Will the scourge of oil theft, pipeline vandalism ever end?

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The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, said the Corporation had recorded 45,347 pipeline breaks on its downstream pipeline network across the country between 2001 and January to June of 2019, to underscore the gravity of activities of oil thieves and pipeline vandals in Nigeria.

On December 5, part of the System 2B pipeline was vandalised by oil thieves at Baruwa village in Egbe-Idimu Local Council Development Area of Lagos State. In the process of stealing refined petroleum product especially premium motor spirit (petrol), the pipeline caught fire and resulted in loss of several lives, revenue and environment pollution. The incident was the second in the year in the same area as similar attack occurred in November.

The Chief Operating Officer, Downstream, Nigerian National Petroleum Corporation (NNPC), Mr. Adetunj Adeyemi, said Baruwa has become particularly a difficult area as there was fire outbreak twice there last year, in February and April, and this year alone, in November and December, all caused by pipeline vandals and oil thieves.

The menace is not only restricted to Baruwa area but traverses every part of the country where there is crude, products and gas pipelines. This has led to loss of over 3000 lives and trillions of Naira in revenues that would have accrued from oil losses and burnt properties. For instance, In July 2000 in Jesse Delta State, over 250 were killed in pipeline explosion.  Also, on October 12, 2018, in Umuimo and Umuaduru village, close to Arongwa in Osisioma Local Government Area of Abia State, about 200 people died of pipeline explosion while many houses were burnt and properties worth billions of Naira destroyed. The victims often were people scooping refined petroleum products from vandalised pipeline.

On 26 December 26, 2006 and December 19, 2018, scores of lives were lost and properties worth millions of Naira destroyed in the Abule Egba area of Lagos as a result of pipeline vandalism. Similarly, on July 4, at Ijegun area in Lagos, pipeline explosion caused by vandals, led to several deaths and loss of properties.

The list is long and has been happening over the past few decades in different states including Rivers, Bayelsa, Imo and Enugu, among other states where there is petroleum pipeline.

Besides loss of lives, economic and environmental ruins caused by these incidents, hardly are these vandals caught despite presence of security personnel assigned to man these pipelines. According to oil industry operators, the security personnel that monitor the facilities are grossly inadequate as the oil and gas infrastructure is huge.

Current data from the Ministry of Petroleum Resources showed that the industry has 258 oil fields, over 2000 wellheads, 5,120 kilometres of pipeline for products, 4441 kilometres of pipeline for crude, 164 kilometres of pipeline for gas and 124 kilometres of pipeline for condensates. This makes it impossible for the security personnel to oversee all at the same time, the operators said, adding that there is need for robust collaboration with communities, law enforcement agencies and others to really secure the pipelines.

Economic losses

 

According to data obtained from the Nigeria Extractive Industries Transparency Initiative (NEITI), $41.94 billion was lost to crude and refined product theft in 10 years, 2009-2018. A breakdown of the losses revealed $1.56 billion worth of crude loss was incurred by the Nigerian National Petroleum Corporation (NNPC), $1.84 billion worth of refined products loss and $38.54 billion worth of crude losses by oil companies. Further breakdown showed volume of crude losses in the 10 years. In 2009, 69.9 million barrels of crude oil was lost; in 2010, 28.3 million barrels; in 2011, 38.61 million barrels; in 2012, 51.58 million barrels; in 2013, 78.3 million barrels; in 2014, 40.17 million barrels; in 2015, 27.12 million barrels; 2016, 101.05 million barrels; in 2017, 36.46 million barrels; and 2018, 17.46 million barrels.

On losses incurred through pipeline vandalism and the monetary value between 2009 and 2015, NEITI said in 2009, about 1.77 million barrels estimated at $88.28 million was lost; in 2010 , about 2.33 million barrels worth $166.77 million; in 2011, about 6.39 million barrels worth $639.13 million; in 2012, about 3.05 million barrels worth $304.56 million; in 2013, about 2.40 million barrels worth $240.12 million; in 2014,  about one million barrels worth $100.01 million; and in 2015 , about 0.51 million barrels worth $25.93 million.

On losses incurred through refined petroleum products between 2009 and 2017, NEITI said in 2009, $78.48 million was lost; in 2010, $72.10 million; in 2011, $98.68 million; in 2012, $201.71 million; in 2013, $284.01 million; in 2014, $273.55 million; in 2015, $287.56 million; in 2016, $37.49 million; and in 2017, $514.23 million.

Meanwhile, in the first half of 2019 (January-June) between 150,000 barrels per day (bpd) and 400,000 bpd of crude oil was lost. The figures are between 7.5 per cent and 20 per cent of total production of Nigeria’s daily production two million barrels, NEITI said.

According the Agency, 22 million barrels were lost in first half of 2019, which is valued at $1.35 billion, about five per cent of 2019 budget and higher than combined 2019 budgetary capital allocations for health, education, defence and agriculture.

It is noted that the issue is not just a 2019 problem but actually a lingering ones, saying the data that showed the $41.94 billion loss in 10 years translated to $11.47 million a day, $349 million a month and $4.19 billion a year, which were colossal losses in ramifications.

The Nigeria Union of Petroleum and Natural Gas Workers on Monday gave reasons for non-pumping of petroleum products through System 2B Pipelines Network by the Nigerian National Petroleum Corporation.

Also whenever there is attack on the System 2B pipeline, it paralyses commercial activities substantially. The System 2B pipeline takes fuel from Atlas Cove Jetty in Lagos and supplies to depots in Ejigbo, Mosinmi in Ogun State, Ibadan in Oyo State and Ore in Ondo State as well as to Ilorin in Kwara State. Therefore, any breach on the pipeline puts consumers that depend on these depots for fuel supply on unsavoury situation.

Besides, time and cost of fixing vandalised pipelines is long and huge causing drawbacks on social and economic activities. The Federal Government spends about N125 billion yearly on repairs of vandalised pipeline.

Also, it takes long to remediate lands where pipeline vandalism and oil theft occur because the oil damages the soil and water and render them useless for farming and fishing as well as pollute the air. These are hazardous to people living within the areas of the incidents.

What the government is doing through NNPC

The frequency of occurrence and the latest pipelines explosions occasioned by vandals underscores the need for concerted action to curb or stem the menace.  This becomes imperative considering the fact that some of the incidents happen at the same spots without the culprits being caught.

The Chief Operating Officer, Downstream, Nigerian National Petroleum Corporation, Mr. Adetunj Adeyemi, apart from paying a visit to the Baruwa pipeline explosion site promptly, ensured the Corporation collaborated with other agencies including the fire service and Lagos State Government to put out and fire on time.  While talking to reporters, Adeyemi said: “We are here to assess the fire of December 5, 2019 at Baruwa village. We can all see that the fire has been put out.  This was done within 24 hours of the fire. We thank all the agencies of government, Lagos State Fire Service, officers of the Civil Defence, Nigerian Police, our contractors, who all came here and joined forces to put out the fire. We have started pumping of petroleum product to Mosimi and Satellite Depots. So everything is under control and we have enough products for supply.

“But I must say that Baruwa is a particularly difficult area. Last year, there was fire outbreak twice in this Baruwa area. In February and April last year, and this year alone, in November and December. So this is an area that is very prone to fire and vandalism. We are doing our best in the NNPC to ensure we have security and have adequate maintenance in terms of pipeline integrity. We are also appealing to the residents here, the community leaders and religious leaders to ensure that they also protect the pipelines. This is Nigeria’s assets and we must protect it as Nigerians. Like they say, security is for everybody, so when you see something, say something.

“We will continue to engage them. Our public affairs department and security departments are engaging them and we will continue to make sure that we do that engagement on a regular basis. We also have been enlightening Nigerians on the right of way (RoW) of the pipeline and the need to protect it. We will continue to engage Nigerians, put in place security measures and also technology to ensure that the pipelines are secure.”

The Baruwa community lauded the NNPC for its quick intervention in containing the fire and remediation of the environment. The Bale of Baruwa Community, Alhaji Khalid Baruwa, identified with the push by the Corporation to tackle the issue of pipeline vandalism and oil theft headlong.  He stressed the need to fortify surveillance around the community with clear demarcation of pipeline Right-of-Way.

Collaboration as the way out

The NNPC has forged a formidable alliance with some key stakeholders in the downstream sector of the petroleum industry including the Nigerian Association of Road Transport Owners (NARTO) to ensure their members don’t engage in lifting fuel or crude from vandals and oil thieves; Tanker drivers, Community leaders. The collaboration is to enable NNPC join forces with them to combat pipeline vandalism not just in Baruwa Community but in all its pipeline right of way across the country. To the Corporation, the alliance will stamp out the ugly incidences of oil pipeline vandalism while ultimately sustaining the prevailing sanity in the supply and distribution of petroleum products across the country.

The Executive Secretary, National Association of Road Transport Owners (NARTO), Mr. Aloga Ogbogo, said the protection of oil pipeline infrastructure should be the responsibility of every well-meaning Nigerian.

The National Chairman of Petroleum Tanker Drivers (PTD), a branch of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Salmon Oladiti, assured of the commitment of his members to work with NNPC to combat the activities of oil thieves and pipeline hackers.  He said PTD prohibited its members from partaking in the illicit transport of stolen products because it views it as an act of economic sabotage.

The Chairman of Peace Estate Development Association, in Baruwa Community, Mr. Omojowo Adedeji, said the entire residents of the estate, which borders the scene of incessant attacks, fully aligns with the renewed drive by the NNPC to stamp out the illicit trade in stolen oil within and around the community.

The Group Managing Director of the NNPC, Mallam Mele Kyari, corroborated Adeyemi. He said the Corporation has laid out steps to mitigate the twin menace of pipeline vandalism and crude oil theft in Nigeria’s oil and gas industry. Speaking in Abuja at the inaugural Nigeria Extractive Industries Transparency Initiative (NEITI) Policy Dialogue, he said oil theft had remained a challenge in the Industry despite some strong interventions in the past.

Kyari, however, assured that the gradual reduction in incidences of vandalism and theft would be sustained through improved collaboration, implementation of Global Memoranda of Understanding (GMoUs), and deployment of appropriate technologies, among other measures.

Kyari who was represented at the event by the NNPC Chief Operating Officer, Upstream, Mr. Roland Ewubare, listed other measures to curb the menace to include a security architecture with single accountability for national critical infrastructure; Industry and regulatory commitment to transparent crude oil and products accounting; realistic expectation by host communities; and emplacement of sustainable social investment mechanism.

He emphasised the need to inculcate shared values of integrity and transparency across every level of the governance structure for pipeline security, policy refill and enforcement of legal actions on economic saboteurs.

The NNPC chief harped on the need to prioritize and instill in the nation’s teeming youth a sense of patriotism and national orientation.

On the immediate and remote causes of oil theft and pipeline vandalism, Kyari stated that most stakeholders were of the view that oil theft was essentially a social problem, which is caused poverty in the communities, community-industry expectation mismatch and corruption.

Others, he noted, include ineffective  law enforcement,  poor governance, poor  prosecution  of  offenders,  high  unemployment  in  the communities,  thriving illegal oil  market involving both Nigerians and foreigners, and inadequate funding of resources to combat oil theft.

He lamented that NNPC, as an operator, had suffered severe attacks on its facilities and assets, noting that between 2001 to half year 2019, NNPC had recorded a total of 45,347 pipeline breaks on its downstream pipeline network across the country.

Kyari said for the Nigerian economy to prosper, NNPC and other oil companies must be able to operate efficiently and profitably. “Unfortunately, the combination of crude oil theft, illegal refining and pipeline vandalism, has become a major threat to Nigeria in meeting its revenue projections in recent time,” he added.

The Edo State Governor, who is also the Chairman of the National Economic Council (NEC) Ad Hoc Committee on Crude Oil Theft, Prevention and Control, Mr. Godwin Obaseki, stressed the need to institute a proper governance structure for pipeline security in the Industry. Obaseki called on the Nigeria Intelligence Agency (NIA) to work with the NNPC in identifying possible international markets and destinations of stolen Nigerian crude oil.

He said the Industry must end the prevailing incentives that make it possible for crude oil theft and pipeline vandalism to flourish, adding that the National Economic Council (NEC) had upgraded the Ad Hoc Committee on Crude Theft to a standing committee with mandate to provide regular updates to NEC as may be required.

The Executive Secretary of NEITI, Mr. Waziri Adio, reeled out the statistics on the ugly situation of oil theft and pipeline vandalism and challenged participants at the policy dialogue to come up with practical solutions as the theme of the dialogue is “Stemming the increasing cost of oil theft to Nigeria.

Need for National Assembly to legislate against oil theft, pipeline vandalism

At different fora in Nigeria and abroad stakeholders in the oil and gas industry including the Oil and Gas Trainers Association (OGTAN), Society of Petroleum Engineers, Nigeria Council and the Nigerian Association of Petroleum Explorationists, had stressed the need for the National Assembly to make laws that will deter oil thieves and pipeline vandals from engaging in the nefarious acts. To them, that will be the only sustainable way to stem the crime.  When there are laws that will appropriately punish vandals, oil thieves and economic saboteurs, the crime will drastically reduce, they added.

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