The recent disclosure by the National Economic Council (NEC) that Nigeria lost 22 million barrels of crude oil to oil theft in the first six months of 2019 serves as a wake-up call on the Federal Government to take decisive action against the menace. Edo State Governor and Chairman of the ad hoc committee of the NEC on crude oil theft, prevention and control, Mr. Godwin Obaseki, while speaking at a stakeholders’ meeting in Abuja, noted that the figure could double by the end of the year if no action is taken to curb the ugly trend. He enjoined stakeholders to work together to eradicate crude oil theft, as he revealed that oil theft and pipeline vandalism posed a threat to the national economy.
Also, the Nigerian National Petroleum Corporation (NNPC) Monthly Financial and Operations Report published in June revealed that Nigeria witnessed 77 per cent rise in cases of oil pipeline vandalism. The report showed that 106 pipeline points were breached, which represented an increase from the 60 points vandalized in May 2019. It has been estimated that Nigeria loses between 200,000 and 300,000 barrels of crude oil per day to oil thieves.
Not quite long ago, the Nigeria Natural Resource Charter (NNRC) on crude oil theft in the country revealed that the country lost N2.6trillion between 2016 and 2017. Similarly, a United Nations (UN) report on oil-related crimes revealed that Nigeria lost an estimated $2.8billion or N1.1 trillion in revenue in 2018. The enormity of the menace may be more than reported.
In the well-coordinated crime, petroleum pipelines are burst, from where crude oil is siphoned by criminal elements, which run dangerous syndicates and cartel. Also, these economic saboteurs divert crude oil. From illegal bunkering and oil theft, Nigeria and operators in the oil industry have lost huge resources running into billions of dollars over the years. The revenue loss has become a huge drain on national resource that would have been channeled to infrastructure development. The huge money lost to oil theft is enough to build new refineries, repair existing ones, and fix damaged pipelines. The money could also be used to adequately fund the education and health sectors.
Operators in the oil industry are equally at risk. Statistics show that they are losing as much as 40 per cent of their production to bunkering and pipeline vandalism. The loss will continue unless the government takes a decisive action against this economic sabotage. Records show that the epicenter of illegal bunkering and oil theft is in Rivers, Bayelsa and Delta states, with allegations that security operatives deployed in these oil producing states to protect oil infrastructure are aiding and abetting them. It is believed that these security personnel provide cover for the nefarious trade and in some cases directly carry out the illegal trade themselves. Not long ago, Governor Nyesom Wike of Rivers State accused a certain military official of running an illegal oil bunkering squad. However, the military authorities debunked the allegation. Before then, members of the Joint Task Force (JTF) established to protect petroleum pipelines and fight vandalism in the Niger Delta have been accused of engaging in illegal bunkering. The Ijaw National Congress (IYC) last year had pointedly accused some officials of the Nigerian Navy and members of the JTF of being part those stealing crude oil in the Niger Delta. This allegation came soon after a coalition of Niger Delta Civil Society activists and the Niger Delta Environmental Protection group protested in Abuja demanding the sack of the leadership of Operation Delta Safe (OPDS).
Many Nigerians were elated when the Federal Government came up with a plan to track every barrel of crude oil produced and exported out of Nigeria and their destinations. However, Nigerians were not told how far the government went with the initiative, which was to be implemented by the Department of Petroleum Resources (DPR) in collaboration with the Economic and Financial Crimes Commission (EFCC). The seeming inability of government to apprehend and prosecute oil thieves may have largely fueled the menace. Apart from using security agencies, government should consider the deployment of technology, especially drones, to guard the pipelines. Above all, there is urgent need to pass all aspects of the Petroleum Industry Bill (PIB) into law. Doing so will go a long way to curb the pervasive corruption in the sector.
Measures should be put in place to make oil theft and pipeline vandalism a risky venture in the country. We call on the government to put strong measures in place to stop this menace. We also urge the government to treat oil theft as a serious economic crime with far-reaching consequences. The Federal Government must investigate the weighty allegation of involvement of security agencies and others in oil bunkering and bring all those involved to book.
Failure to address illegal bunkering and crude oil theft will be of dire consequences for the economy. We should avoid a situation where operators in the oil industry will feel unprotected and declare force majure.