Oil Producers Call for Decisive Action against Crude Oil Theft

Eromosele Abiodun

Oil producers in Nigeria have called on the federal government to urgently tackle the menace of oil theft in the Niger Delta, which is impacting negatively on their operations.

Hard hit are the indigenous producing companies who told THISDAY that the giants strides recorded over the years in gaining foothold in Nigeria’s upstream oil sector, were gradually being eroded by oil theft which is aided by the rising crude oil prices in the international market.

“People are making petrodollars on the high seas, while we are experiencing fall in production volumes,” said an indigenous oil producer last week. The price of the international benchmark, Brent Crude, for a better part of 2021 and this year has been above $70 per barrel mark, jumping 7-year high to over $100 per barrel last week.

“Nigeria’s Bonny Light, a favourite of refineries, and the country’s other blends are also selling within that range. The thieves are cashing in on rocking prices and there is a noticeable presence of barges and vessels in the creeks loading stolen oil from pipelines and transporting to large vessels on the high seas, ”said a producer who do not want his name in print.

Also, the President of the Independent Petroleum Producers Group, the umbrella group for indigenous oil producers, Abdulrasaq Isa lamented the challenges of the theft.   

“The key challenges now are in the areas of security and high operating costs. ’’We look forward to the government in finding long-lasting and sustainable solutions to these challenges,” Isa said.

Industry sources explained to THISDAY that usually, crude theft is highest just after the flowstation, as this is after primary treatment and so the flow is at a higher quality, easier to handle by the crude refiners.

One of them painted a grim picture of the prevalence of the theft. He said, “the ENI-operated pipeline to Brass terminal appears to be a favourite of many oil thieves; the AITEO Nembe Creek Trunkline is also recording heavy losses; Chevron’s production to Escravos suffers losses too; and to some extent, the TransForcados pipeline. ExxonMobil offshore line to Qua Iboe Terminal is perhaps the least affected because they produce and transport their oil offshore.”

Collaborating, an executive of an international oil company, who does not want to be named because of sensitivities involved, said while there is so much talk about oil spills like the recent one caused by sabotage at Santa Barbara in Bayelsa state, much more oil revenue is lost to the sale of stolen oil on the high seas, where the major challenges lie.

Illustrating the crime pyramid in the Niger Delta, a former Director of Shell Nigeria, who also lamented the situation, said it has many layers. “It’s not the boys in the creeks that are at the helm. Those boys cannot arrange the complex logistics, including transshipments to mother ships offshore and eventual export of the stolen crude. Obviously, some highly influential persons are involved.”

According to the immediate past Director General / CEO of Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, “It is estimated that 80 per cent of the stolen oil is exported, while the balance of 20 per cent goes into illegal refining in “refineries” dotting the landscape of the Niger Delta creeks.”

Recently, the Eastern Naval Command of the Nigerian Navy disclosed recently that it had deactivated 175 illegal refineries while arresting 27 vessels under 11 months in its areas of operations in 2021.