FG’s All-Inclusive War against Oil Theft

Posted by African Examiner Articles/Opinion Monday, December 23rd, 2013

By Oghenekevwe Laba

As stakeholders in the Nigerian petroleum industry decried high rate of crude oil theft and pipeline vandalism in the country, the Federal Government has embarked on all-encompassing war against the menace, which is costing the nation over N960 billion ($6 billion) annually.

The Federal Government, which had earlier warned foreign countries to desist from buying illegal crude oil from Nigeria, has, this time, taken another initiative to put a stop on the oil theft, which it said was undermining its efforts at delivering on its transformation programmes.

The Vice President, Namadi Sambo, while receiving an audience of a top level delegation from the United States Government, led by the Assistant Secretary of Defence, Ms Sharon Burke, described oil theft as a gross criminal act.

Sambo, who pointed out that the crude oil theft had made Nigeria to lose huge resources, which could have easily been used in developing schools, putting in energy and many other transformation programmes that would impact positively on the people, sought the support and partnership of the United States and other members of the international community to tackle the menace.

He disclosed that the Federal Government had put in place stringent measures to bring the nuisance to an end, revealing that the Federal Executive Council (FEC), last Wednesday, approved the development of a special laboratory for forensic on oil products in Nigeria, which would assist in tackling the problem squarely.

The United States Ambassador to Nigeria, James Entwistle, admitted that the delegation came to the country in response to a request made by President Goodluck Jonathan to President Barack Obama for assistance to tackle crude oil theft.

Entwistle, who informed that the delegation had been in Delta State and Abuja and also met with top government officials and some oil companies, said: “Based on that request, President Obama put together this delegation and instructed it to come here and see if we can help.

“We are not arrogant to think that as Americans, we can just come here and solve a problem on behalf of your country. But what we are trying to do in this delegation is to listen and learn so that we can understand Nigeria and this oil theft problem.

“Of course, there is international dimension to the problem. We want to make sure we completely understand Nigeria and the problem. We have held very good meetings including with the Vice President. We have come to understand that the more you talk to people, the more you understand the problems,” he stated.

Burke, the leader of the delegation, added: “We are very delighted to come here on behalf of President Obama. I am here with colleagues from the department of energy and the White House and the department of state and U.S. force for Africa.

“We were told to come and listen, to listen to people and understand the nature of the oil theft, revenue lose and what the problem was and we have had opportunity to speak with great range of people and we have had a great deal of ourselves.

“We have just met with the Vice President and will be returning home, digest the information we have gotten, and then report to Mr. President. We are going back to Washington. We will review our notes and discussions and then present our findings to Mr. President,” she stressed.

The Nigerian Minister of Petroleum Resources, Diezani Alison-Madueke who also attended the meeting with the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Andrew Yakubu, pointed out that crude oil theft had different dimensions, which was why the Federal Government decided to seek the assistance of US.

Alison-Madueke said: “We felt it is necessary to seek partnership with the US because it has affected our economy in several ways and the degradation that it causes as well. The US President, as you have heard, responded to that partnership.

“As you can see, a high powered delegation has come to discuss and they have been able to discuss with a number of people and everybody and entity related to this oil theft. We are very hopeful that as they go back, we will continue with the discussion and come with a very salient solution to help us push back the scourge of oil theft once and for all,” she added.

Informed gathered revealed that Jonathan had never taken the issue of oil theft lightly, as he was believed to employ all strategies to end the menace. Among his efforts towards tackling the nuisance was his charge to Extractive Industries Transparency Initiative (EITI), when its Chairperson, Ms Clare Short, visited him, to do more to support Nigeria’s efforts to stop the exportation of stolen crude oil from the country.

While specifically calling on EITI to join the Federal Government in working to ensure that refineries that receive stolen crude oil from Nigeria are identified and punished, he said: “The efforts of EITI in criminalizing ‘blood diamonds’ from African mines have helped in curtailing that illegal business. I urge you to also support Nigeria as we confront the forces stealing Nigerian crude oil.

“The theft of crude oil from Nigeria involves the collusion of foreigners and the stolen crude is refined abroad. EITI can use its mechanisms to help us track down the thieves and those who receive the stolen crude oil,” he stated.

A United Kingdom-based policy think-tank, Chatham House, however, said that oil theft in Nigeria had reached an industrial scale, noting that the country lost at least 100,000 barrels of oil per day (b/d), about five per cent of Nigeria’s total output in the first quarter of 2013, to theft from its onshore and swamp operations alone.

The Chatham House, in its 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 is not clear how much of Nigeria’s oil is stolen and exported. The best available data suggest that an average of 100,000 b/d vanished from onshore, swamp and shallow-water areas in the first quarter of 2013. This figure does not include what may happen at export terminals. It also assumes the integrity of industry numbers,” it explained.

Stakeholder Democracy Network (SDN), in its recent report, estimated 150,000 barrels of crude oil are stolen every day in Nigeria, pointing out that the vast majority of this was sold internationally, but approximately 25 per cent stays in the Niger Delta for refining and consumption.

Illegal oil refining in the region, SDN stated, came with steep economic and social costs, noting that unless the problem was better understood and key drivers of the illegal economy were analyzed, the trade could come to undermine the stability of Nigeria’s legal oil sector.

It said: “Only five years ago, billions of dollars in oil revenue were effectively locked in because of instability and crime in the Niger Delta. The United Nations Environmental Program (UNDP) Environment Assessment of Ogoniland highlighted that in addition to poor pipeline maintenance by international oil companies, illegal oil refining in the Niger Delta is a major cause of environmental degradation.

“The whole communities have lost their traditional livelihoods as fisherman and farmers, as the effects of illegal refining, compounded by equipment failure, pollute their water and land. The refining process may also pose serious health risks.

“The dangers notwithstanding, organised theft of crude oil and the illegal refining business it feeds also support the families, small businesses and social aspirations of many Niger Delta communities,” it explained.

Sequel to this, the Federal Government, it was learnt, promised not to relent on its war against oil theft, as it had directed the Joint Task Force in the Niger Delta, which charged with patrolling onshore oil fields, to not only destroy the illegal refineries, but also clamp down on the perpetrators of the menace.

Only last week, JTF, according to its spokesman, Lt.-Col. Onyema Nwachukwu, arrested 29 alleged oil thieves and destroyed 127 illegal refineries in the Niger Delta, explaining that in Bayelsa State, troops of 343 Regiment of the JTF in Southern Ijaw Local Government Area, clamped down on 98 illegal crude oil distillation sites, which were operating with 119 illegal distillation tanks and 37 large open wooden boats (Cotonou boats) laden with stolen crude oil and illegally-distilled Automated Gas Oil (AGO).

Nwachukwu added that troops of 29 Battalion and the Gun Boat Patrol Company, in a separate operation, arrested a barge with three crew members and a vessel christened MT Tora Eagle with 11 crew members in Bodo waterways and Akassa creek in Rivers and Bayelsa states respectively.

He said: “The barge was intercepted while conveying some quantity of illegally sourced crude oil, while the vessel was laden with 3,600 drums of stolen petroleum product. The troops also scuttled five illegal crude oil distillation sites and 10 Cotonou boats filled with stolen crude oil along Lewe, Bodo, Elem Sagangama, Oluwasiri and Bodo West in Rivers State.”

He said that JTF’s Operation Pulo Shield, 19 and 3 Battalions’ troops covering Edo and Delta states scuttled 24 illegal oil distillation camps and 73 Cotonou boats. Thirty-one of such boats were intercepted at an illegal crude oil loading point close to an abandoned oil well in Warri North, while 27 of the arrested boats were intercepted in Egara creek along NNPC pipeline in Warri South Local Government Area.

Nwachukwu added: “The operation also swept through Ajide, Lagos; Makara, Egwu Aghara watersides in Warri-North, Warri North-West, Warri South West and Ethiope West Local Government areas of Delta, where oil stealing was also found to be thriving.

“The outfit intercepted 61 pieces of 75 HP speed boats and a truck laden with 33,000 litres of AGO while they were still lifting the stolen products. 502 drums, 22 steel tanks, four plastic surface tanks, 77 metal drums laden with stolen crude oil and illegally distilled AGO and four pumping machines used by the oil thieves were also seized during the operations,” he stressed.

The Federal Government, also in its comprehensive efforts against this ugly development, had approved N15 billion every year to combat vandalism of oil facilities and oil theft in the Niger Delta region.

The government, at the National Economic Council (NEC) meeting, said the amount for funding of security operation against oil theft would be sourced through a tripartite arrangement, which would involve the federal and state governments as well as the international oil companies.

Governor of Anambra State, Mr. Peter Obi, after the NEC, the decision to equip security operatives was taken, following an updated report from the committee on the criminal incidence of crude oil theft in the Niger Delta Region chaired by Governor of Delta state, Emmanuel Uduaghan.

Obi, who noted that NEC approved the provision of the required fund as logistics to support the security agencies to achieve their obligation of arresting crude oil theft in the country, added that the Federal Government had made substantial progress in tackling crude oil theft in the region, leading to substantial improvement in crude oil production level improved.

He said: “The security agencies are professionals, well trained Nigerians and some of whom are laying their lives for you and I to get revenue. If you know some of the activities that go on in the Niger Delta area, you will commend them.

“Now the oil production as at today is 2.4 million barrels per day, but there was a time it went down as low as 1.7 million barrels per day. Most of the oil are allowed to be spilled into the ocean when the pipelines are vandalised. The activities of vandals also have led to stoppage in production activities.

“Most of the oil is not stolen. When you vandalise the lines they cannot produce. When the lines are broken, if you try to pump, you pump into the sea, oil companies will not produce under that condition.

“Once you cannot produce you cannot sell it. But a lot of repairs have been made and we are making sure that the level, which we are now, is sustained. That is why the facilities that are needed have been approved. We are going spend about N15 billion over the year and that is what we lose in just few days,” he stressed.

The House of Representatives has assured that it would act speedily to ensure the passage of the Petroleum Industry Bill (PIB) in order to address the crime, warning that the House would no longer condone this act of sabotage.

The Speaker of the House of Representatives, Hon Aminu Waziri Tambuwal, lamented that a total of 350,000 barrels per day was lost to illegal bunkering in 2012, representing an increase of 45 per cent over the figure of 2011, and 67per cent over that of 2010, stating that the trend for 2013 was even more alarming.

Tambuwal pointed out that the phenomenon of oil theft and its global support system had continued to remain a clog in the wheel of Nigeria’s high economic growth trajectory, lamenting that efforts made at combating the menace locally could not yield much result because of the international slant of the crime.

He said: “No country can endure such blatant rape of its resources by a few criminals who seem to grow bolder by the day and no self-respecting parliament can watch this kind of gross sabotage and not intervene.

“We must therefore end the kind of impunity that makes people think that our nation is a lawless place where people can get away with anything. We are here to prove that this nation has the ability to make things right and to make people pay for their crimes.

“We cannot begin to quantify the full economic and political damage that the activities of oil vandals have caused. For a nation that needs all the resources it can get to take care of its growing population of angry poor youth, this kind of rapacious theft of the commonwealth is nothing short of a disaster.

“So long as we allow these oil bunkerers to remain in business, so long will our people go without the basic needs of life. Since oil is our main source of wealth as a nation, we must do everything possible to defend the integrity of the process of oil production and sale in the international market.

“We need to put in place the right kind of legislation to improve the monitoring of on-shore and off-shore areas in order to discourage vandalism. We need to establish a robust regulatory framework to plug all loopholes through which all sorts of official and unofficial corruptions thrive in the oil sector,” he stressed.

Oghenekevwe Laba is a Lagos based journalist

 

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