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Crude Oil Theft: NEITI calls for review of legislation, use of technology

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 Gov Obaseki urges FG to lease pipelines

As NNPC suffers brunt with 45, 347 pipeline vandalism incidents

Crude Oil Theft: NEITI calls for review of legislation, use of technology

By Gabriel Ewepu – Abuja

The Nigerian Extractive Industry Transparent Initiative, NEITI, Tuesday, called for a review of legislation and use of sophisticated technology in the oil and gas sector to reduce vandalism of pipelines, crude oil theft and illegal refining of crude.

This was part of the recommendations presented by the Executive Secretary, NEITI, Wazir Adio, in a document called, ‘The Inaugural NEITI Policy Dialogue with the theme, ‘Stemming Oil Theft in Nigeria’.

According to Adio crude oil theft happens in three ways. First, through vandalism and sabotage- when that happens crude oil is pilled and lost. Once that happens you have to short in production, and on the account of that it leads to secondly, Differed Production and this is different from loss when you are thinking of the first instance. The third part is outright theft.

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He further disclosed that between 2014 and 2016, NNPC lone spent N363 billion for repairs and maintenance and that was on the average per year and that is about $400 million, and that also impacts the environment including livelihoods.

He also said an estimated range 150,000 bpd to 400, 000 being daily production is lost every day, which according to him between January and June of 2019, 22 million barrels of oil were lost and that in monetary value is $1.35 billion and that is five per cent of the 2019 budget, which put together is higher than the total allocation for health, education, defense, and Agric.

He added that the issue has been lingering for some time and goes beyond 2019 and that the total losses for 10 years (2009-2018) are $41.94 billion, and this is just the least and there is the possibility of much than this.

He said: “The current legislation to punish culprits is outdated, which if convicted the fine ranges between N100 to N5000, even the ones with jail terms have option of fine, but there is one that carries death penalty on refined products and not on crude. Stakeholders should do more on legislations, security, surveillance, community engagements, and diplomatic outreach.

“Yes a lot has been done but the problem still remains and that means look at the approach taken so far and see whether this is enough.

“The scale of infrastructure is amazing makes it difficult for police. An active market for stolen crude oil and we have to think about how to tackle it. We have to look at the legislation. The cost of those who perpetrate the act is low and they are bent on carrying out the crime.

“We must leverage on technology and deploy it including fingerprinting, molecular markers, revamp security architecture, specialized force, and communities need to be served, and allow incentives to communities by equity, and also involve the global community and make them understand it is not a Nigerian problem, which we need to have a global coalition.

Meanwhile, the Governor of Edo State, Godwin Obaseki, who was Guest of Honour at the occasion, urged the federal government to consider leasing of pipelines and also transparent surveillance contracts.

“The federal government should reconsider leasing these lines for a short while because we understand what is going on from the current owners and working with them, put in place security arrangements and infrastructural development plan for these lines because these lines are quite old and need to be replaced. Haven take over these lines we should now have proper transparent surveillance contracts”, Obaseki said.

However, he said the issue of crude oil theft is not a problem that can be eliminated in a hurry but must be tackled, hence the task is a collective responsibility.

He also urged governors in the Niger Delta region to properly utilize the 13 per cent derivation from the federal government to develop their states and give the people a sense of belonging.

The Minister of State, Petroleum, Timipre Sylva, represented by his Special Adviser, Felix Nabena, said in a goodwill message, said that “It is in the light of the above we welcome and identify with NEITI policy dialogue on combating crude oil theft in Nigeria. The recent NEITI study and report on crude oil theft between 2009 and 2018 reveal a whooping sum of $41.9 billion worth of crude may have been stolen in the past 10 years.

READ ALSO: NEITI indicts NPDC, PanOcean, 7 others for $594m royalty underpayment

“This calls for serious concern. Consequently, we must continue to review current efforts, law, solutions and some of them contained in the NIETI report. I, therefore, charge all stakeholders to reflect over this challenge persistently before us, the NEITI report and its recommendations.

Also in a goodwill message, the Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mele Kolo Kyari, represented by the Chief Operating Officer, Upstream, Roland Ewubare, disclosed that the Corporation has bear the brunt of crude oil theft, recording between 2001 and 2019 half-year a total of 45, 347 pipeline breaks on its downstream pipeline network.

“Sadly, today crude oil theft has become a major threat and that threat actually affects our economy in terms of our ability to meet our revenue projections and scale.

“NNPC as a player on the downstream side has felt the direct brunt of many attacks on our facilities and assets. Between 2001 and 2019 half year we recorded a total of 45, 347 pipeline breaks on our downstream pipeline network. It comes with an average of seven incidents on a daily basis.

“There is also environmental degradation caused by theft and pipeline vandalism and the environmental impact witnessed in communities is directly linked with this”, Ewubare said.

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