About N995.2 billion lost annually to crude oil theft – Report

An expatriate in the Oil and Gas industry for 15 years as well as Consultant to Nigeria Natural Resource Charter, NNRC, Niyi Awodeyi, says findings on crude oil theft in Nigeria by NNRC, has revealed that about N995.2 billion is lost annually due to crude oil theft, while estimated N3.8trillion was lost in 2016.

Awodeyi who also quoted a World Bank report as putting 80% of crude oil revenue in Nigeria in possession of just one percent of the country’s population, stated that the award of security contracts, “gave the actors access to the pipelines”, with surprise increase in crude oil theft.

Fresh Angle International can report that the Oil and Gas expert who spoke Tuesday May 28 at Effurun, Delta State, during a stakeholders’ engagement seminar on advocacy against crude oil theft, organized by New Nigeria Foundations, NNF, opined that the multinational oil and gas companies don’t follow International best practices in their operations in Nigeria.

According to him, at least 50% of the diesel used in Nigeria, especially in the Niger Delta, comes from local refiners, while 1,500 cases of pipeline breaches are reported per year.

Awodeyi also disclosed that the NNRC report, showed that proceeds from crude oil theft are used to fund militancy and their criminal ventures, noting that when the price of crude oil crashed to between 30 to 40 dollars per barrel, crude oil theft reduced and when militants want to renegotiate their payment, crude oil pipeline vandalism increases.

While stating that over 10% of the Niger Delta “is contaminated” due to crude oil theft, Awodeyi, noted that an extrapolated cost of 3billion dollars would be needed to clean up the region.

The Manager, Upstream of Department of Petroleum Resources, DPR, Warri, Ogbeni Bright Efe, while speaking on strategies to prevent crude oil losses, identified crude oil fingerprinting, collaboration with security agencies, licensing of all operating pipelines and enforcing all spill incidence reporting as measures being taken by the regulatory agency to reduce crude oil theft in the country.

A representative of Delta State Ministry of Oil and Gas, Godwin Oziboro, acknowledged that illegal refining and pipeline vandalism have been major threat to the economy of Delta State and Nigeria at large, blaming the crime on poverty, corruption, ineffective enforcement of the necessary law and poor governance.

An Official of New Nigeria Foundation, Layide Adesanya, in her opening remarks, spoke briefly on the negative impact of crude oil theft on the Nation’s economy and the need for all stakeholders to embark on extensive advocacy against crude oil theft.

It has been reported that roughly a quarter of stolen crude oil is sold locally. Illegal artisanal refineries located in Niger Delta “cook” the crude oil into separate petroleum products. The product yields 2 percent petrol, 2 percent kerosene and 41 percent diesel. The remaining 55 percent of crude goes to waste, most of which is dumped into the nearby water or into a shallow pit, resulting in environmental and health hazards.

Recently, an indigenous company declared force majeure on Nembe Creek Trunk Line, due to a fire suspected to have been the result of an illegal third-party breach. It was reported that the incident caused Nigeria’s oil production to fall 8 percent per day.

There have also been several incidents of third-party interference, tampering with mechanical components and the installed barriers on crude oil well heads, with evidence of illegal bunkering from the wells. For each incident, the oil companies take steps to immediately re-secure the wells. But the criminal activities persist and sometimes result to explosions or fire incidents.

This was the case with one of the IOCs – Chevron Nigeria Limited, CNL, operator of the joint venture between Nigerian National Petroleum Corporation, NNPC and CNL. At about 10:00pm on Thursday, April 18, 2019, a fire was observed at the Ojumole Well No.1, an idle and plugged well with no flowline connected to it. Ojumole field is in NNPC/CNL JV’s Western Niger Delta area of operations.

CNL conducted an overflight to evaluate the fire and has also mobilized emergency responders to assess the site, contain the fire and boom the area. The company also notified the community stakeholders and reported the incident to the Department of Petroleum Resources, DPR, National Oil and Spill Detection and Response Agency, NOSDRA and other regulatory and security authorities.

A Joint Investigation Visit, JIV to the site of the incident on Saturday April 20, 2019, by a team made up of regulatory agencies, community stakeholders and CNL, determined that the fire incident was reportedly caused by third-party interference. Environmental monitoring by independent, accredited environmental consultants was ongoing in the area as at the time of this report, while the company is currently working with contractors to safely put out the fire as quickly as possible.

A cross section of stakeholders at the engagement seminar on advocacy against crude oil theft

From left: Uju Obiora, Layide Adesanya & Kayode Adeboye

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