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Crude Theft, A Rape On Nigeria’s Economy

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It is mostly referred to as oil bunkering while at other times the adjective “illegal” is added to make it explicit. But what aptly describes this act is “Theft” though still on a mild note considering how dastardly the act is.

Crude oil theft in Nigeria has been on the increase as it is estimated to have caused the country to lose about $7 billion (N1.13 trillion) annually. An average of about 150,000 barrels of crude oil per day is said to be stolen through pipelines hacking at different locations and varying sizes of ships are used to convey it to international market and sold there at a rather cheaper rate.

Journalists were earlier this year taken on a helicopter overfly across the Tora Mainfold, Santa Barbara River, SEGO Bille, Cawthorne Channel and Alakiri all in Rivers and Bayelsa States to confirm the thriving crude oil theft activities taking place at these locations.

“It is difficult to sustain production in the circumstances as we to have to shut down when a facility trips and fix the cause before restart. This happened three times just between the 26th and 30th of January”, an operator of the line explained to newsmen during the overfly.

Buttressing the number of barrels lost to these organised criminals, Shell’s Executive Vice President, Sub-Saharan Africa, Ian Craig told his audience during a technical session at the last Nigerian Oil and Gas Conference (NOG) that this incidence is at present costing Nigeria about 150,000 barrels of crude oil daily. This calls for concern as the neighbouring Ghana with its 120,000 barrels daily per day is making robust plans towards national development with enthusiasm while Nigeria is losing well over 120,000 barrels to oil thieves and no drastic action is taken.

In the same vein, Mrs Diezani Allison-Madueke, the Minister of Petroleum Resources, had at a stakeholders’ meeting in Lagos raised an alarm saying about $5 billion (N810 billion) was spent in the last one year on pipeline repairs culminating to about $12 billion (N1.9 trillion) lost to oil thieves. A whooping amount such as this would have gone along way to address the pressing infrastructural development challenges that are affecting the growth of the economy if the menace is given the required attention.

It was reported recently that over 200 vessels were transacting illegal business on our territorial waters.

According to a top security official the report said these 200 vessels engaged in oil bunkering, illegal fishing, piracy and sea robbery among other vices.

And of course this nefarious activities are perpetrated by some unscrupulous Nigerians in connivance with some foreigners who infiltrate our territorial water ways.

In this colossal loss, the worst hit among the multinationals operating in the country is Shell, the nation’s largest upstream operator. The firm’s footprints traverse all parts of the Niger Delta region being the first oil major to begin exploration and exploitation of crude in the region.

Addressing media Executives in Port Harcourt Shell’s manager, Government & Community Relations, Fufeyin Funkakpo explained that the firm’s operations were divided into two regions; East and West using a river in the middle to dissect the operational regions.

According to Funkakpo the first is the Trans Niger Pipeline (TNP) which begins from Bonny Island cutting across Rumuekpe, Bayelsa, Egbema, Ebubu to Ogoni areas to Bomu and back to Bonny like a loop.

The second, he explained further is the Nembe Creek Coastal Trunkline (NCTL) that connects the flow stations in the Nembe areas through the famous Cawthorne Channel and ends in Bonny. The crude oil that accounts for 95 per cent of foreign earning which sustains 80 per cent of the national budget is mostly carried by the two pipelines.

These pipelines are regarded as the nation’s economic arteries as they help Nigeria to generate a GDP of $415 billion positioning it as the world’s 31st largest economy.

The nation’s foreign reserves which grew to $36 billion in the past year is attributed to these pipelines. This two livewires of  the nation’s economy are the ones that are constantly under the attacks of oil thieves and whenever this rape was brought before the public domain government seems to turn deaf ear to it.

It is gathered that it has taken numerous steps to save these economic livewires of the country including the decision of the federal government to set up the JTF to the firm’s mulling the idea of technical solutions through pipeline alerts.

This, however, seems not to have yielded the desired fruits, as the Anglo-Datuch group, said last week that it may not meet the contractual obligations on certain exports from Nigeria because of theft and damage to key pipelines in the Niger Delta region.

Shell’s Nigerian joint venture (SPDCJV) declared force majeure on Bonny and forecados according to a statement by the company.

“Bonny loadings are affected as a result of production deferment caused by the fire incident on bunkering ship on the Bomu – Bonny Trunkline and production deferment from a third party producer because of flooding”, the statement said.

The firm noted that export from forcados were affected by damage caused by suspected bunkering on the trans forcados pipeline and the Brass creek trunkline.

Beside illegal bunkering, there is the official theft where it is alleged that Expert clearance Permit are fabricated.

According to a report, crude oil worth $1.6 billion with fabricated Export Clearance Permit was reported to be allegedly exported by the Nigeria National Petroleum Company (NNPC).

A letter to the President which was attributed to Dr. Olusegun Aganga said a forged crude oil and gas Export Clearance Permit, No: CO/28/Vol.V111/09 that was purportedly issued by the Federal Ministry of trade and Investment to NNPC for shipment of 24 million barrels of crude oil and gas in the third quarter (July to September) 2012 was discovered.

The Minister explained that the matter was officially reported to the office of the Economic and Financial crimes commission (EFCC) for investigation and it was revealed during investigation that one of the permits was forged as it was not issued from his office and did not bear the security features that were built into the original permit forms.

Although, the management of NNPC dissociated itself from the allegation and described it as false and baseless.

NNPC said in a statement signed by the acting Group General Manager Public Affairs of the Corporation, Mr. Fidel Pepple, that all crude oil and gas exports by it follow a rigid and established guideline.

“We have always and continued to follow existing requirements for exporting crude oil and gas from the country. The process is complex and involves the Ministry of trade and Investment, the Ministry of Petroleum Resources, the DPR, and the Nigerian Customs Service”, Pepple noted.

Also worrisome is the high level of frauds going on in the oil and gas industry.

A recent report by the Petroleum Revenue Special Task Force headed by Nuhu Ribadu revealed that Nigeria has lost out on tens of billions of dollars in oil and gas revenues over the last decades from cut price deals struck between multi-national oil companies and government officials.

The committee which was set up by the Minister of Petroleum Resources, Mrs Diezani Allison-Madueke in a confidential 146 – page report provided new revelation on the long history of corruption in the industry and highlighted that ; “Nigeria loses out on $29 bn on cut-price gas deals; state-oil company sells itself cheap oil and gas; oil ministers hand out discretionary oil licences; hundreds of millions in missing bonuses, royalties; traders buy crude oil without formal contracts.”

The report concluded that oil majors, Shell, Total and Eni made bumper profits from cut-price gas, while Nigerian oil Ministers handed out licences at their own discretion. This, while not illegal, did not follow best practice of using open bids.

Hundreds of millions of dollars in signature bonuses on those deals were also missing, the report said.

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Oil & Energy

PH Refinery Trains 80 Youths In Rivers

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The Port Harcourt Refining Company Limited (PHRC)-Eleme has graduated 80 participants of its youth empowerment and skills acquisition programme, charging them to be economically preoccupied with their acquired skills.
The Managing Director, PHRC, Mr Abba Buka gave the charge at the 3rd Graduation Ceremony of Youth Empowerment and Skills acquisition Programme (YESAP) in Eleme, Rivers, recently.
The beneficiaries were trained in welding and fabrication, information and communication technology, agriculture vocation, catering, hair dressing, fashion and design and interlock/block moulding.
Starter packs which ranged from sewing machines, power generating sets, hair dryers and washers, welding inverters, gas cookers, to cooking pots were presented to them according to the skills they acquired.
Buka, who presented the beneficiaries with Certificates of Completion and starter packs, urged them not to sell the packs but to use them judiciously to be empowered economically.
According to him, skills acquisition and youth empowerment are no doubt a proven route to economic prosperity for any community.
‘’It affords the youth an opportunity to explore inner creative talents in them, build confidence and explore channels for useful economic involvement.
He said that it was due to the advantages that the company, in commitment to its corporate social responsibility and sustenance of its community relations, invested in the YESAP for the youth of its host communities (Eleme and Okrika).
‘’It is my hope and belief that the youth empowerment and skills acquisition programme will divert the attention of the youth from crimes and criminality as they would be economically preoccupied.
‘’And therefore reduce cases of strife and apprehension in the communities and youth restiveness,’’ the MD said.
Buka charged the host communities to continue on the part of peace and negotiation using the Joint Community Relations Committee (JCRC) platform to resolve any differences that might arise.
He assured the communities that they would be carried along in the different phases of the company’s planned rehabilitation, adding that the company was committed to maintaining the cordial relationship with the communities.
Also speaking Executive Director Services, PHRC, Mr Babatunde Sofowora said that the graduation of the 3rd edition of YESAP was a testament to the commitment of the company and NNPC to foster mutual and symbiotic relationship with the host communities.
The company had earlier trained 155 youths in various areas of trade in its first and second editions and the recent edition has brought the number of beneficiaries to 235.
Mr Obari Moses, who spoke on behalf of the beneficiaries, thanked the company for its gesture stating, ‘’we are well-trained. Acquisition of talent cannot be quantified.
‘’We are aware of the challenges in business but with the knowledge we have been given, we shall surmount the challenges.’’
Another beneficiary, Grace Obari who acquired skills in fashion and design said that she had achieved something she never achieved in her life adding, “now I can sew by myself.
“I’m very happy about the scheme; may the Lord bless the PHRC abundantly for giving me skill to better my life and contribute my own quota to the economy.”

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‘Nigeria Imports 5.61bn Litres Of Fuel In Q2, 2019’

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The National Bureau of Statistics (NBS), has announced that 5.61 billion litres of Premium Motor Spirit (PMS), popularly known as petrol were imported into the country in the second quarter of the year.
The NBS said this in its Petroleum Products Imports and Consumption (Truck Out) Statistics for Second Quarter, 2019, obtained from its website.
It also reported that 1.38 billion litres of Automotive Gas Oil (AGO) also known as diesel, 12.22 million litres of kerosene and 131.36 million litres of aviation fuel were imported.
The report also indicated that 77.24 million litres of base oil, 41.79 million litres of bitumen and 27.68 million litres of Low Pour Fuel Oil were imported in the period under review.
According to the report, 354.70 million litres of Liquefied Petroleum Gas (LPG) was also imported into the country in the second quarter of the year.
The NBS said that state-wide distribution or truck-out volume for the second quarter showed that 5.18 billion litres of petrol were distributed nationwide.
It said that 1.28 billion litres of diesel, 131.42 million litres of household kerosene, 176.14 million litres of aviation fuel and 157.29 million litres of domestic gas were distributed nationwide during the period.
The data for the report was provided by the Petroleum Products Pricing and Regulatory Agency, verified and validated by the NBS.

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HYPREP Admits Receipt Of $180m For Ogoni Clean-Up …Denies Allegations Of Missing Funds

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The Hydrocarbon Pollution Remediation Project (HYPREP) has denied allegations that some funds it received for the on going Ogoni clean-up exercise were missing, saying the body has so far received $180million.
The Project Coordinator of HYPREP, Dr. Marvin Dekil, disclosed this in Port Harcourt, the Rivers State capital, during a live radio programme monitored by The Tide, recently.
It would be recalled that HPREP was set up by the Federal Government to implement the recommendations of the United Nations Environment Programme (UNEP) report on the pollution in Ogoni land, Rivers State.
Dekil, who was reacting to allegations in some quarters that the clean-up funds may have been diverted due to the prolonged delay in implementing the UNEP report, explained that the initial cost of the clean-up was $1billion, but that the cost could be more.
“Let us start by asking how much is the process going to cost? The process is going to cost an initial $1billion. That is what we need to start with to my understanding. It is going to cost more, I believe.
“How much have we received? We received an initial $10million, and recently, another $170million. So, we have received $180million.
“That is what the Board of Trustees of HYPREP has received. Each time I talk about this money, I am very particular, and I have to let people understand the governing structure of HYPREP, and the different roles played by these structures.
“It is the Board of Trustees (BoT) that is in charge of receiving this money. They function separately from the project coordination office. Remediation is an international activity. If you cost it in local ways, you may not appreciate what we are doing.
“The way it works is that the BoT collects the money, and they are holding it. They are managing it. It has nothing to do with project coordination office. There is the Governing Council that approves all our activities. They are the approving and policy making part of the project, separate from the BoT, and separate from the project coordination office,” he stated.
The HYPREP project coordinator further said that “Just this month (August), my team and the United Nations team and the oil companies just finished with the budget this year, and we are looking at the activities between now and December. That will cost, I think, about $80million. These are the things that we are going to do.
“That we have the money, even if the entire $1billion was given to us now, it doesn’t mean that we are going to spend all of it just like that. You need to come up with detailed programmes and have the buy-in of all the stakeholders to what it is you want to do with the money before you spend it.
“This is how difficult it is to spend the money. So, when they are talking about ‘you have received $180million, what have you done with it? The money is there. We are taking it as we need and as all the parties agreed that it will be spent. When I talk about the parties, I am talking about the three governing structures.
“I am also talking about the stakeholders, being the oil companies, the United Nations system, the Nigerian government. We are driving this process and the Ogoni people who are also part of this administration and the policy making of this will all have to agree on how to spend the money and what to do with it within the context of the recommendations of the United Nations.
“This is what we have been doing. And you see frequently we are going back to Geneva because that is where the technical capacity, the leadership of UNEP is. So, we don’t take one step without synchronizing the input of all who are on this. So, not a dime of our money will be spent without the input of others, and so, no money is missing,” Dekil stated.

 

Dennis Naku

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