The Vice President, Prof. Yemi Osinbajo, on Tuesday, tasked stakeholders in the oil and gas industry to come out with recommendations and solutions that would address oil theft and boost production in the country.
Osinbajo indicated this in Abuja while addressing a “Stakeholders Conference on Oil Theft and Loses in Nigeria”.
The conference with the theme: “Protecting Petroleum Industry Assets for Improved Economy”, was organised by the Investigative Panel on Oil Theft/Losses in Nigeria under the chairmanship of retired Maj.-Gen. Barry Ndiomu.
“All theft and sabotage of oil and gas assets are a clear and present danger to our economy and national security. Not only do they pose a serious threat to all exploration and our energy economy, but they also impact negatively what is accrued to the federation and the business prospects on investors in the oil and gas sector.
“If not checked, this will fuel crises that will paralyse the government and leave our country extremely vulnerable to all of the shocks and other unexpected consequences.
“Large-scale theft of crude oil undermines our efforts to optimise the intended vision. Nigerian Extractive Industry Transparency Initiative (NEITI) put the audited figure of oil theft and losses at something in the order of 619.7m barrels of crude oil daily.
“And this is valued at $46 billion dollars or N16.25 trillion; and all of these losses occurred between 2010 and 2020,” he said.
“In addition, Nigeria lost about 4.2bn liters of petroleum products from refineries which were valued at over 1.4bn dollars at the rate of 140,000 barrels per day from 2009 to 2018.
“This is just an average, because, there are peaks where we see losses between 200 to 400 thousand barrels in a day.
“Institutional and personal reputation are at stake. I think that is the cardinal reason we are here. I employ us to exhaust the decision on this matter.
“With the profile of discussants, I hope you will discuss appropriately and come up with recommendations that would proffer solutions and achieve the overall objective of this conference.
“I want you to think out of the box and be courageously innovative in proferring your recommendations,” Osinbajo charged.
He further stressed that the total value of crude oil losses between 2009 and 2020 was higher than the size of Nigeria’s foreign reserve at any point in time and also 10 times Nigeria’s savings in our crude account.
He commended Ndiomu and the National Security Adviser, retired Maj.-Gen. Babagana Mongonu.
“However, our administration is committed to leaving our best actions, notes and ideas for use by the next administration and better of our nation”.
Monguno said the presence of Osinbajo clearly demonstrated the resolve and commitment of the Federal Government to address the perennial challenge of oil theft and other related criminalities in the country.
“The initial concerns of oil theft in the country date back to the early 1980s; but in recent times, the situation has developed to a more pronounced and disturbing level.
“This is because the criminals have now increased the level of sophistication considering the various methods they employ to tap primary pipelines with illegal secondary pipelines to load on barges and sell to international collaborators.
“Also they process locally for illicit domestic sale. These attacks on oil-producing facilities have led to several shutdowns, and in some instances declaration of force majeure by some international oil companies in the country.
“This had resulted in the loss of revenue and by implication negated the capacity of government to generate the required resources to fulfill its statutory responsibilities to the citizenry,’’ said the NSA.
According to him, addressing crude oil theft requires strong interagency collaboration with the relevant stakeholders, such as security agencies, the NNPCL, International Oil Companies and very crucially, the local communities.
Mongonu explained that a high-tech real-time Intelligence Maritime Domain Awareness Facility between August 2018 and January 2023 facilitated the prosecution of over 200 vessels involved in maritime criminality within Nigeria’s Exclusive Economic Zone.
“In addition, 83 oil tankers involved in various crude oil and product theft have been arrested while the theft of over three million barrels of crude oil was prevented and 11 million litres of petrol and diesel were recovered.”
The Minister of State for Petroleum Resources, Mr. Timipre Slyva, said the theme of the conference was apt, adding that it will address some of the challenges bedeviling the oil and gas sector for decades.
Slyva explained that the volume of crude oil loss to non-state actors and the manner the situation has disrupted the nation’s economy is of grave concern.
“The oil and gas industry as the major source of foreign exchange for Nigeria’s industry has come under serious attacks, bringing serious losses to government revenues.
“30 years ago, Nigeria could produce over two million barrels of oil per day; however, today, it struggles to drill as little as 60 percent of that amount.
“The concerted efforts of the government in terms of securing our petroleum industry assets are yielding positive results and this tempo will be sustained to achieve OPEC’s quota,’’ Slyva said.
Slyva was represented at the event by the Director of Downstream Sector in the ministry, Mr. Mohammed Abubakar.
The Chairman of the Special Investigative Panel on Oil Theft and Losses in Nigeria retired Maj.-Gen. Barry Ndiomu, had earlier said due to the protracted cases of oil theft, the Federal Government awarded pipeline surveyed contracts to some companies.
According to him, the company included Tantita Security Services Limited, adding that the strategy eventually led to the widely publicised discovery of an illegal connection used in the diversion of crude oil along the Trans-Escravas Trunk Line.
“Consequently, the Federal Government immediately swung into action by employing measures to address the situation. This led to the inauguration of the investigative Panel, chaired by humble self.
“There is no gainsaying the enormous impact the menace has had on the nation’s crude oil production with our oil output hitting a 13-year low of 800,000 barrels per day.
“On the side of the law enforcement and security, agencies visits were made to the Chief of Army and Navel Staff, to the DG-DSS, the Attorney General of the Federation and Minister of Justice, the EFCC, among others.
“These engagements availed us information on the challenges their respective organisations faced in securing our nation’s oil assets and combating oil theft.
“These efforts provided us new knowledge and elicited honest discussion amongst Panel Members that led to some obvious conclusions, signifying that theft and loss of crude oil stemmed from the twin issues of complicity and negligence,’’ Ndiomu said.
The chairman of the investigative panel further explained that the emergent picture suggests the existence of a sophisticated network of complicity between elements from the host communities, security agencies and industry players.
He added that they included both government and private institutions alike, as well as international collaborators.
“The conception of this conference is part of the panel’s strategy to obtain additional inputs, information and data on the subject matter. Today’s event, therefore, aims at consolidating on what has been achieved so far,” Ndiomu said.
Also speaking, the Group Managing Director of NNPCL, Mr. Mele Kyari, represented by Mr. Bala Wunti from the company, said the security of oil resources is important to the economic growth of the country.
Kyari explained the various challenges faced by the company in the production of crude oil and called on all stakeholders to be committed in addressing the various challenges that made Nigeria lose its oil resources to criminals.
The event attracted officials from the Ministries of Finance, Interior, Petroleum, Environment and Education.
Others were officials from the National Assembly, Service Chiefs, military and paramilitary agencies, NNPCL, PENGASSAN, NIMASA, Oil Companies, Captains of industries, traditional rulers from host communities and many relevant stakeholders.