Sylvester Idowu in Warri
A consultant to the Nigeria Natural Resource Charter (NNRC), Mr. Niyi Awodeyi, has disclosed that about N995.2 billion is lost annually due to crude oil theft.
Awodeyi, which said the amount was discovered in a recent findings, also estimated that N3.8trillion was lost in 2016.
Awodeyi, who also quoted a World Bank report stated that 80 per cent of crude oil revenue in Nigeria was in possession of just one percent of the country’s population, stated that the award of security contracts, “gave the actors access to the pipelines”, with surprise increase in crude oil theft.
The oil and gas expert who spoke, during a stakeholders’ engagement seminar on advocacy against crude oil theft, organised by New Nigeria Foundations (NNF) opined that the multinational oil and gas companies don’t follow International best practices in their operations in Nigeria.
According to him, at least 50 per cent of the diesel used in Nigeria, especially in the Niger Delta, comes from local refiners, while 1,500 cases of pipeline breaches are reported per year.
Awodeyi, also disclosed that the NNRC report showed that proceeds from crude oil theft were used to fund militancy and criminal ventures, noting that when the price of crude oil fell to between $30 and $40 per barrel, crude oil theft reduced and when militants wanted to renegotiate their payment, crude oil pipeline vandalism increases.
While stating that over 10 per cent of the Niger Delta “is contaminated” due to crude oil theft, Awodeyi noted that an extrapolated cost of $3 billion would be needed to clean up the region.
The Manager, Upstream of Department of Petroleum Resources (DPR), Warri, Ogbeni Bright Efe, while speaking on strategies to prevent crude oil losses, identified crude oil fingerprinting, collaboration with security agencies, licensing of all operating pipelines and enforcing all spill incidence reporting as measures being taken by the regulatory agency to reduce crude oil theft in the country.
A representative of Delta State Ministry of Oil and Gas, Godwin Oziboro, acknowledged that illegal refining and pipeline vandalism had been major threat to the economy of Delta State and Nigeria at large, blaming the crime on poverty, corruption, ineffective enforcement of the necessary law and poor governance.
An official of New Nigeria Foundation, Layide Adesanya, in her opening remarks, spoke briefly on the negative impact of crude oil theft on the economy and the need for all stakeholders to embark on extensive advocacy against crude oil theft.
It had been reported that roughly a quarter of stolen crude oil is sold locally. Illegal artisanal refineries located in Niger Delta “cook” the crude oil into separate petroleum products. The product yields two percent petrol, two percent kerosene and 41 percent diesel. The remaining 55 percent of crude goes to waste, most of which is dumped into the nearby water or into a shallow pit, resulting in environmental and health hazards.