies are doing their part, end-to-end pipeline surveillance would require the involvement of private entities and community stakeholders,” Kyari said.
Aside the pipeline surveillance contract, NNPCL has also floated a whistle-blowers policy which would see people who discreetly report oil theft in their communities handsomely rewarded. There’s also now some form of online real-time monitoring of activities on some of the nation’s oil assets.
In addition, it began consultations with international regulators to ensure that aside detecting stolen Nigerian crude oil, buyers of illegally sold oil are punished.
According to Elumelu, due to the efforts of NNPCL, Heirs Oil and Gas has now witnessed 96 per cent recovery rate.
“When I listened to the Group CEO speak today, talking about us moving to 2.5 million barrels, we challenged him to do more. I believe that it is achievable. From losing 97 per cent of our 50,000 barrels production, interestingly and it will be bad of me to have this platform and not share this here.
“That day, I got a call from the GCEO and I thought he was going to kill me for speaking up, to my greatest surprise, he said to me Tony, we are sorry about what is happening, we are doing something about it, it will be corrected.
“They worked as a team and the Board of the NNPC, the federal government, the security agencies, and recently, our recovery factor was 96 per cent. So GCEO NNPC, you have delivered.
“I speak from experience, a beneficiary and one who cried out before and today standing up today to say we have improved our production and that is what we need to encourage more investments in the industry.
“Today, we lift 501,000 barrels of oil (per month) bringing our total lifting this year alone to 2.6m barrels of oil. I am a great beneficiary of the new NNPC,” Elumelu stressed.
Also, the Deputy Managing Director, Deepwater Asset, TotalEnergies Upstream Nigeria Limited (TUPNI), Mr. Victor Bandele, expressed appreciation to Kyari, over what he described as his patriotic intervention that unlocked 30,000 barrels per day of new oil from the Egina and Akpo fields expected before the end of the year 2023.