Oil Theft: Messy Blame Game Continues As Nation Bleeds

Weneso Orogun And Juliet Alohan
— Sep 7, 2014 | 1 Comment



Nigeria’s public treasury has continued to bleed as stakeholders trade blame over who is stealing oil in the country and what quantity is actually stolen. Oilprice.com, an online publication, reported last year that Nigeria was losing an estimated 400,000 barrels per day, citing figures attributed to Nigeria’s coordinating minister for the economy and finance minister, Mrs Ngozi Okonjo-Iweala.

The large volume of oil allegedly stolen on a daily basis last year was equivalent to a revenue loss of about $1.7 billion a month and $20.4 billion annually. This earned Africa’s largest economy the No. 1 position among countries most plagued by oil theft in the world ahead of Mexico, Iraq, Russia, and Indonesia. The amount lost by Nigeria annually was reported to be more than the country spent on education and healthcare combined.

According to data provided by the chief of naval staff last week, daily oil theft in Nigeria is on the decline, from 2.6million barrels per month or 84,000 barrels per day in January 2014 to about 900,000 barrels per month or 30,,000 barrels per day in June 2014.

Speaking against the backdrop of the declaration last week by the chief of naval staff, Usman Jibrin, that international oil companies are guilty of the practice, Nigeria’s representative on the global board of the Extractive Industries Transparency Initiative (EITI), Faith Nwadishi, said the IOCs cannot be exonerated from alleged culpability in oil theft.

She said the fact that they have refused to meter their facilities to determine the actual crude production and what was being lost points an accusing finger at them.

She said: “I have been saying this and am glad someone has brought it to the fore. There’s no way the IOCs will say they can’t do something about crude theft; the fact that they don’t have meters at their facilities points a finger at them.

“Our agencies can’t be exonerated; if we are pointing one finger at the IOCs, we should be pointing four at our own agencies. If the IOCs do what they are supposed to do and our agencies do what they are supposed to do, oil theft won’t be happening.

“But a situation where the DPR depends on the IOCs to provide them with logistics to carry out inspections is a shame. What manner of inspections will they carry out?”

In his reaction, international energy analyst Dan Kunle said the blame game was unnecessary as the IOCs have done well in ensuring the success of Nigeria’s oil and gas sector. According to him, ensuring that wellheads are properly catered for and that the facilities are metered to determine the actual crude production is the responsibility of the DPR.

Kunle wondered why the IOCs who calculate their profit and losses by the seconds would be accused of not doing enough in the fight against oil theft or leaving their wellheads not catered for.

He said: “How will efficient companies like the international oil companies that calculate their profit and losses by the seconds leave their wellheads un-catered for? Is it not DPR who should meter and calibrate the meters and sign off daily on production of crude?

“In all the operations of the IOCs, the DPR, the National Petroleum Investment Management Services (NAPIMS) as well as the Nigerian National Petroleum Corporation (NNPC) are there; so this blame game is unnecessary.”

According to Kunle, the failure recorded so far in the oil and gas industry should be put on the NNPC, which is the bigger shareholder in the Joint Venture (JV), and the DPR for not handling their responsibilities well.

He said the IOCs should rather be commended for the successes so far recorded in the sector, and for staying on despite the difficult terrain of operations