Analyzing Crude Theft In Nigeria

Nigeria loses 400,000 barrels of crude oil daily to theft, says Sylva”, “Nigeria loses $1.9billion to oil theft monthly — NNPC CEO”, “Elite behind oil theft, illegal refineries in N’Delta”. These are all telltale headlines which Nigerians are very much familiar with. So, they are hardly shocked about the stale news any longer. What is perhaps shocking is the fact that the very government that should ensure such a thing is reduced to the barest minimum if not eliminated outright is the one that is wringing its hands in frustration, suggesting helplessness on the rather curious and unsavoury development.

Minister of State for Petroleum Resources, Timipre Sylva, it was who reminded us of the notorious fact that the country loses about 400,000 barrels of crude oil to theft daily. The minister spoke when he led a delegation of some Federal Government officials on a courtesy visit to Governor Hope Uzodimma of Imo State, at the Government House in Owerri. Sylva, who described the phenomenon as a “national emergency” added that the delegation was in the state to solicit the assistance of the host communities in ending the menace, which has reduced the country’s OPEC quota from 1.8 million barrels to 1.4 million barrels.

At a conservative $100 per barrel, this means some N40million daily of monies that should accrue to the country going into private pockets.

We do not have to stress ourselves trying to find out what the loss is monthly, as the MD/Chief Executive Officer of the Nigerian National Petroleum Company Ltd. (NNPC Ltd), Mele Kyari, bailed us out; saying we lose a staggering $1.9 billion monthly to the illegality. This is a serious indictment, especially coming from a government agency with a vital role in checking crude theft.

But then, we should be more worried about the conflicting figures bandied by both the minister of state and the NNPC boss. Granted that there is so much volatility in the international oil market and even exchange rate fluctuations, still, these are not enough to justify posting of highly conflicting statistics by two officials who are supposed to be working under the same ministry.

Much as this exposed the lack of synergy between the ministry and the NNPC, it also signposts one odd fact about the country’s oil sector – that is lack of what could pass for authentic statistics. For instance, the question of what amount of fuel we consume locally has always remained contentious. This is not good enough in a sector that is the country’s cash cow.

What we have on our hands with regard to oil theft is a serious matter, considering the loss to Nigeria in revenue terms. It is only another manifestation of the banditry ravaging the land. With such stupendous easy money from sources such as the one in question, we need not look far for how bandits get funds. In the north, we have gold being mined illegally; the same applies to diamond and other mineral resources, with the proceeds going into private accounts.

Not even the very strong economies of the world can withstand the perennial financial hemorrhage from all these sources.

Interestingly, everyone seems to know those responsible for the theft, even if none has put names to them. Even, Igo Weli, Shell Petroleum Company’s general manager, corporate relations, made a similar allusion on August 8, that the elite in the region are behind the illegality.  He spoke during an engagement on ” “Crude Theft, Pipeline Vandalism and Illegal Refineries in the Niger Delta region”.

But Shell and other companies operating in the country’s oil sector can continue to bemoan their plight. Not the Nigerian government whose duty it is to provide security nationwide, including for vital oil assets. It should fish out these unpatriotic elements engaged in the illegality alongside their collaborators in the security agencies.

We however note the recent seemingly far-reaching decisions reached at a strategic meeting between NNPC Ltd and security agencies on the matter. These include retooling of the security agencies in the Niger Delta, establishment of command and control centre that monitors activities of crude oil value chain, from drilling to designated markets, the whistle blower policy that protects and financially rewards those who offer credible information that can lead to arrest of both crude thieves and pipeline vandals, among others. But these will amount to nothing without the political will to see them through.

It was good that eminent traditional rulers and other representatives of oil producing communities were at the meeting that Sylva had with Gov. Uzodimma. Others on the entourage  were the Minister of State for Education, Mr Goodluck Opiah, Kyari and the Chief of Defence Staff, Gen. Lucky Irabor. But this would not be the first of such visit to oil bearing communities. Why did the previous visits not achieve enduring legacies? The government must be interested in this and be ready to make amends. Here, fidelity to promises is key. The government must be faithful in implementing policies and programmes it promised to deliver to the oil communities to secure their cooperation.

So far, government’s lackadaisical handling of oil theft, in spite of its consequences for the national economy and wellbeing does not reflect the dire financial crisis the country is passing through.

by NigeriaDispatch.

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