*Oil thieves have continued to have a field day in Nigeria, rocking the nation’s main source of revenue undaunted by the existing penalties
The theft of crude oil and petroleum products has increased in recent months in the country, with the Nigeria Extractive Industries Transparency Initiative describing the current penalties against the perpetrators as insufficient.
Last week, NEITI disclosed that the country lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products valued at $40.06bn and $1.84bn, respectively from 2009 to 2018.
“This is the size of Nigeria’s entire foreign reserves. On average, Nigeria lost $11.47m daily, $349m monthly, and $4.2bn every year for the past 10 years,” it said.
In late August 2019, the Ad hoc Committee of the National Economic Council on Crude Oil Theft, Prevention and Control revealed that the country lost about 22 million barrels of its crude oil production to oil theft in the first half of the year.
The Governor of Edo State, Godwin Obaseki, who is the chairman of the committee, said if nothing was done to curtail the ugly trend, the figure could double by the end of the year.
Few days after, one of the international oil companies operating in the country, Shell Petroleum Development Company of Nigeria Limited, said it was losing about 10,000bpd from its pipelines to crude oil theft.
The oil major cried out for help from government, communities and other stakeholders to stem the incessant attack on oil assets in the Niger Delta.
“These are critical national assets with 55 per cent government interest and they produce the crude oil that accounts for over 90 per cent of Nigeria’s foreign exchange and the bulk of government revenue. Hurting these assets means hurting the nation’s revenue, the economy of the states, the health of the people and the environment,” the SPDC’s General Manager External Relations, Igo Weli, said.
Weli said that since 2012, the SPDC had removed more than 1,160 illegal theft points on its joint venture pipelines in the Niger Delta.
2,092 pipeline points vandalised in one year –NNPC
The Nigerian National Petroleum Corporation, in its latest monthly report, said a total of 228 pipeline points were vandalised in July, representing an increase of 115 per cent from the 106 points vandalised in June.
“Products theft and vandalism have continued to destroy value and put the NNPC at a disadvantaged competitive position. A total of 2,092 vandalised points has been recorded between July 2018 and July 2019,” the corporation said.
The Asset Management Team for Oil Mining Lease 26, in October, said its pipelines had come under attacks by oil thieves in recent months.
It said about 450,000 barrels of crude oil was stolen between June and September this year from the oil block, which is jointly owned by the Nigerian Petroleum Development Company and First Hydrocarbon Nigeria Limited.
The NPDC, an upstream subsidiary of the Nigerian National Petroleum Company, owns 55 per cent stake in OML 26 while FHN, a privately owned firm, has 45 per cent equity in the asset.
The Manager, Government, Security and Community Affairs, NPDC/FHN OML 26 Asset Management Team, Mr Blessing Ogbowo, said crude oil was being stolen from the pipeline and taken to illegal refineries located in the forest.
“This high level of stealing started in June… Until the federal and state governments come to our rescue, we may not be able to fight this fight all by ourselves,” he added.
The NNPC and the Nigerian Navy pledged on September 4 to deepen collaboration to tackle the menace of crude oil theft and attacks on oil and gas facilities.
The two organisations came to the resolution when the NNPC Group Managing Director, Mele Kyari paid a courtesy visit to the Chief of Naval Staff, Vice Admiral Ibok-Ekwe Ibas at the Naval Headquarters, the NNPC said in a statement.
Ibas was quoted as saying that the Navy had over 130 impounded vessels, some of which were laden with stolen crude oil and petroleum products, stressing that it would live up to its mandate and work towards ending all forms of criminality in the nation’s territorial waters.
Surveillance cameras to the rescue?
On September 16, the SPDC said it had deployed state-of-the-art high definition cameras for quick detection of and response to crude oil spills from its facilities.
The oil major said the cameras, attached to specialised helicopters carrying out daily overflight over its facilities, would also help in tracking vandalism of its joint venture assets.
It said it had implemented anti-theft protection mechanisms on key infrastructure, such as wellheads and manifolds to stem constant attacks from vandals and thereby prevent and minimise sabotage-related spills.
“We are burdened by the continuous increase in cases of sabotage and theft. Oil spills due to theft and sabotage of facilities as well as illegal refining, cause the most environmental damage from oil and gas operations in the Niger Delta,” SPDC’s General Manager, Safety and Environment, Chidube Nnene-Anochie, was quoted as saying a workshop.
A few companies have adopted the visual method by deploying helicopters fitted with surveillance cameras to patrol their pipelines, NEITI noted.
“However, the scale of current losses clearly shows that these measures are not sufficient nor effective to contain the problem of theft and vandalism. Therefore, the companies, in collaboration with industry regulators, should take advantage of current technology designed to swiftly detect, localise and cut off flows to specific pipelines as soon as leaks or breaches occur,” it said.
‘Existing laws need to be reviewed’
NEITI, in its latest policy brief, said a review of some of the laws on crude theft “shows that provisions on sanctions do not provide sufficient deterrence.”
According to the agency, there are at least six legal codes dating back to 1975 that provide punishment for these crimes, and some of the laws were found to be outdated.
It said the provisions of sanctions in the Economic and Financial Crimes Commission Act “are relatively less weak but manifestly inadequate.”
NEITI said, “Such laws, as the ones which prescribe fines of N100 to N5,000 and prison terms of six months to 12 months, have little or no effect on an activity that offers huge payouts for perpetrators.
“The result is that most of the cases are currently being prosecuted under the EFCC Act, which has the strongest provisions for sanctions. We reviewed a sample of 25 crude theft convictions secured by the Economic and Financial Crimes Commission involving 103 individuals, six companies and one vessel.”
According to NEITI, 35 of the accused were sentenced to two years in prison with an option of fine between N50,000 and N100,000; six individuals were sentenced to one year with option of fine between N100,000 and N1m; 59 were simply fined N100,000; and two were fined N50,000 and N500,000 respectively.
It said, “Only one person was sentenced to one year in prison without option of fine. Three companies were fined N500,000 while three others were fined N1m. One vessel was fined N5m.
“These sanctions are clearly not sufficient to produce deterrence and the cases only address a small aspect of crude theft. Firstly, out of 103 individuals convicted, only two (less than two percent) are likely to serve compulsory jail term of one year, and even this cannot be sufficient deterrence.
“Secondly, all the accused were convicted for possession and sale of illegally refined petroleum products. None of the cases pertain to direct theft of crude oil, most of which is sold in the international market.”
NEITI recommended that the National Assembly should review, update, harmonise and strengthen existing laws with stiffer sanctions to provide stronger deterrence.
“The Federal Government should expressly mandate law enforcement and anti-corruption agencies to prosecute more cases of crude theft. They should be evaluated on their ability to arrest and prosecute cases of crude oil theft,” it added.
SOURCE: punchng.com
