Nigeria: Crude Theft – Oil Workers Plan Shutdown of Sector

Key unions in Nigeria’s oil and gas industry are putting together a major nationwide action to protest exponential oil theft in the country.

LEADERSHIP can exclusively report that a major mobilisation towards this action is at an advanced stage following their resolve to expose those behind the crime.

Escalating oil theft by criminals has been described as a bleeding wound that is eating up resources of the country, with industry operators calling for declaration of emergency in the oil and gas sector to halt the menace.

Several figures are in the public space showing the level of theft that had occurred at different periods.

Recently, security agents operating across the country reported the recovery of stolen crude oil valued N86.2 billion in August alone.

Also, a total of 16, 000 litres of diesel valued at N800/litre (N12.8m) were reported to have been recovered by members of the Nigeria Security and Civil Defence Corps (NSCDC) in Cross River.

Confirming the situation, Minister of State for Petroleum Resources, Dr Timipre Sylva, said that the country loses 400,000 barrels of crude daily via oil theft.

He described the development as a “national emergency” and lamented that the nation had fallen short of OPEC daily quota, from 1.8 million barrels to 1.4 million barrels, due to crude theft.

He warned that such huge economic loss was capable of crippling the nation’s economy if not accorded the seriousness it deserved.

He expressed concern that the menace had persisted, in spite of the efforts by the federal and state governments to arrest it.

Sylva said the problem of crude theft could not be handled by the federal government alone as it is a national emergency because the theft had reached a very bad crescendo.

“This is because the thefts are taking place in the communities that host the oil pipelines. As a result, it has become necessary to involve the stakeholders, especially the host communities,” he said.

LEADERSHIP’s investigation shows that oil theft is orchestrated by an organised syndicate allegedly backed by security personnel specifically assigned to man key export infrastructure and pipelines.

A top industry operator who confided in our correspondent said some soldiers posted to a key export line in Port Harcourt openly threatened to kill their new commander who made an attempt to carry out changes of those assigned to guard the asset.

The workers’ unions have said that unless the government takes decisive steps and invests in artificial intelligence to contain the menace, the best option is to shut the industry until sanity is restored to the system.

National president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, while responding to our correspondent’s enquiry into the plan, said time had come for the government to declare emergency in the sector.

On the planned action, Osifo said PENGASSAN was planning to engage other stakeholders, and that the media would be informed if any mass action would be carried out.

” Well, I don’t want to speak on any plan because we will soon address a press conference on this issue, but I don’t want to preempt anything. All I can say is that there is an organised cartel involved in this theft and there is need for an industry-wide engagement,” he said.

He said because the crime had become a well-coordinated theft with some security agents compromising their responsibilities, a shift towards investing in artificial intelligence would be a major consideration of government going forward.

The chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, who shared similar data, disclosed that the country loses an average of 200,000 barrels of crude per day to oil thieves, translating to 73 million barrels in a year.

Using an average crude oil price of $100 per barrel, Nigeria is losing over $7.3 billion in a year, or in five years (between 2016 and 2020) an estimated $14.65 billion considering the cost of oil per barrel at the years under review.

The amount, when converted using the official N416.25 to dollar exchange rate, translates to N3.038trn loss in a year.

Also, data from the latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) on Oil and Gas Industry showed that 272.2 million barrels (mmbbls) of crude were lost to oil theft and other forms of criminalities in Nigeria’s midstream sector.

Kyari said on Thursday in Lagos that the exponential growth in the oil and gas industry theft had shortened the country’s production output.

Also speaking at an oil and gas event in Lagos on Thursday, the Commission chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Gbenga Komolafe, said the agency had developed a roadmap for tackling the security challenges in the industry.

Komolafe said NUPRC had identified and was working towards implementing areas of collaboration between the government and operators and ensuring that operators realize their full production potential.

Under the plan, the Commission is liaising with the top echelon of Nigeria’s security forces for a robust security framework that ensures Government Security Forces (GSF) provide pipeline and assets security.

The plan will promote the implementation of Nodal surveillance technologies on the main trunk lines at each manifold for real-time loss detection that will enable swift and more proactive responses.

It will also enforce installation of tamper detection technologies as part of designs for pipeline and related oil and gas production facilities for approval of the Commission as well as ensure that operators implement approved security protocols in areas within their control and promptly identify/ remove illegal connections and conduct remedial works in record time.

As part of the strategy, there will be a massive public enlightenment campaign to educate citizens on the dangers associated with crude oil theft and pipeline vandalism, in collaboration with relevant agencies such as the National Orientation Agency

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