WHEN WILL NIGERIA STOP THE CRUDE OIL THEFT?

Nigerians are perplexed at the spate at which crude oil theft is being carried out with impunity in Nigeria’s oil-rich Niger Delta. The government must act now and very swiftly too, to avoid the ugly situation where it is being overpowered by the cartel responsible for this.

It will be recalled that this situation is similar to what happened in one of the Latin American countries some years back when drug cartels took over the mantle of leadership. If these cartels are sufficiently empowered financially they could create tension in the land with their ill-gotten money.

Already, the allocations to state government are not being paid on time. This, with its attendant consequences, could result in government’s failure to meet its obligation.

A network of barges feed tankers anchored offshore before oil is loaded in mother ships under the cover of the night.

The Federal Government had put in place joint security force comprising the navy and other military outfits but they seem ineffective or overwhelmed by the length of the coast line their operation covers.

At a recent media chat, the President Goodluck Jonathan claimed that the government is winning the battle against oil theft. To oil and gas industry insiders however, that claim was a political statement as that is not the true position on ground.

In a report by Chatham House released last week, the report showed that the country lost at least 100,000 barrels of oil per day (b/d), about five percent of Nigeria’s total output in the first quarter of 2013, to theft from its onshore and swamp operations alone.

The Chatham House report said, “Some of what is stolen is exported. Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria, polluting markets and financial institutions overseas, and creating reputational, political and legal hazards. It could also compromise parts of the legitimate oil business.”

It added that officials outside Nigeria were aware that the problem existed, and occasionally showed some interest at high policy levels, “but Nigeria’s trade and diplomatic partners have taken no real action, and no stakeholder group inside the country has a record of sustained and serious engagement with the issue.”

The resulting lack of good intelligence means international actors cannot fully assess whether Nigerian oil theft harms their interests, it stated.

It is for this reasons that some of the companies are divesting their assets in onshore and are moving offshore.

This trade is worth between $3-$8 billion according to industry analysts. Most of the oil is stolen among muddy creeks and swamps in the Niger Delta.

Recent Shell Petroleum Development Company (SPDC) raises alarm over increased crude oil theft resulting in 300,000 barrels shut in from two key pipelines. Consequently, this led to force majeure declared on Bonny light exports.

Force majeure has been declared on Bonny Light exports effective October 10 due to production deferment from leaks observed on the Trans Niger Pipeline (TNP) at B-Dere, Nonwa – Tai and Bodo West.

An investigation visit conducted which comprised regulators, Shell and members of the community discovered that the spill at B-Dere was caused by unknown persons who drilled holes on the line.

Similar investigation visits are being organised for Nonwa – Tai and Bodo West.

The entire TNP system, comprising the 24-inch and 28-inch has been closed down at least five times since early July this year due to multiple leaks from crude theft connections.

The downstream section of Nembe Creek Trunkline (NCTL) between San Barth and Bonny was reopened on August 6 after the removal of 60 crude theft points, but was shut again in September with the discovery of seven additional connections. Repair of the line is progressing.

A total of 189 crude theft points have been repaired on the TNP and NCTL between January and September this year.

According to Mutiu Sunmonu, SPDC managing director and country chair, Shell Companies in Nigeria, “We’re dealing with a social tragedy, an environmental crisis and a sad waste of resources. We find it difficult to safely operate our pipelines without having to shut them down frequently to prevent leaks from illegal connections impacting the environment. Ironically, it appears the crude thieves use repair windows to prepare and quickly launch fresh illegal connections when we restart production.

“While SPDC continues to play its part in combating crude oil theft by amongst other things, increasing surveillance of pipelines and organising daily helicopter over-flights of pipeline routes, the experience of the past few months requires more concerted efforts by all stakeholders, including government and communities, to address what is turning out to be a dangerous development in the Niger Delta.”

By: OLUSOLA BELLO