BY: IFEANYI IZEZE
Godwin Obaseki, the Governor of Edo State, who is also the Chairman of
the Ad-hoc Committee of the National Economic Council on Crude Oil
Theft, Prevention and Control, revisited the menace of crude oil theft
in the country by painting a dire picture of the problem when he
recently in Abuja stated that in the first six months of 2019, the
nation lost about 22 million barrels of its produced crude oil to oil
theft. He said “if nothing was done to curtail the ugly trend, the
figure could double by the end of the year.”
Those who know would agree that the 22 million barrels loss in six
months posited by NNPC and the Edo state governor was a very
conservative estimate as the menace is far worse than that.
Nigeria’s current official production figure is somewhere between 1.7
and 1.85 million barrels per day while it has confirmed capacity to
comfortably produce over 2.5 million bpd. This gap is one of the areas
to keenly watch if we are serious about solving this problem of crude
oil stealing. Are the multinationals producing more than what they tell
us since the capacity to go beyond the figure they usually dangle at us
exists in the various oilfields owned/operated by these companies?
Let nobody come with the trash of “does the Department of Petroleum
Resources (DPR) not supervise production and loading activities of the
foreign operators” because I have a working knowledge of how the
supposed supervision is done.
With over 90 percent of the stolen oil exported and the balance of less
than 10 percent allegedly processed locally at the artisanal refineries
spread across the Niger Delta region, the federal government should know
for certain where this problem lies. Whether anybody wants to hear this
or not, the pockets of persons arrested from those “kpofire”
locations in the Niger Delta have only token-effect in combating the
scourge. Their own nuisance is more in causing environmental
devastation some of which may be irreversible.
It has been established that less that 2 percent of the produced crude
oil stolen from facilities in the Niger Delta are taken from flowlines
between wellheads and the flowstations. Then between the flowstations
and the export terminals, about 8 percent or less is sucked by thieves.
So could this be where the problem lies?
It should actually bother our government that no two agencies in the
management of the nation’s oil business have the same figures on our
oil production. Should it be so? Various audit reports have shown that
there are often conflicting data submitted by the different stakeholders
involved in the core areas in the oil industry – like in the
production, lifting and refinery deliveries. Some people would say we
produce 1.8 million barrels per day, some other will say we do 1.9 while
another set would give you 2.2 mbpd as our output. These are prime areas
where a lot of manipulations take place to deliberately short-change
Nigeria in the sharing of produced joint venture crude.
For whatever reasons by both the NNPC and its joint venture partners,
produced crude oil is not measured at the wellheads or flowstations but
only at the export terminals. And this is where the bigger problem lies.
There are footprints everywhere to show that the foreign multinational
oil companies are defrauding Nigeria in their handling of crude oil
produced within our oilfields. The cases filed against the Nigerian
subsidiaries of U.S. multinational oil corporations including Chevron,
the Anglo-Dutch concern, Shell, Italian ENI’s Nigerian Agip,
France’s Total and Brasoil of Brazilian Petrobas are just sample
prototypes of what these companies are doing to deny Nigeria of its
supposed earnings from oil produced in the country.
As said in the documents tendered at the High Court in Lagos, “some
shiploads registered less when they left Nigeria and more on reaching
the United States, while some entire shiploads were undeclared in
Nigeria.” The U.S.-based ImportGenius database was used by attorneys
to confirm declarations made to U.S. customs by shippers and importers.
Now, following series of investigations undertaken by this consortium,
it was established as suspected, that the crude oil declared to have
been exported from Nigeria between January 2011 and December 2014, was
less than what was declared to have been imported into the United States
of America, a country that maintains detailed records and has stricter
compliance measures.
Most times, what oil tankers declare they load at Nigerian ports is far
lower than what the vessels discharge on arrival at ports in the USA.
These were facts established by the Nigerian government-commissioned
team of experts. And as explained by the federal government’s legal
team in its deputations, the significant crude oil theft for which due
payment is being sought by the nation, takes the form of accounting
fraud, non-declaration or under-declaration of crude and gas cargoes.
Just imagine what this country would have lost over the years to these
dubious business practices of the foreign multinational oil operators
who come from countries that lecture us every day on integrity and
transparency in business transactions?
Tragically, as has become the manner of our judges and their courts, the
case was deliberately dismissed for want of evidence. What other
evidence does the High want apart from the available ones that showed
that some cargoes that landed in the USA were not even declared in
Nigeria at all while some had far more volume discharged at the
destination than was said to have been loaded at our export terminals?
On several posits on the menace of crude oil theft in the Niger Delta,
this writer had insisted that if the magnitude of crude oil stealing as
reported were to be true, then there couldn’t have been anyway such
fleecing could occur without the collusion and/or participation of some
major producers in the country and international oil tankers that lift
Nigeria’s crude on behalf of the IOCs and the NNPC.
All these years, these same oil companies have blamed Niger Delta oil
thieves for the spate of pipeline breaches and crude oil theft in the
region when in actual fact the companies may have been covertly
encouraging the “local thieves” to take some oil so that the
companies can hide under that to siphon as much volume of crude as they
can to their various countries/markets.
Most Nigerians particularly the government people may not be aware that
the nation’s offshore arena is littered with tens of mega
floating-production and storage platforms bleeding some of the
nation’s most prolific wells and fields and yet these facilities are
either poorly monitored or even unmonitored at all. Don’t ask me how I
know because I worked in some of those facilities as a geologist and
environmental auditor.
Let’s even look at recent pronouncements by Shell, Chevron, and Agip
on magnitude of loss each suffers everyday: The problem of crude oil
tapping by thieves, as we were told, is localised on facilities on land
and swamp areas. It is a near impossibility to steal crude oil from
either wellheads or flowlines in offshore arena without being spotted
right on arrival.
Chevron in Delta is majorly an offshore producer (near shore and deep
offshore). So majority of the company’s loses to thieves and vandals
take place of the Chanoni Creek flowlines. Shell and Agip’s loses due
to tapping from their facilities occur onshore- land and swamp terrains.
Question: what is the daily average of Shell and Agip’s combined
onshore production that thieves can suck away over 300, 000 barrels
every day as recently declared by the NNPC and some top officials of
these foreign operating companies?
To say that NNPC as the outstretched arm of the federal government in
the nation’s oil business is thus far a big disgrace is an
understatement whether they want to hear it or not. The nation’s apex
oil concern carries on its business as if they represent the interest of
the foreign operators more than the interest of Nigeria.
The Department of Petroleum Resources, the handicapped police, is even
worse than the NNPC though theirs seemed to be deliberately caused by
people in government to ensure the department is permanently disabled.
My take is that whatever new effort against oil theft planned by the
federal government will require the maximum co-operation of the
international community, especially countries like the Netherlands,
Italy, USA, China, Spain etc which are major stakeholders in the global
oil industry and some of the destinations for oil stolen from Nigeria.
Anything short of that is merely dancing around the problem. God bless
Nigeria!
(IFEANYI IZEZE LIVES IN ABUJA: IIZEZE@YAHOO.COM; 234-8033043009)