By Obas Esiedesa

ATTACKS by oil thieves on Nigeria’s pipelines and facilities crashed oil production by 48.01 percent from 2.49 million barrels peak production recorded on April 17, 2020 to an all-time lowest production level of 1.29 million barrels per day recorded in the month of March, 2022.

The latest figures from the Nigerian National Petroleum Corporation, NNPC, Limited have also shown that in 2021 alone, Nigeria lost over $4.01 billion to oil thieves. Figures also showed that this year alone, about $1.5 billion has been lost to vandals.

With the price of oil at over $100 per barrel, the expected windfall that should have accrued to the country has been lost to the thieves at a time the Federation is in dire need of revenue to fund development projects. A look at production figures from 2020 to date showed a marked difference in production levels and how much of a monster the menace of crude oil theft has become. According to NNPC data, the average production in 2020 was 1.77mbpd.

Disturbing pattern emerges

It would be recalled that in 2020, the COVID-19 almost brought the world to a halt with virtually every country on lockdown. This saw the price of crude oil crashing to sub-zero levels with an unprecedented demand dip. This development resulted in zero crude oil theft in Nigeria, obviously because there was no market for the thieves to sell their stolen crude. “This saw the country recording its highest production level of 2.49mbpd on April 17, 2020” a report by NNPC stated.

The report also noted that the rate of oil theft kept rising as the price of crude oil recovered in the market “until March 2022 when there were zero recoveries from all the volumes that were pumped into the line”. The report also disclosed that another noticeable pattern in the trend of oil theft “is that it is more endemic with Joint Ventures assets and those that belong to the Independents than with Production Sharing Contracts assets. This is likely because of the nature of the JV assets which are mainly onshore or in swamp/shallow waters. This makes the evacuation pipelines more accessible than those of the PSCs which are offshore and in deep waters.

“There is also a pattern in the way the theft is carried out. This can be discerned from the size of pipes inserted on the lines and the technology deployed in carrying out the insertion. In some cases, the pipes inserted to steal crude oil from the lines are small and fitted in an amateurish way. This is an indication that those involved are small-time criminals, more likely artisanal refiners who operate the slew of illegal refineries that dot the creeks of the Niger Delta from Akwa Ibom to Rivers, and from Delta to Bayelsa.

“Some of the pipes fitted into the lines to siphon crude oil are big. In some cases, they are of the same size as the pipeline or of the size that is used at the terminal to pump crude into vessels. A close look at them would reveal that they are professionally fitted with the use of cutting-edge technology. There have been cases where riser pipes were used indicating that the criminals deployed cranes. These cases indicate that the persons involved are not the regular illegal refinery operators but sophisticated and very knowledgeable criminals with access to vessels through which they ship the stolen crude oil out of the country. The involvement of this last group is what accounts for the high volumes involved in the theft which has become an existential economic threat to the oil and gas industry and even Nigeria as a nation”. 

The report stated that on the other hand, artisanal refiners and their illegal refineries have constituted a very grave danger to the environment and people of the host communities through the heavy pollution caused by their activities. ” This is beginning to cause soot in the atmosphere and health challenges in some of those communities.

Operators react

Speaking on the menace and its impact on the Nigerian economy, the Group Managing Director/CEO of NNPC, Mele Kyari described it as a national emergency on account of the proportion, dimension and sophistication it has taken in recent times.

Kyari noted that Nigeria’s peak production of 2.49mbpd showed that the country has the capacity to produce significantly higher volumes on any normal day than it is currently doing because there was no special intervention of any kind that led to that peak production on that day.

He explained that the situation has become so bad that it got to a point where, “if you inject 239,000 barrels of crude oil into either of the Trans-Niger Pipeline or the Nembe Creek Trunk Line (these are some of the major pipelines that convey crude oil to the terminals for export), you will only receive 3,000 barrels. It got to a point where it was no longer economically sustainable to pump crude into the lines and a force majeure was declared.“In 2021, a similar trend was observed. In January of that year, out of about 239,000bpd pumped into the line, only 190,000bpd was recovered putting the loss at 19,000bpd”.

It’s an organized crime – IOCs

Speaking recently, Chairman/Managing Director of ExxonMobil, Richard Laing who represented the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce, pointed out that though the issue was not new, it has grown from just oil theft to organized criminality with the sophisticated operation.

He said: “As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly, it is a threat to investments, a threat to the health of the industry and the wealth of the nation.”

“It is important that the stakeholders integrate their activities and their thoughts. As OPTS we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective. “The language is very important and I think we use theft rather quickly. I don’t think this is theft, this is organized criminal activity. The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn’t some guy coming along and taping into a pipeline and taking container crude oil. It is organized criminality”, Laing stressed.

Security forces storm the creeks

With the twin menace of oil theft and pipeline vandalism assuming epidemic proportion, President Muhammadu Buhari gave marching orders to the Chief of Defense Staff to lead a war against the criminals With the order, the security agencies have been mobilized to flush out the criminal element and restore normalcy. With the DSS and the Navy already making some arrests.

NNPC said it has also deployed community-based security to monitor the pipelines while it is working on deploying technological tools for more effective surveillance and monitoring of the lines and facilities. The Corporation noted that while there is hope that all the measures that have been deployed so far will begin to yield results within the next two months, it pointed out that oil theft and pipeline vandalism are problems for everyone.

“Apart from the host communities that are directly affected by the environmental degradation, every citizen suffers the loss of national revenue when the government does not have enough to provide social amenities and infrastructure to improve the quality of life in the country. “It is, therefore, imperative for all Nigerians to rise up against those behind crude oil theft and pipeline vandalism with a view to stamping them out so that the oil and gas industry can yield the fullness of its benefit to the nation and the citizenry”.


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