An increase of pipeline vandalism and oil theft in the last four years has cost Nigeria an estimated daily loss of hundreds of thousands of barrels of crude oil and much more unspecified quantities of refined petroleum products.
According to reports from the Nigerian National Petroleum Corporation (NNPC) and the Nigeria Extractive Industries Transparency Initiative (NEITI), it was disclosed that the country may have lost a staggering sum of N8.6 trillion in the last four years to the criminal activities of pipeline vandals in the industry.
On the average, N2.4 trillion was stolen every year since 2012. Coming as sources close to the management of NEITI said due to poor record keeping at the NNPC and other relevant authorities in Nigeria, it has become almost impossible to get data on the loses at the snap of the fingers, but a former Managing Director of NNPC, Mr. Andrew Yakubu, put the yearly loss of revenue at $12 billion (about N2.4 trillion) yearly.
On her part, the former Minister of Finance, Dr. Ngozi Okonjo-Iweala, at a time, put the quantity of crude oil lost daily at 400,000 barrels per day while one of the Joint Venture Operators estimated the loss to be between 150,000 and 180,000 barrels per day.
The crude oil stolen from broached pipelines and illegally refined products are regularly smuggled out and sold on the lucrative black market. Meanwhile, NNPC in its latest annual statistical bulletin said it recorded 3,700 cases of petroleum products pipeline broaching in 2014 alone, leading to $300 million annual revenue loss.
According to the NNPC, incidents of pipeline vandalism rose by 4.54 per cent in 2014, compared to the situation in the preceding year. “A total of 3,732 line breaks was reported on NNPC pipelines out of which 3,700 was as a result of vandalism, while 32 cases were due to system deterioration,” it said.
Major oil operators, including Anglo-Dutch oil giant, Shell, have blamed repeated oil thefts and sabotage of key pipelines as the major cause of spills and pollution in the southern oil-producing region.
Beyond the economic loss, Minister of State for Petroleum and Group Managing Director, NNPC, Dr Ibe Kachikwu said the incidents of pipeline vandalism have also claimed a huge number of human lives.
According to him, in the last three years, a total of 350 persons including NNPC staff, police officers, community members have been killed as a result of the activities of the oil thieves.
He said, however, that the ugly trend of oil theft and economic sabotage in the oil sector has reduced since he came on board as the new GMD NNPC.
Although the present management of the NNPC is doing much with its partnership with security agencies to curb the activities of illegal bunkering, oil theft and pipeline vandalism, the Acting Executive Secretary of NEITI, Dr Ogbonnaya Orji believes that the upsurge of oil theft requires multilateral and concerted efforts to address the problem.
He said all stakeholders in the oil industry; extractive companies, government, civil society organisations, host communities and security forces should be involved in resolving the menace.
The NNPC GMD agreed with the proposition for community policing, adding that beyond the increase in the presence of military personnel in the area, the ultimate security for the critical oil and gas assets lies squarely with the host communities.
“The best security for these pipelines lies with the communities,” Kachikwu said, adding, “We are trying to create enough incentives for them to see these pipelines as their own.”
With the recent two recent pipeline explosions in the Gbaramtun area of Delta State and Orukari, Golubokiri and Kpongbokiri communities of Brass, Bayelsa State, however, it is feared that the Federal Government may not be favourably considering the suggestions of Kachukwu and Ogbonnaya. According to a former militant leader ‘General’ Ramsey Mukoro, another agitation is coming.
He told Bloomberg that the militants are frustrated by President Muhammadu Buhari’s decision to cut the multi-million dollar contracts given to former commanders to guard the pipelines they once attacked.
Also, it was alleged that the government plans to slash financing to the amnesty programme by half this year to about $100 million and scrap it all together next year. Under the agreement, about 30,000 fighters have been receiving training and a N65, 000 monthly allowances.
They’re frustrated too by the decision of the Economic and Financial Crimes Commission (EFCC) to charge one of the most powerful former commanders, High Chief Government Ekpemupolo (aka Tompolo), with money laundering and colluding with the officials Nigerian Maritime Administration and Safety Agency (NIMASA) to divert N34 billion of government funds.
“The prosecution against Tompolo, our leader, is unfair and we will not take it,” Mukoro said. “The Federal Government should be mindful of what they are doing.”
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