As Tinubu Steps Up Crackdown on Oil Thieves, Vandals

By Gideon Osaka

The incessant theft of crude and refined product and the mind-blowing figures of attendant losses in revenue has continued to gain national and international prominence in recent time with key operators in the industry warning that the country risks a major economic disaster if the situation was not arrested. 

The combination of crude oil theft and pipeline vandalism has become a major threat to Nigeria in meeting its revenue projections and these challenges contributed hugely to limiting the effective performance of the immediate past administration of Muhammadu Buhari, putting the economy, under the past administration in dire straits of excessive borrowing.

In the face of current dwindling revenues, paying priority attention to curbing oil theft in the country’s oil and gas industry has become both urgent and necessary.

The government of President Bola Tinubu upon assumption of office expressed zero tolerance for oil theft laying out steps to mitigate the raging twin menace of crude oil theft and pipeline vandalism. So far, the administration has taken drastic measures to confront the thieves and put an end to the criminality.

Renewed onslaught

In recent times, there have been lots of special security operations in the Niger Delta region to crack down on oil theft, moves that signal optimism that Nigeria would have access to more crude oil and revenue in the coming months. Leading this charge are the NNPCL, the security agencies and other operators.

The NNPCL early in July announced that it had through its private security contractor, intercepted a suspicious vessel with a cargo of crude oil on board. According to a statement from the company, the vessel, MT TURA II, owned by a Nigerian registered company was heading to Cameroun with the cargo on board when it was apprehended with the captain and crew members on board. The NNPCL noted that preliminary investigations revealed that the crude oil cargo was illegally sourced from a well jacket offshore Ondo State, Nigeria.

“Further investigation into the activities of the vessel at the NNPC Ltd. Command and Control Centre also revealed that the Vessel has been operating in stealth mode for the last 12 years. The last reported location of the vessel was Tin Can Port in July 2011,” the statement said.

It said details of the arrest and the outcomes of the investigations were escalated to the appropriate government authorities, upon which it was concluded to destroy the vessel to serve as a strong warning and deterrent to all those participating in such illegal activities to cease.

According to the NNPCL in a statement late July, between July 15 and July 21, 2023, 40 instances of crude oil theft were reported across the nation. 93 illicit connections had been discovered and disconnections and repairs are still being made. The NNPCL added that 69 illicit refineries were found and shut down over the time.

Additionally, 27 pipeline vandalism incidents were found and are being repaired. The NNPCL’s cooperation with security authorities allowed for the seizure of 30 vehicles and wooden boats used to carry stolen oil in the previous week. 13 vessel AIS violations, 5 oil spills, 2 unauthorized vessels, and 1 document validation were also exposed. 13 of the occurrences were found in Deep Blue Water, 41 in the Western section of the Niger Delta, 169 in the Central region, and 17 in the Eastern portion of the Niger Delta region’s oil-producing portion.

In the same vein, the Nigerian Navy on patrol recently arrested four suspects in connection with oil theft and illegal refining in Rivers State. The Navy has also recently dismantled and excavated oil equipment of a suspected oil syndicate at Well 17 of Oil Mining Lease (OML) 18 in Elem Krakama Creek, Degema Local Government Area of Rivers. The illegal oil mining activities around the area were spotted by Navy’s Patrol Helicopter on July 11, 2023, which led to the dismantling of the multiple pipelines buried in the ground.

The Nigeria Security and Civil Defense Corps (NSCDC) is strongly on the forefront against oil theft and illegal bunkering. NSCDC has begun what it termed as ‘Operation No Mercy’ on oil thieves perpetrating havoc on the nation’s economy, declaring that there would be no more hiding place for oil thieves and pipeline vandals operating illegal refining sites across the country.

The NSCDC Commandant General, Ahmed Audi, who disclosed this recently noted that his men were already combing the creeks to prevent further activities of the saboteurs, vowing to continue to make life unbearable for oil thieves in the Niger Delta and the country at large. He said the mop-up was aimed at ending the colossal damage done to the environment by activities of the oil thieves, who he said had been puncturing pipelines to obtain crude oil illegally.

The Commandant said the agency has aligned with President Bola Tinubu’s zero tolerance for oil theft, advising oil thieves to leave the country or be neutralized. He added that President Tinubu has a tough stand against oil theft, stressing that oil thieves would not have it easy with his men. The NSCDC which has in the last few weeks intensified the pressure mounted on oil thieves across the country, have recently made series of arrests of oil thieves and pipeline vandals.

The frightening numbers

The zeal currently being displayed by Nigerian security agencies to stamp out the nefarious acts of stealing the country’s crude oil can hardly be faulted, considering the humongous revenue being lost daily on account of the theft.

The Nigerian Extractive Industries Transparency Initiative (NEITI), in its 2023 report, revealed that in Nigeria 619.7 million barrels of crude oil valued at $46.16 billion (N16.25 trillion) were stolen between 2009 and 2020.

About $10 billion was lost to oil theft between January and July 2022. The Nigerian Upstream Petroleum Regulatory Service Commission (NUPRC) said N365 billion worth of crude oil was stolen between March and April 2023. In June 2023, NNPC Ltd stated that Nigeria was producing crude oil at an average of 1.2 million barrels per day, well below the OPEC quota of 1.8 million bpd. While the state oil company reported gaining N674 billion in profits, it admitted losing $150 million every two days to oil theft!

The year 2021 saw record levels of theft. NNPC reports that crude theft in 2021 reached 200,000 barrels per day a quarter of onshore production. The seriousness of the situation was underscored by the declaration of the NUPRC in March 2022 that the total value of Nigeria’s crude oil stolen between January 2021 and February 2022 was about $3.27billion. According to the upstream industry regulator, the country loses more than 115,000 barrels per day to oil theft and vandalism.

In 2019, the Natural Resource Charter revealed that the highest-ever reported crude oil theft in the world took place in Nigeria with the country recording approximately 400,000 barrels per day (bpd) crude theft. The NNRC report, which was an aftermath of a survey on oil theft in the world showed that Nigeria loses around 10 per cent of its annual budget to crude oil theft. The researchers warned that the trend could continue unabated because policies on theft were not enough to deter oil thieves.

Theft is also rampant in the downstream sector where pipeline vandals plunder refined petroleum products, frustrating distribution and leading to many deserted depots, while entrenching a trucking culture. Apart from the losses, oil vandals damage the environment; pollute the rivers, swamps and dry land and shut down fishing, farming, water and land transportation and local markets.

Collaborators

The active collusion of regulators, oil sector staff and the security forces –the Army, Navy, police, and the Nigeria Security, and Civil Defence Corps – is no longer speculative. The recent allegation by Niger Delta militant leader, Asari Dokubo, that “99 percent” of oil theft is undertaken by military officers and before that, the accusation in January 2022 by then Rivers State governor, Nyesom Wike, that security officials owned illegal refineries, is yet to be investigated.

Former Niger Delta militant leader Government Ekpemupolo, head of Tantia Security Services, also accused the Army and Navy of protecting oil thieves after it exposed 16 illegal crude tapping points in October 2022. In March 2023, the presidential special investigative panel on oil theft submitted that an unworkable security arrangement, convoluted roles of regulatory bodies, among others facilitated oil theft.

Solution options for Tinubu

Terminating the crude heist requires strong will, intelligence-led, and technology-enhanced investigations and boldness to tackle the entrenched interests and cabals within the business and security communities.

Tinubu must be decisive, creative, and strategic in harnessing the full potential of the country’s crude resources and end the prevailing culture of graft and impunity in the sector.

The recent overhaul of the security architecture, experts say was the right step in the right direction adding that to sustain the current gains on the fight against theft, Tinubu must dismantle and rebuild the NNPC, and privatise its upstream and downstream assets, while charging the new service chiefs to prioritise the war against oil thieves. Collaborators within the armed forces must be unmasked, prosecuted and forced to disgorge all their ill-gotten wealth. The current task forces assigned to the Niger Delta should be replaced, while there should be a complete shake-out of the NUPRC and the Nigerian Midstream Downstream Petroleum Regulatory Authority.

There should be closer collaboration with the communities by both government and the oil companies. The current template of community engagement where violent gangs and greedy community leaders corner cash and contracts has failed, impoverished, and alienated the locals. Rescuing Nigeria from oil vandals and thieves is an urgent task; Tinubu and the security agencies should deliver quick results.

“Without further delay, he should sweep the current management of the NNPC Ltd aside to allow for unfettered investigations and audits. The company is in urgent need of a clean broom and a new management. It has superintended for too long over losses and the blatant rape of the treasury.” According to a June 28, Punch editorial.

Other solutions lie in the Nigeria Intelligence Agency (NIA) working with the NNPC in identifying possible international markets and destinations of stolen Nigerian crude oil. The industry must end the prevailing incentives that make it possible for crude oil theft and pipeline vandalism to flourish.

The NEITI in previous reports have urged the government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities, and other creative strategies to combat the growing menace of theft of Nigeria’s crude oil and refined petroleum products.

The agency also recommended operational, security, legal and global governance instruments to combat crude theft. Other possible solutions the Tinubu government can pursue are efficient response and containment time in checking oil theft and pipeline vandalism, urgent review of the status of various security organizations currently involved in crude pipeline and product surveillance.

There should be forensic investigation into the activities of syndicates operating in the oil and gas industry, given the increasing rate of stealing and sophistication of the illicit trade.

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