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Crude Theft, A Rape On Nigeria’s Economy



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

‘NNPC Spent N15b To Reconstruct Lagos-Badagry Expressway’



The Nigerian National Petroleum Company Limited (NNPC Ltd.) has disbursed N15 billion for the reconstruction of the Lagos Badagry Expressway under the Federal Government Road Infrastructure Tax Credit (RITC) Scheme.
The N15 billion represents a 100 per cent payment of the funding of the Lagos-Badagry Road rehabilitation under the tax credit funding of the NNPC Ltd.
Group Chief Executive, NNPC, Mr Mele Kyari, made this known when he led NNPC’s management team with some top government officials to inspect the ongoing rehabilitation and expansion of Lagos-Badagry Expressway (Agbara Junction-Nigeria/Benin Border).
The road under rehabilitation is being funded by the NNPC Ltd. under the Federal Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.
The execution of the scheme is being carried out in collaboration with the Federal Ministry of Works and Housing as the supervisor and Federal Inland Revenue Service (FIRS) for NNPC’s tax obligations deductions.
This is in response to address the plight faced by petroleum products marketers in transportation which affects nationwide distribution.
Kyari said the fund disbursed was part of the N621.24 billion earmarked for the reconstruction of 21 roads nationwide under the scheme.
He expressed satisfaction over the stage of the road development.
“We are covering 1,804.6mkm across the country and taking another set of over a trillion naira investment on infrastructure in Nigeria, believing that with the tax credit system which Mr President has put in place, very soon there will be massive change.
“NNPC as the enabler will consider from its cash flow and fund whatever FIRS and Ministry of works approve for the company”, he said.
The Minister of Works and Housing, Mr Babatunde Fashola, represented by the Director, Highways, Roads and Rehabilitation of the Ministry, Mr Folorunsho Esan, said the intervention of the NNPC sped up the reconstruction of the expressway.
Esan said the project was 40 per cent completed.
“In the next 12 months we should be able to deliver this project because the drainages are in place, just for earth works and pavement works, it cannot take us more than 12 months,” he said.
Speaking on the gridlock being caused by the Lagos-Ibadan Expressway project, he said the contractor would clear all impediments and move out of site by December 15 to make the highway free for Yuletide.

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Oil & Energy

Oil Marketers Urge Buhari To Crash Diesel Price



Petroleum marketers under the platform of Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) rose from their 2nd National Executive Council (NEC) meeting last week, within a plea to President Muhammadu Buhari to direct the Central Bank of Nigeria (CBN) to make dollars available at official rate to oil marketers.
This, they said, will enable them import diesel, end petrol scarcity, and ultimately save the Nigerian economy from sinking, saying that dollar support should be available till Dangote Refinery comes on stream later in the year.
The association, among others, urged the National Assembly to immediately enact a Bill for the establishment of Energy Bank for easy transaction in petroleum products in the sector.
National President of the Association, Mr Benneth Korie, who briefed the media after the NEC meeting in Abuja, noted that the bulk of the operational challenge peppering marketers and depot owners spring from expensive diesel which hovers around N850/litre.
While thanking President Muhammadu Buhari for approving a higher bridging cost payment to transporters, Korie said the operators’ challenges were far from over as oil marketers and depot owners spend about N20 million weekly on diesel to power their operations, thus eroding their profits.
The association urges the National Assembly to review the policy of taxation as it affects petroleum products supply and distribution chain.

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Oil & Energy

Senate To Honour Brave Petrol Tanker Driver 



The Senate has resolved to honour Ejiro Otarigho, the brave tanker driver who drove a burning tanker from danger zone to avert a tragic fire incident in Agbarho, Delta State.
The Senate has also recommended Ejiro to President Muhammadu Buhari for National Honours.
This followed a motion moved by the Deputy President of the Senate, Senator Ovie Omo-Agege, and co-sponsored by Senator James Manager and Senator Peter Nwaoboshi, at plenary.
It would be recalled that in a rare act of bravery, Ejiro had last week driven a burning tanker from danger zone to avert what could have been a tragic fire incident in Agbarho, Delta State.
The incident happened last Friday when Ejiro drove the burning truck for 25 minutes from a densely populated area to Agbarho River where the tanker was completely razed in the inferno. The act was captured by onlookers and had gone viral.
Rising under Order 45 and 52 of the Senate Standing Order 2021 (as amended), Senator Omo-Agege stressed that but for Ejiro’s courage, a major fire disaster which would have claimed several lives and property could have happened in his senatorial district.
The Delta Central lawmaker noted that Ejiro’s “extraordinary display of courage, reflex application of special driving skills, and huge risk to his own life, prevented a huge national tragedy and catastrophe by driving a burning tanker loaded with inflammable petroleum products from residential areas to safety so that thousands of our people may not die in an inferno that would also have consumed so much property in Agbarho, Delta State on Friday, June 10, 2022”.
The driver’s audacious act of heroism, he stressed, has saved the nation from national tragedy and mourning.
Accordingly, the Senate resolved to “invite Mr. Ejiro Otarigho to the Chamber of the Senate for public commendation by the President of the Senate, Senator Ibrahim Lawan.
“Recommend Mr. Ejiro Otarigho to His Excellency, President Muhammadu Buhari, GCFR, President and Commander-in-Chief of the Armed Forces of Nigeria, for a befitting National Honour as Mr. President may deem fit for his extraordinary act of bravery, courage and skill that prevented the loss of human lives and property on a massive scale”.
President of the Senate, Senator Ahmad Lawan, who presided over plenary, hailed the driver for risking his life to drive the burning truck out of residential area to save lives.

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