The historic step taken by the Nigerian National Petroleum Company Limited (NNPCL) to launch an onslaught against oil theft which had ravaged oil production capacity is fast paying off as oil production has risen to 1.59 million barrels per day (bpd) in the first week of December from less than a million earlier.
Through the provisions of the Petroleum Industry Act (PIA) 2021, NNPC Ltd transited from the defunct Nigerian National Petroleum Corporation to the new NNPC Limited and ready for increased profitability on behalf of the over 200 million Nigerians. However, this single quest has been hampered by massive oil theft, prompting the company to take a historic action.
In the later part of this year, the Group Chief Executive Officer of NNPC Ltd, Malam Mele Kolo Kyari, launched the crude oil monitoring system and platform which, he said, is to enable citizens to contact the company on cases of suspected oil theft and vandalisation around oil communities.
Kyari said, illegal activities around oil assets including illegal refineries, insertion on oil pipelines, among others have caused a huge shortfall in oil production with the situation getting worse this year. Before the onslaught against the oil thieves, Nigeria was estimated to be losing over 200,000 barrels per day (bpd) of crude oil; cutting production capacity to just 1.1 million barrels per day (bpd) from a 1.8m bpd quota assigned to Nigeria by OPEC.
One action from the NNPC Ltd was the engagement of a private surveillance firm, Tantita Security Services Nigeria Ltd managed by ex-agitator, Government Oweizide Ekpemupolo popularly called Tompolo, on August 13.
The firm, which has its base in the Niger Delta, worked with security operatives to comb the areas and to the surprise of Nigerians, massive discoveries of illegal activities were made.
It was revealed that over 68 vessels involved in crude oil theft have been arrested, while 638 illegal refineries out of 763 have been destroyed, as well as several arrests made.
Beside Tompolo’s company, two other contractors were engaged in executing the pipeline surveillance activities to ward off oil thieves.
“We have another contractor called Maton Engineering that is responsible for Brass and all the central areas and we have the pipeline infrastructure responsible for the East. So, there are three contractors based on the sectorisation of the region and each one of them is reporting.”
As the NNPC Ltd’s feat got credence from Nigerians, the perpetrators devised means to frustrate the scheme. The GCEO of NNPC had in November revealed alleged threat to his life over his role in curtailing the theft of oil running into trillions of naira in the country.
Speaking during a function in Abuja, Kyari said such threat would not dissuade him from embarking on the task of repositioning the oil and gas sector in the country as he justified the decision to engage the oil pipeline surveillance team to curtail the massive theft of oil in the country.
Kyari said: “The scale of oil theft that we have seen was not anticipated, not expected, not thought of. The scale is enormous. We have seen pipelines taken from our main trunk lines into abandoned platforms in which people come to steal oil.
“We have seen the thousands of illegal refineries that we have taken down in the last four to five months. We have seen up to 295 illegal connections to our pipelines and many of them have been there for years.
“Companies would stop injecting oil if they discover it can’t get to the terminals,” the NNPC boss explained.
On the implications of oil theft to the Nigerian economy, Kyari said: “From our records, before we recovered, we were losing 700,000bpd, translating to 21 million barrels per month, and if you consider an average price of this year at $90/barrel, that will translate to somewhere around $1.8bn or $1.9bn losses that we suffered.”
Production rises to 1.59m barrels daily
From the first week of December, crude oil production in Nigeria has increased to 1.59 million barrels per day, according to the GCEO of NNPC, Malam Mele Kyari.
He disclosed this while speaking on ‘Crude oil production and theft containment control’. Records in November show that crude oil production rose to 1.47m bpd but the latest disclosure far surpasses that by 12m bpd.
In August, crude oil theft forced Nigeria’s production down to 1.1 million barrels per day, far below the OPEC quota for the country. By implication, crude oil theft cut the contribution of foreign exchange earnings from crude oil export from 90 per cent when production was high to 78.5 per cent as of the third quarter of 2022.
Crude oil export as of the third quarter of 2022 was N4.65 trillion down by 21.15 per cent from the N5.907trn recorded in the second quarter of 2022, according to the National Bureau of Statistics ‘Foreign Trade’ report published this week.
But compared to the Q3 of 2021, the crude oil exports rose by 15.7 per cent as against to N4.02trn recorded.
Speaking about the oil theft onslaught, Kyari said: “What I would like to say is that all the security, together with the operators, are now working in sync to address this menace.
“The new security architecture is a structure laid on technology. What it does is to bring together the security and intelligence agency in one table, the regulators in the other and then bring in what was zero, the community into the other angle; and without the community, we can’t achieve that.
“Today, we are able to dictate, detect and we are able to respond. The success that we recorded today was essential because of this improved security situation.
“We are now almost at an average of 350,000 to 400,000 barrels/day increase. At a certain level, we recorded up to 450,000 barrels/day increase in the given year.
“That is why you can see we are now from 1.1mbpd daily to about 1.59bpd as of this morning. So, these are some of the things that we are able to record based on the new security architecture.”
The GCEO assured that with the collective resolve of private securities and government securities, there would be further improvement in crude oil production which would, in turn, reflect in foreign exchange earnings.
On measures that will protect the new security architecture from sabotage, he said the NNPC has a clear understanding of the importance of relationships with host communities in protecting oil assets in the long run.
He said, “We have incapacitated almost about 70 per cent of what we have identified and we will keep identifying some of them. It is mind-boggling what we discovered even as operators and every one of us saw the kind of sophistication where illegal connections are put on every major trunk line including directing export lines on Forcados.
“It couldn’t have been possible without the collective resolve of the private security guards anchored by the communities. We have short-medium and long-term visibility. I can tell you we have succeeded to an extent to stop this menace,” said the GCEO.
NNPC to reopen more crude trunk lines
One thing is certain, Kyari said the system and technology have come to stay, adding that it is improved upon on a daily basis. As the company along with its partners clear the security issues, more crude oil pipeline trunks will be reopened to boost production and export, returning Nigeria to its lost days and rising more.
NNPC has almost restored the Trans-Niger Pipeline to its full capacity and is working to restore other lines.
Kyari said: “We are hoping we will open Bonny very soon. The security situation is now restored together with certain activities that have been carried out to revamp what we see in Forcados; and Forcados is back producing.
“Bonny will soon be back. Trans Forcados is back, Trans Escravos is back, Trans Remos is back. Even as I speak to you today, we are still having some of those volumes from these lines.”
For the perpetrators of these heinous crimes, the GCEO said besides the arrests, the government, especially financial intelligence agencies, is tracking the funds while prosecuting them according to the law.
“Sometimes, when you go too quickly, you tend to compromise certain things and I believe in the details and diligence that are being implemented. It is not whether or not those people will be named. The people will be named,” he also stated.
The GECO of NNPC reiterated the commitment of NNPC Ltd towards the guarantee of energy security, adding that as things stand, it is left with no option than to sustain the subsidy regime to make fuel affordable to Nigerians.
