This is a time when oil producing nations enjoy unprecedented economic boom. This time around, the oil price bonanza is powered by the war between Ukraine and Russia. But, from this oil boom, we Nigerians are gaining nothing unlike in the past when we had more patriotic management of national assets and facilities!
Our gaining nothing is simply because of theft, huge theft. This kind of theft is hard to understand or to describe. It is more of heist than theft because the word theft cannot convey the level of brigandage involved.
This oil theft has done so much damage to the country. It has put Nigeria in dire straits. The cost to the economy is huge. The cost to the wellbeing of the citizenry is horrendous.
The federal government recently decried that the huge crude oil theft is resulting in substantial losses in legitimate production and national income. The minister of state for petroleum resources,
Timipre Sylva, disclosed this, when he visited the Imo State governor, Hope Uzodimma, at the Government House, Owerri. He lamented that hoodlums who perpetrate the act has caused the reduction of production level by 400,000 barrels per day (bpd), translating to a drop from 1.8 million to 1.4 million bpd.
This theft represents a theft of about 25%. So, the thieves take 25% leaving 200million Nigerians to survive on the remaining 75%. Now, one can only wonder how this humongous volume of crude is stolen day in day out without any real person being caught. This is the very foundation of the dire straits in which the nation has found itself. The various oil MDAs cannot be exonerated at all. How can they be. As one man said, oil is not sweet that you put in your pocket and walk away. For super tankers to enter into your territorial waters, load, sail out without being caught, no one needs any intelligence to know that there is official and unofficial collusion!
That is why it is open secret that those in the corridors of power do everything possible to be involved in the oil regulation agencies.
Huge sums change hands for such juicy postings as we Nigerians have now come to call it.
But the fact remains that this huge theft has a huge toll on the Nigerian people. In other times when there was economic boom for oil producing countries, especially the Organisation of Petroleum Exporting Countries (OPEC), which Nigeria is a member, Nigerians enjoyed and felt the boom in their various homes and hamlets. Not so today. This particular oil boom has translated to no boon simply because the handlers of that industry can only be described as kleptocrats.
Nigeria is the only oil producing nation that is suffering like the rest of the world from the economic consequences of rise in oil prices! Imagine where the seller of a product is not happy that the prices of his commodities have gone up!
Who would forget the Gulf War Windfall? It was the time when Nigeria like the rest of OPEC countries made more money than expected due to the invasion of Kuwait by Iraq. At the time the country enjoyed unprecedented windfall that was sadly frittered away for which late head of state General Sani Abacha set up a panel to investigate. The panel headed by late Dr Pius Okigbo, indicted former military President, General Ibrahim Gbadamosi Babangida (rtd) over allegations of mismanagement of $12.4bn 1991 Gulf oil windfall. In the 1973 boom caused by conflict between the Arab world and Israel, Nigeria was so awash with petrodollar that the then head of state General Yakubu Gowon reportedly boasted that the country has so much money that it does not know what to do with it.
Here we are in 2022, in the midst of another oil boom and Nigeria is not part of it as a result of porous management of our crude transactions!
Only recently, the Nigerian National Petroleum Company Limited (NNPCL) disclosed that it loses 470,000 barrels per day of crude oil worth $700 million monthly to theft. It stated that security challenges have in turn affected oil production especially pipelines around Bonny terminal. Group General Manager, National Petroleum Investment Management Services (NAPMS), Bala Wunti made the disclosure during a tour of the facilities of the NNPCL. According to him, about 270 barrels that were supposed to be loaded in Bonny were no longer
feasible due to theft. He explained that the illegal siphoning of crude oil from oil facilities by criminal individuals and groups, impacted negatively on revenue to all stakeholders, adding that the quantity of oil delivered to federal oil terminals in the country has been limited by the activities of pipeline vandals. “If you’re producing 30,000 barrels a day, every month, you get 1,940 barrels. So, what it means is that you can take it to 270 every four
days, calculate it in a month; you will have seven cargos on a million barrels, that’s seven million barrels. “When you multiply seven million barrels by $100 that is $700 million lost per month, adding that about 150,000 barrels expected are deferred, we are not producing due to security challenges.
“The Shell Petroleum Company (SPDC) trunk line, TNP transnational pipeline cannot be operated and this has been like this since March the 3rd that we put in this. Just take your calculator, 150,000, it means if you want to arrive at 1 million barrels per day, it means every week as a minimum, basically for one week alone, it’s four cargo and four cargo is four million barrels. Four million barrels formula bar or $100 is $400 million. So, you can do your calculations by yourself, take whatever price you want, take this to multiply by the number of days that have been shortened since March 3rd,” he stated. He said the impact of vandal activities caused low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, increasing instability in the oil and gas market.
“Nigeria will suffer for it; the revenues are impacted, so we can only appeal to them to rein in themselves, the oil theft situation is regrettable. It’s not going on across the whole of the Niger Delta, there are trunk lines that are more impacted. I think the Bonny trunk line ranks highest,” he said.
In obvious desperation to do something about the ugly situation President Muhammadu Buhari’s government has awarded Government Ekpemupolo, better known as Tompolo, a pipeline surveillance contract.
The former militant leader was the Commander of the defunct Movement for Emancipation of Niger Delta (MEND). The deal is described as a contract renewal as Tompolo got similar deal during the Goodluck Jonathan administration. It is a reversal of the initial stance which saw the cancellation of the contract months after President Buhari assumed office. The current deal is said to worth N4.5billion monthly. It was claimed that before the cancellation of his contract, the arrangements he put in place tackled illegal bunkering and increased production quota to over two million barrels per day, but the Buhari government cancelled the contract, declared him wanted and he was later exonerated of all wrongdoings.
It was said that Buhari government has realised the need to bring him back because currently, the country is losing over 500,000 barrels per day to illegal bunkering.
The contract award has also divided opinion in Niger Delta and across the country. The federal government has however described the award as the right decision. Speaking at the 49th session of the State House Briefing at the Presidential Villa, Abuja, Mele Kyari, the chief executive officer of Nigerian National Petroleum Company Limited said the decision was necessitated by the need for Nigeria to hire private contractors to man its oil pipeline network nationwide due to massive oil theft. Mr Kyari argued that it was not the first time that individuals within the Niger Delta region were awarded contracts for pipeline surveillance.
However, despite the justification of the contract to Tompolo by the federal government, what was not lost to Nigerians and the international community is the glaring failure of the government to protect its critical infrastructure. In any case many Nigerians have noted that oil theft cannot take place without official collaborators.
This calls for the government to examine itself and identify the officials that are aiding and abetting oil theft in the country.
It is obvious that if our security agencies are doing their job effectively, the menace of oil theft could be eradicated. The government must find a way to hold the leadership of security agencies accountable for the nation’s oil pipelines protection. The outsourcing of pipeline protection to non-state actors no matter how well intentioned is not sustainable.
MAY NIGERIA REBOUND
