Oil-pipeline

•‘We lost $3.5bn to crude oil theft in 2021, about 50% of what we earned’

By Omeiza Ajayi, Abuja

Former Executive Secretary of the Nigeria Extractive Industry Transparency Initiative NEITI, Mr Waziri Adio has faulted the current strategies being deployed to tackle crude oil theft, saying rather than reducing the menace, it has instead increased.

He spoke Friday on a breakfast television show on Arise TV monitored in Abuja.

History of oil theft This first time oil theft was reported was in 1988 when the then Petroleum minister said the country was losing up to $10m yearly due to oil theft. The problem has escalated since then. In 2019 when I was still in NEITI we did a report that looked at the quantum of oil theft for 10 years between 2009 and 2018 and the figures reported by the oil companies, NNPC and DPR amounted to $41.9bn for oil theft. That is something that poses a lot of risks, not just financially and environmentally but also security wise to the country. There are implications for livelihoods, health and safety in the Niger Delta.

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Inadequate measures

The challenge is that most of the attempts that have been put in place to to address this problem are inadequate and so the problem is getting worse. It is getting worse at a time when the country is in a very hard place. If the latest figures suggest that Nigeria lost 193 million barrels in 11 months in 2021, that means on the average, it was like more than 500,000 barrels per day. We have never had it this bad. The estimates had ranged between 150, 000 barrels per day to 400,000 barrels per day.

What the Rivers state government is doing is commendable but we are just scratching the surface. What we need to look at is that for you to solve a problem, you have to understand the state of play and why the status quo is inadequate. Also look at what you need to do differently.

What we have tried to do overtime is to tackle this problem by putting in place some laws. The laws are inadequate because you have laws that impose sanctions of between one hundred  naira and five hundred thousand naira and maybe the vessels that will be seized, they will pay N5 million. The penalty for the bad behaviours is very low and the enforcement and surveillance mechanisms are also very weak. The security apparatus to react to this problem is also  not clearly focused. We have tried to use either pipeline contracts given to some former militants or the JTF and the assignment we gave the JTF is largely not just to police crude oil theft but also to protect the region, cultism, insurgency and kidnapping. Also in terms of technology, we are just scratching the surface.

The point is that the problem is not new but it is getting worse because we have not done enough to address it. The kind of money that people are making from crude oil theft is so much and the way we are giving them a slap on the wrist is only encouraging them to continue with this bad behaviour.

$3.5b lost in 2021

We lost $3.5 billion dollars to crude oil theft in 2021 and the money the federal government made was about that. It was around N1.5 trillion. So, the country is bleeding. We need to revamp the security architecture along policing crude oil assets. We need to have a rapid response, a security arrangement that is completely focused on this problem. The assignment for JTF is too diffused.

Massive oil assets

By the way, this problem has also lingered because of the scope of assets that we are talking about. To put it in proper perspective, the pipeline bearing crude oil is more than 4000 kilometres, the pipeline bearing refined products is more than 5000 kilometres. We have 258 oil fields. We have more than 2000 heads and so it is something that is quiet enormous and that is why it is difficult to contain.

The second thing is that we need to leverage technology and what we are doing now in terms of surveillance is inadequate. You can use visual method, by way of flying helicopters but the thieves have mastered the period when the helicopters would come and then  they take cover. You also have the exterior one where you install devices but people can figure that out and dislodge the devices. 

We should look at how we can deploy drones and lead detection technology that immediately there is sabotage or pipeline burst, you can shut down the flow. You can also use technology for molecular finger printing so that the same kind of process that people have for blood diamonds, you can apply it to stolen crude. You also need to have a stake for the communities. Sadly, there is a lot of collusion that is going on even with our security forces and some of the operators in the sector. So, we need to have a way of factoring in the interests of the communities even though they are also victims.

Disclaimer

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