The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said that Nigeria may have lost as much as $3.27 billion to vandalism in 13 months (between January 2021 and February 2022).
In addition, it put the average monthly value lost during the period at $233.99 million, while on the average it estimated that the country may have lost as much as $7.72 million on a daily basis.
The agency reeled out these figures yesterday in a presentation during its meeting with Independent Petroleum Producers Group (IPPG) and the Oil Producers Trade Section (OPTS) which form the core of companies drilling oil in Nigeria.
The meeting was held as part of efforts to halt the massive oil theft in the country.
Describing the massive loss as a national disaster, the CEO of the commission, Mr. Gbenga Komolafe, told the groups that the meeting was to share information as to the actual number of crude oil losses confronted by the entities, noting that the industry figures needed to be reconciled.
However, Komolafe stressed that the issue of oil theft had become critical to have divergent data on the menace, announcing that the reason for the meeting was to get all stakeholders’ view so as to confront the challenge using a common front.
“This is a one-agenda meeting and it centres on the issue of crude oil theft. The issue of oil theft has become a very worrisome one to the nation, to the government and I believe to you as investors in OPTS and IPPG, even as it is to us as your regulators.
“So, this is for us to sit at a roundtable and hear each other and share information. More worrisome, is that in recent times, we have had conflicting positions as to what is really happening in the upstream. As a responsible regulator, there’s need for us to agree on the way forward and to hear your perspective.
“We need to have accurate figures. As a government we cannot continue to use abstract or inaccurate figures in a matter as important as crude oil theft. We have set up a crack team to be able to have the information we need,” he stated.
Komolafe maintained that the challenge remained a disincentive to investment at a time Nigeria was in dire need of foreign exchange, assuring that the government was determined to make the industry more attractive for investors.
While promising positive change, Komolafe stated that no aspect of the value chain would be unattended to.
He announced that President Muhammadu Buhari had directed that Nigeria must be rid of the menace.
Komolafe said the government was determined to end the menace so that the country can benefit from the rising price of oil and also be able to protect the environment from oil spills.
“The concern of the government is to increase our national oil production. Basically, we are an oil economy and when the upstream is sick, it affects the wellbeing and the health of the country.
“The situation that is happening in the upstream is getting to the level of threat to the existence and wellbeing of Nigeria. As a responsible regulator, we are very concerned about it. We have been doing a lot and we are not relenting.
“We will do everything possible to increase oil production in a manner that will make the nation benefit from the upward swing in the international price of crude oil,” he noted.
Similarly, during the presentation, the commission disclosed that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal as well as Brass Terminal.
It listed factors aiding the criminal activities as economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholder compromises.
The commission stated that due to the high level of theft, the country had been unable to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota.
Also speaking, the senior technical adviser to the CEO, Mr. Abel Nsa, said the impacts of the phenomenon include loss of value-a situation where government revenue is adversely affected, increased costs-due to frequent repairs of damaged facilities and environmental degradation due to spillages by the activities of saboteurs.
On actions taken to mitigate the challenge, he said work teams had been set up to deliberate on workable solutions, identify various responsible parties and propose improvement areas.
In addition, he noted that a public, private approach was being adopted while the implementation of the provisions of the Petroleum Industry Act (PIA) was ongoing.
He noted that on the community side, the outlook was to engage, carry out awareness campaigns as well as ensure prompt payment of community contractors, while the installation of check meters, engagement of competent entities for pipelines surveillance and pipelines integrity assessment were being envisaged.
Also speaking, chairman and MD of ExxonMobil, Mr. Richard Laing who represented OPTS, maintained that the issue had grown beyond mere theft to what he described as, “organised criminality” involving sophisticated operations.
“As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly it is a threat to investments, a threat to the health of the industry and wealth of the nation
“It is important that the stakeholders integrate their activities and their thoughts. As OPTS we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective.
“The language is very important and I think we use theft rather quickly. I don’t think this is theft, this is organised criminal activity.
“The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn’t some guy coming along and tapping into a pipeline and taking container crude oil. It is organised criminality,” he added.
