18th April, 2013
The rising incidence of oil theft, pipeline vandalism and other economic sabotage undermining oil production in the Niger Delta betray the Federal Government as spineless in its avowal to successfully battle the scourge. Rather than yield any meaningful result, President
Goodluck Jonathan’s stated resolve and security tactics have merely led to an unprecedented larceny by the oil thieves. Available records have put the quantity of oil stolen in the Niger Delta in 2012 at 350,000 barrels per day, representing 45 and 67 per cent rise over the figures for 2011 and 2010 respectively.
These figures may not be fool-proof due to a lack of sufficient baseline statistics on the actual quantity of stolen crude, quantity lost to pipeline vandalisation, as well as other criminal conspiracies against oil production in the country. The implication is that the situation could be grimmer due to the alleged involvement of high-ranking government officials, politicians, operators and security agencies.
The situation peaked recently, forcing the two oil majors in the Nigerian National Petroleum Corporation, NNPC, upstream Joint Venture Agreement, JOA, to declare a force majeure regarding crude oil liftings. One of them, Shell Petroleum Development Company of Nigeria Limited, SPDC, was compelled to shut down the critical Nembe Creek Trunkline, NCTL, Bayelsa State, on 15 April to remove illegal connection taps to the trunkline, and consequently halt lifting of the product at its Bonny Light export.
The implication is that the country’s daily oil production is short of 150,000 bpd. According to an official statement by SPDC, the 97-kilometre NCTL pipeline had been closed severally between December 2011 and May 2012 due to oil theft and pipeline vandalism.
Similarly, Nigerian Agip Oil Company NAOC, in March, halted oil lifting at the Brass terminal and suspended its activities in Bayelsa State due to intense illegal bunkering and the vandalisation of the Kwale-Akri-Nembe-Brass oil delivery line. Undoubtedly, the unwholesome activities in the creeks of the oil region has the capacity to inflict a devastating economic paralysis on the economy. Already, the country had, in three months, lost an estimated N191bn in revenue, while it was reported to be losing some $6 billion yearly. This is against the backdrop of purported rise in the cost of oil production, which climbed from 4 dollars per barrel to about 35 dollars, while daily production slipped down the slope.
It is scandalous that the situation has worsened beyond the pre-amnesty days. There is perception that the Federal Government lacks the capacity, well thought-out policy and will to tackle oil theft. Instead, the government has resorted to prebendalism and divisive allocation of oil and oil-related contracts to cronies and ex-militants.
Despite the strategic concessioning granted Global West Vessel Specialist Agency, GWVSA, a company believed to be owned by Tompolo, by Nigerian Maritime Administration and Safety Agency, NIMASA, in securing the country’s coastline, crude oil theft and vandalisation has continued unabated in the region. The government may have merely given “jobs to the boys”, while the problem persists.
Our qualms is that the Navy, which is constitutionally empowered to secure the country’s waters, could have been better equipped to perform this role. By and large, the Federal Government is the author of the shenanigans, as it has continuously shown unrepentant impudence, dishonesty and crass corruption in the management of oil revenues. Despite reports of the different panels set up to look into the oil sector, particularly, upstream sector, government has adopted knee-jerk approach to their consideration, let alone implementation.
The present occupier of Aso Rock should decisively bring full military might and carefully planned intelligence network to bear on the oil brigands. Afterall, the most hurting darts dealt the economy through oil theft is happening right in the President’s state of Bayelsa.
We urge the Federal Government to initiate meaningful reforms, strengthen security operations and engage constructive international diplomacy within the international community to stem the activities of oil thrives. Since the stolen crude is sold at international markets, deployment of effective diplomatic tools could curb the menace.
The local content policy must be deepened so as to encourage indigenous participation and job creation. Moreover, Government must encourage higher investments in the sector, technology transfer and provide an enabling and secure environment for investors to work. It is essential that a Marshal Plan be properly worked out on the development of the Niger Delta, while environmental degradation must be tackled to bring prosperity to the blighted region and its people.