…124,800 litres of petroleum products refined daily
‘…Nigeria loses N13.1bn in both states every year’
…It’s much more than that – Contractors
…It’s not true – Minister
…Military, worship centres shielding oil thieves – NNPC
…N1.2bn oil recovered in 2 weeks – Military
At least 286, 490 barrels of crude oil amounting to 45,552,000 million litres of refined petroleum products are illegally refined in the creeks of Delta and Bayelsa states alone, annually.
This comes from the more than 400 large and medium size illegal refineries spread across the creeks of the two states. Blueprint gathered that they are currently operating and refining an average of 124, 800 litres of sundry petroleum products daily.
However, the federal government has discountenanced the claim stating instead that people are merely parading unsubstantiated figures. The Minister of State for Petroleum Resources, Timipreye Sylva, who countered the assertion, challenged those with verifiable facts to come forward and present such to the government.
Nonetheless, our sources said about one third of the total number of illegal refineries in the creeks of the Niger Delta are domiciled in the two states, while the remaining two thirds are distributed among Rivers – where the majority of illegal refining and bunkering takes place in Ondo, Akwa Ibom, Edo, Abia and Imo states as well as Lagos state.
These refineries better known in the local parlance by the operators and non-operators as kpo fire, refine about 600 drums of crude oil daily into various petroleum products majorly petroleum motor spirit (PMS – petrol), automotive gas oil (AGO – diesel) – aviation fuel which is also used by heavy duty vehicles and minimally kerosene for domestic uses mostly by the very low income earners and rural dwellers.
An average drum measures 8.8m in height and 2.4m in diameter and contains 208 litres of refined product- PMS, but the barrel volume of crude oil is 159 litres. Therefore, on average 45,552,000 litres of petroleum products or 286 490 barrels of crude oil are refined illegally every year.
As of May, on an average, a barrel went for $109 meaning that Nigeria loses $31,227,410 or N13, 053, 057, 380 (using the official rate N418 per dollar) to illegal refiners in the two states alone.
Further findings
Our four-month investigation further revealed that on a daily basis at least 200 drums containing refined petroleum products are ferried from the factories of illegal refiners to vessels at various loading points.
Some of the refined goods are conveyed in 2,000-horsepower boats to various locations where they are eventually discharged into jerry cans, white polythene bags and trucks and retailed to buyers. Others deployed the services of flying boats to ferry their goods to waiting buyers at Ogbeh ijoh market in Warri, etc.
Our correspondents, for days, interacted with people that identified themselves as ex-operators of the illegal activities, agents of the refiners, and contractors responsible for remediating bombed pipelines.
A former community leader, who had served jail terms for activities not unconnected with illegal bunkering in the Niger Delta, said refining activities are openly conducted in the presence of security agents in the creeks.
These security operatives are paid daily deve – a slang for development levy – and allowed to freely carry out their illegal activities. However, the so-called development levy ends up not in the public treasury, but in the pockets of officials of respective security agencies who curiously provide cover and protection to the perpetrators of this economic sabotage.
400 refining camps
One of our sources, who for fear of reprisal from operators and militants, wanted his name kept secret, said he was an operator of an illegal refinery for more than a decade around Obotobo creek before he was ‘compelled’ by his aging parents to abandon the business.
He said, “Between Warri and Yenagoa, there are more than 400 active illegal refinery camps. I have worked in at least six for some 15 years. In my area alone, I can take you to six or more illegal refineries. Business (refining operation) booms there continuously.
“We used to refine crude oil into petroleum products; petrol and diesel almost every night and the interesting part of the business, which basically is the lure, was the no lack of patronage. Often, agents would trouble us to work harder as requests for supply were often more than we could handle.
“Like Jones creek, there are illegal refining points there; Yokri inside Obotobo creek, there are more than six refining and loading points there. In the Yenagoa area, in almost all the villages aligning the path of the creek there are many refining camps. Wherever products are refined, we ensure that there are loading points known by both agents and contractors who engage community boys to ferry their products to designated places for onward discharge into heavy duty vehicles parked somewhere in the hinterlands.
“Even in Okpai, any casual visitor who is observant would easily notice and count no fewer than 12 to 18 “kpo fire” camps. The operation is almost always done at night because they don’t want to attract unnecessary attention.”
Similarly, an ex-militant whose job, according to him, was to protect operators of the kpo fire business, claimed that there are dozens of ‘factories’ in and around Benneth Island, Opumami, Asukpo, Egwa creeks.
“In these areas alone you could easily count up to 100 factories that daily chunk out several litres of refined petroleum products. Although the Joint Task Force only two weeks ago destroyed the camps in some of these places, their activities resumed in full force almost immediately.
“The boys are up and running in the kpo fire business again because the camps and containers of distilled products and not the factories themselves were actually destroyed”, he said, stressing that the business has suffered no lull in its operation since only a paltry number of factories were partially destroyed.
A contractor’s disclosures
A contractor, who handles remediation of pipelines for the Pipelines Products Marketing Company (PPMC), but declined to have his name in print, said the 400 illegal refineries figure was a moderate figure. He said “crude oil is cooked by petty crude oil thieves in all knocks and crannies in the creeks, and therefore, it is difficult to ascertain the actual figure of barrels of oil stolen daily in Nigeria.”
He said the security operatives are only concerned about the activities of big-time unlicensed operators of illegal refineries and not about those whose camps are disguised as palm-wine distilling camps. He said further that the security operators only trouble recalcitrant refiners who declined to indulge them with generous cash in exchange for protection.
Known locations
Futek Zekoregha, a former community leader that has been in trouble with the state for allegedly opposing illegal bunkering, said those in positions of authority, particularly naval officials, are fully aware of the various locations where illegal refining takes place.
“The government is aware. The army and the navy know where the unlawful activities take place, but after collecting their ‘cake’ they turn blind eyes and let the boys operate without molestation.
“How come all the camps they destroyed are always almost rebuilt and back to business sometimes barely a week after the military assault on them? No, they know where the illegal refineries are located, but this is Nigeria if you know your way with the authorities you do no wrong,” he said.
FG’s admission
In March, this year, the federal government had cried out over the loss of about $3.27 billion worth of oil to thieves in 14 months. The calculation however excluded loss from illegal refining activities.
The government owned up to the adverse impact of the lingering oil theft on the economy during a presentation by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at a stakeholders’ engagement in Abuja, saying it was extremely worried about the huge loss of oil revenue to vandals.
The government also said high-level cases of oil theft had become a threat to the country’s corporate and economic existence, with the industry now thinking of transporting crude oil from fields to export terminals by trucks.
The federal government asserted that the bulk of the oil theft occurred mostly from Bonny in Rivers and Brass and Forcados terminals.
The NUPRC chief executive, Gbenga Komolafe, who addressed the oil stakeholders, confirmed the assertion saying even the government was at sea over the actual amount of crude oil stolen.
“You will recall that in the last one week, we have set up a crack team to determine the accurate figure because as a government, we cannot continue to act on the basis of an abstract or inaccurate figure in dealing with an important issue as crude oil theft because the issue goes to the heart of federation revenue,” he said.
NEITI’s revelations
The Nigerian Upstream Petroleum Regulatory Commission recently said the country loses more than 115,000 barrels per day to oil theft and vandalism. It said Nigeria lost 42.25 million barrels of crude in 2019 and 53.28 million barrels in 2018 to oil theft.
The Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya Orji, had in March in the released 2020 Petroleum Industry Report, said in five years (2016 to 2020), the country lost over 270 million barrels of crude to theft and sabotage.
According to NEITI, at a global cure price of $40 per barrel in 2020, Nigeria might have lost about $1.560 billion or N648.5 billion to the incidents.
Based on the data from 22 of the 69 participating companies, 39.16 million barrels (mmbls) of crude valued at $44,73 million (or N15.71 billion) were stolen in 2020. An average of 107,293 barrels per day crude loss occurred through 349 cases of pipeline vandalism during the year. However, the figure was a drop in the cases from 1,387 cases recorded in 2019.
Minister counters
Reacting to the alleged existence of more than 400 illegal refineries in Delta and Bayelsa states alone, the Minister of State for Petroleum Resources, Timipreye Sylva, dismissed the claim, saying it was a figment of some persons’ imagination.
“Who counted them to be sure of the number? People keep giving figures. How did they arrive at it? How did they arrive at those figures? I am not disputing the fact that there are many illegal activities going on there but for people to begin to put a figure, I don’t begin to understand.
“As far as we are concerned that is a cock and bull story. Yes, there are criminalities out in the creeks, no doubt about it. They are vandalizing pipelines”, he said through his Special Adviser on Media and Communication, Mr. Horatius Eguatu.
The minister said the federal government had taken proactive steps to curb illegal refining in the Niger Delta region, as evidenced by the marching orders the president gave to the military top brass to stop all illegal refining activities throughout the region.
“And the military has moved in and they are recording successes. Criminal elements are being arrested and handed over to the police. If anybody says anybody is involved, let them point them out and if the government fails to take action then you can conclude that the government is compromising,” he said.
‘Military, worship centres shielding oil thieves’
Recently, Mele Kyari, the group chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, pointed fingers at churches, mosques, and security agencies as well as host communities for providing cover for crude oil thieves.
The Company disclosed that 700,0000 bpd were missing from its exports as thieves stole some oil and companies shut operations in other fields to avoid the thieves.
Army, Navy’s defence
However, the Defence Headquarters (DHQ) swiftly debunked the claim that its personnel were involved in oil theft and illegal oil bunkering in the Niger Delta. The Director of Defence Information, Brig.-Gen. Jimmy Akpor, said the allegations were unfounded and said there were aggressive onslaughts on illegal bunkering and oil theft across the region.
Similarly, Musa Danmadami, the director of defence media operations, said oil thieves had been denied N1.2 billion by the military within two weeks of Operation Delta Safe, stating that the Navy seized N664.8 million worth of crude oil, N546.7 million worth of diesel; N12.2 million worth of Kerosene;
and N11.8 million worth of petroleum products.
He said troops of Operation Delta Safe in collaboration with the Department of State Service (DSS) have continued to deny criminal elements freedom of action.
“Also, troops of Operation Delta Safe discovered and destroyed 67 illegal refining sites, 11 wooden boats, 218 storage tanks, 168 cooking ovens, and 61 dugout pits within the period under review.
“Troops also recovered 2.07 million litres of crude oil, 706,000 litres of automotive gas oil, 15,500 litres of dual purpose kerosene and 67,000 litres of premium motor spirit.
“Eight trucks, three pumping machines, three outboard engines and three generators were also recovered, while five pipeline vandals were also arrested. All recovered items were handed over to the relevant authority for further action,” he said.
Danmadami said further that the troops worked in collaboration with the DSS to continue to curb activities of economic saboteurs. He also disclosed that in a joint border patrol troops conducted anti-smuggling operations at Sawa Sawa village along Owode-Apa bush path in Badagry LGA of Lagos state, yielded positive results.
“Similar operations were carried out at Oke-Agbede Waterside in Imeko Afon LGA, Oyan waterside, Yewa south, Yewa north and Ado-Odo/Ota LGA of Ogun state.
“Consequently, a total of 449 Jerri cans of PMS (30 litres), 529 (50kg) bags of foreign rice and one vehicle were recovered. All recovered items were handed over to the Nigerian Customs Service in Abeokuta, Ogun state.”
‘Nigeria’s oil output lowest in 32 years’
Meanwhile, it was gathered that Nigeria’s total oil and condensate output dropped to an annual low of 1.18 million bpd in August, according to the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The NUPRC data showed that Nigeria’s crude oil production fell below one million barrels per day (bpd), the lowest in 32 years.
Also, data from the Organization of the Petroleum Exporting Countries (OPEC) confirmed that output never fell below 1.4 million bpd, even during the turbulent years of militancy in the Niger Delta.
At present, Nigeria has slipped behind Angola and Libya as Africa’s largest exporter in August, according to OPEC figures. Its highest crude and condensate output this year, recorded in January, was 1.68 million bpd.
SOURCE: blueprint.ng
