Crude Oil Theft: Nigerian Coy NNPC not a serious agency

sky news africa Crude Oil Theft: Nigerian Coy NNPC not a serious agency


When the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, on Tuesday, 18th February, 2020, said “any threat to the corporation’s operations was a direct threat to the very survival of Nigeria because of the strategic role of the corporation as an enabler of the economy”, he spoke the real truth, but that was only half of it.

Whether anybody wants to hear this or not, the other half of the truth which the NNPC boss refused to speak is that the nation’s apex oil concern in itself represents the biggest sabotage and threat to our national interest in the oil and gas sector.

Coming to announce that Nigeria lost about $750m to crude oil theft in 2019, what was the NNPC boss expecting from Nigerians – to give him and his agency a high-five? Of course, those who know will agree that Kyari’s estimate was a very conservative one given to him by the foreign multinational operators but the problem is far in multiples of what the NNPC wants us to believe.

Kyari who spoke to members of the Executive Intelligence Management Course 13 of the National Institute for Security Studies who visited the NNPC Towers, Abuja, on a study tour, also said other security challenges facing the corporation include vandalism of oil and gas infrastructure and kidnapping of personnel.

Now let’s look at it: With over 95 percent of the stolen oil exported as already established and the balance of less than 5 percent allegedly processed locally at the artisanal refineries spread across the Niger Delta region, the federal government should know for certain where this problem lies but the NNPC will never allude to that. Whether anybody wants to hear this or not, the pockets of persons arrested from those “kpofire” locations in the Niger Delta have only token-effect in combating the scourge. Their own nuisance is more in causing environmental devastation some of which may be irreversible.

It has been established that less that 2 percent of the produced crude oil stolen from the nation’s oil facilities in the Niger Delta are taken from flowlines between wellheads and the flowstations. Then between the flowstations and the export terminals, about 3 percent or less is sucked by thieves. So could this be where the problem lies? NNPC should have known that the problem is not at those two points!

Is it not shameful that NNPC as the government eye in the country’s upstream has no in-house ability/capacity to unilaterally establish the daily crude output by its joint venture partners? The Nigerian Petroleum Development Company (NPDC), the upstream operating subsidiary of the corporation is also part of this problem of blurred accounting for produced crude that we erroneously lobed together as stolen by oil thieves.

It should actually bother those that rule us that no two agencies in the management of the nation’s oil business have the same figures on our oil production. Should it be so? Various audit reports have shown that there are often conflicting data submitted by the different stakeholders involved in the core areas in the oil industry – like in the production, lifting and refinery deliveries. Some people would say we produce 1.8 million barrels per day, some other will say we do 1.9 while another set would give you 2.2 mbpd as our output. These are prime areas where a lot of manipulations take place to deliberately short-change Nigeria in the sharing of produced joint venture crude and some top NNPC officials are accomplices particularly the folks in NAPIMS and their bosses elsewhere.

The Floating Production and Storage Platforms (FPSOs) operated by the foreign multinationals that are in joint venture with the NNPC litter the nation’s deep and ultra-deep offshore arena. How do we monitor what they produce and export?

Let nobody come with the trash of “does the Department of Petroleum Resources (DPR) not supervise production and loading activities of the foreign operators” because I have a working knowledge of how the supposed supervision is done in such facilities. The DPR staff that are supposed to police those facilities, how do they normally go to such facilities for inspection and monitoring? For God’s sake, when are we going to be serious as a nation of people?

Nigeria’s current official production figure is somewhere between 1.7 and 1.85 million barrels per day (bpd) while the nation has confirmed capacity to comfortably produce over 2.5 million bpd. This gap is one of the areas to keenly watch if we are serious about solving this problem of crude oil stealing. Are the multinationals producing more than what they tell us since the capacity to go beyond the figure they usually dangle at us exists in the various oilfields owned/operated by these companies?

What is the federal government/NNPC doing with the allegations that several oil platforms in the Gulf of Guinea (near-shore Cameroun, Ghana, Equitorial Guinea amongst several others are burgeoning on crude oil received from Nigeria which they export as their legitimate produce? Also, what has the federal government done with the allegations even by a House of Representative Committee that service chiefs and military Generals particularly in the Army and Navy both serving and retired are the backbones behind crude oil stealing and export in Nigeria?

There are footprints everywhere to show that the foreign multinational oil companies in collaboration with some “powerful Nigerians” are defrauding the country in their handling of crude oil produced within our oilfields. The cases filed against the Nigerian subsidiaries of U.S. multinational oil corporations including Chevron, the Anglo-Dutch concern, Shell, Italian ENI’s Nigerian Agip, France’s Total and Brasoil of Brazilian Petrobas are just sample prototypes of what these companies are doing in collaboration with top NNPC managers to deny Nigeria of its supposed earnings from oil produced in the country.

As said in the documents tendered at the High Court in Lagos, “some shiploads registered less when they left Nigeria and more on reaching the United States, while some entire shiploads were undeclared in Nigeria.” The U.S.-based ImportGenius database was used by attorneys to confirm declarations made to U.S. customs by shippers and importers.

Most times, what oil tankers declare they load at Nigerian ports is far lower than what the vessels discharge on arrival at ports in the USA. These were facts established by the Nigerian government-commissioned team of experts. And as explained by the federal government’s legal team in its deputations, “the significant crude oil theft for which due payment is being sought by the nation, takes the form of accounting fraud, non-declaration or under-declaration of crude and gas cargoes”.

But our Lagos High Court in its wisdom or is it dubiousness, opined that there was no enough evidence against the culprit foreign oil companies and thus dismissed the case outrightly despite the fact that facts and figures of the cases were duly presented to buttress the federal government allegations. Until today, has the federal government appealed the ruling? I’m not very sure and this is our country for you! God bless Nigeria!


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