NNPC’s new approach to fighting oil theft

IN yet another move that did not quite amuse Nigerians, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Ltd, Mr. Mele Kyari, and others recently carried out an aerial view of the situation in the Niger Delta. The exercise followed worsening cases of oil theft and vandalism of oil pipelines. According to Kyari, there is a new collaboration by the NNPC with security agencies and host communities to arrest the development. As part of measures aimed at boosting the level of security for Nigeria’s oil assets, the Chief of Defence Staff, General Lucky Irabor, in company with the Inspector-General of Police, Mr. Usman Alkali Baba, and the Commandant-General of the Nigeria Security and Civil Defence Corps, Dr. Ahmed Abubakar Audi, recently held a meeting in Abuja with the governors of the Niger Delta states. The meeting, which also had the NNPC GMD in attendance, dwelt on the threats to the country’s oil and gas sector. According to the CDS, the meeting was based on the directive by President Muhammadu Buhari to contain the threats to the security of oil and gas assets. As he noted, the security situation in the Niger Delta demanded quick action given its effect on the country’s production capacity.

In its audit report published in July 2021, the Nigeria Extractive Industries Transparency Initiative (NEITI) had indicated that in 2019, Nigeria lost 42.25 million barrels of crude oil valued at $2.77 billion to oil theft, and could have earned significantly much more revenue if there had been no crude oil losses due to metering error, theft and sabotage in that year. The losses, the report said, were incurred by companies that conveyed crude volumes through pipelines that were easily compromised by saboteurs. The report, therefore, recommended that the government should ensure proper surveillance, including land-based surveillance and aerial satellite photography. Again, the figures recently released by the National Bureau of Statistics (NBS) showed that in the fourth quarter of 2021, the country recorded an average daily oil production of 1.50 million barrels per day, a lower volume compared to the 1.56mbpd recorded in the fourth quarter of 2020 by 0.06mbpd. In the fourth quarter of 2021, daily oil production also showed a lower volume compared to the third quarter of 2021 production volume of 1.57mbpd. The trend accounts for oil growth rate of -8.06 percent in real terms recorded in the fourth quarter of 2021 and annual growth rate of -8.30 percent in 2021. During the fourth quarter of 2021, oil contributed 5.19 percent to Nigeria’s GDP, representing a decline from the 5.87 percent it contributed in the fourth quarter 2020. On an annual basis, oil contributed 7.24 percent, which was lower than the 8.16 percent recorded in 2020.

As the NNPC itself must be willing to acknowledge, aerial monitoring of pipelines in the Niger Delta is no new song. For instance, in March 2016, the corporation indicated that it was working with the Nigerian Air Force to deploy drones to monitor oil pipelines in the Niger Delta and beyond. Speaking during an interview, the then Director, Defence Information, Brigadier-General Abubakar Rabe, said the Nigerian military was in search of the most cost-effective measures to protect pipelines, and had entered into a strategic liaison with the NNPC. He noted, “The Minister of State for Petroleum was here in our headquarters and we all deliberated on how to come up with a simple and cost-effective strategy on how to survey our pipelines. We have simple technologies that can take care of all these things but we must have physical strength: the personnel must be there to ensure that no physical person comes around and inflicts any harm on the pipeline wherever it is located. Remember that we have over 50,000 pipelines in this country. So, it’s a huge effort and I believe it is not going to be too hard to do with the current technology, physical security and our commitment to this our nation.” So, what went wrong?

If the deployment of drones in curbing oil threat worked in 2016, then why did it cease and why has the country been consistently witnessing a haemorrhage of oil revenue due to the nefarious activities of vandals? If the government cannot protect oil assets and oil is Nigeria’s cash cow, what really can it do? We do not think that the NNPC has given Nigerians all the relevant information that they need regarding developments in the sector. The NNPC’s management should go to the parliament to respond to the queries raised by lawmakers over the management of the oil sector. Truth be told, the proclamation of new strategies to fight oil theft is a confirmation of helplessness and the abysmal failure of all the measures taken over the years to curb the menace. It means that all the agencies of government involved in protecting and managing the industry are culpable. How is it that petroleum products are still being smuggled across the borders at will? What about the impunity still going on on the high seas?

The conclusion is inescapable that the so-called efforts aimed at curbing oil theft, illegal bunkering and pipeline vandalism are cosmetic and delusional.