Oil production in the country has continuously been interrupted by increased third party breach of producing assets on one hand and monumental theft of crude by yet to be named oil thieves.
However, the most recent data by the Organisation of Petroleum Exporting Countries, (OPEC), disclosed a big boost in oil production in Nigeria which was put at 1.34 million barrels a day in August.
The OPEC noted that Nigeria, which is pumping below its quota following a slew of disruptions and was permitted to increase and output rose by 80,000 barrels a day to 1.34 million a day following the restart of its Forcados terminal.
A presidential delegation that recently inspected key oil facilities in the Niger Delta region has revealed a scary clandestine cartel that has partially plunged the country into economic mess.
According to the delegation, Nigeria currently loses $4 million daily to crude theft, vandalisation of assets among others.
The country‘s National Security Adviser, Nuhu Ribadu, penultimate Saturday made the disclosure when he led a presidential delegation to inspect oil and gas facilities at Owaza in Abia and Odogwa in Etche Local Government Area of Rivers.
Ribadu, by his own assessment, said that Nigeria currently loses $4 million daily to local and international crude oil thieves and vandals daily.
According to the National Security Adviser, the activities of oil thieves and pipeline vandals have impacted negatively on the nation’s economy and are partly responsible for the rising cost of living in the country.
Ribadu said, “It’s unfortunate that few individuals would steal our common resources, and in the process cause unbelievable loss to both the nation, communities and the people.
“Nigeria has the capacity to produce 2 million barrels of crude daily, but we are currently producing less than 1.6 million barrels due to theft and vandalism of pipelines.
“So, we are talking about 400,000 barrels of crude oil going to waste with few criminals and economic saboteurs not even getting much out of it.”
He said that the operators of artisanal refineries collect a small quantity of crude oil when they break the pipelines while larger volumes of the oil are spilled on the environment.
He added, “The value of 400,000 barrels of oil today is about $4 million and every day, we lose this amount because of this irresponsible behaviour.
“If you multiply $4 million by 365 days – one year, you will see that it is a lot of money running into billions of dollars, ($1,460,000,000).”
Speaking further, Ribadu said, “Currently, the country is in desperate need of money as the Naira is continuously losing its value because we earn less money.
“If we earn more money, it will not only help strengthen our currency but reflect in everything, including cost of living in the country.”
He noted that President Bola Tinubu’s administration was concerned about the problem and was already taking actionable steps to address the matter.
He said huge investments made by the government in building infrastructures for the common good of all were being destroyed by few individuals, and in the process, destroying the environment.
He, therefore, called for a united front to tackle oil theft and end decades of attacks on the nation’s oil and gas infrastructures.
He said, “We are working hard with the security forces and those employed by the Nigerian National Petroleum Company (NNPC) Limited to secure our facilities and end this madness called oil theft.”
The Nigerian National Petroleum Company Limited, NNPCL, had in a widely acknowledged decision a few years ago, contracted the protection of the 87-kilometre Trans Forcados Pipeline (TFP) to an indigenous firm, Ocean Marine Solutions (OMS).
Since then there has been a major drop in activities of vandals which has helped to upscale crude production to meet OPEC quota.
Speaking with Journalists who recently took a tour of the creeks and stretch of the pipelines, Prince Benson Onuwaje, General Coordinator, Pipeline Infrastructure, TFP, Ocean Marine Solutions (OMS) said the initiative came into the line in April 2019 and since then, oil production has risen going by the NNPCL data and infractions on the TFP have significantly reduced to the barest minimum.
Onuwaje, said that the relationship between pipeline infrastructure and communities has been cordial just as he expressed hope that the new government would continue to support and strengthen the initiative.
„We hope the relationship between OMS and the communities will also be strengthened. Everyone is involved in securing this pipeline right from the elders, the women and youths.“
Onuwaje, continued, „When we started crude oil pipeline from Escravos to Warri in 2015, two weeks after we had issues with avengers, but in 2016, we cleared all the lines removing almost 86 valves in the PPMC.
„We were approached in 2018 that if we can help the government to clear OML 40 pipeline in Benin River which we started in 2018 and within four months we cleared the line removing 82 valves. The trans Benin River pipeline is a new line and before we started working on the line, anytime they pump oil, they get only 50 per cent, but when we cleared the line, they achieved full production.
We were also approached to rescue Trans Forcados in 2019 where we used six months to clear the line because they asked us to provide proof of consent to ensure we secure the line.“
He said presently, the NPDC and Heritage in Trans Forcados can testify that the work pipeline infrastructure is doing on combating crude oil theft and vandalisation is commendable. Delta State became the highest in terms of crude oil production in Nigeria
„We want our refineries to work and we would continue to secure more lines. The federal government has to come to the aid of the people where you have these pipeline infrastructure to ensure that they have their sense of belonging. For Trans Forcados we have employed 820 people and we have another 120 intelligent gathering officials we have engaged. If you look at Trans Escravos also we have 480 people we have employed and OML 40, Trans Benin River, we have employed over 300 people. We have been able to impact the lives of the youths and communities by creating employment opportunities. The federal government must also develop the communities so that they can have their sense of belonging.“ Onuwaje added.
Also, speaking the Special Adviser to the Delta State Government on Niger Delta Affairs, Griftson Omatsuli, said that the effect of the unnecessary vandalisation of the pipelines has a terrible impact on the economy, ecosystem, health, infrastructure and the aquatic life of the communities.
He said that the vandals have committed many atrocities that should not be encouraged.
He advised that the federal government should not think of withdrawing the services of all the surveillance companies on the pipelines, because if they do that, they will be opening opportunities for criminalities in the Niger Delta region.
„Whoever that is nurturing that plan, does not mean well for Nigerian oil companies producing in the Niger Delta region and government infrastructure. If they remove the contract, they would be creating an avenue for pipeline vandalisation and reduction in the federal government‘s revenue from oil sales.
„For all over six years since OMS began operations, the level of criminality has gradually reduced because we felt that the people involved in the criminal acts have been employed and empowered by OMS to guard these pipelines. This is why the federal government has been meeting up with the OPEC quota,“ Omatsuli said.
According to Smart Amula, Supervisor OML 40 Benin River Houses, „We started this work in November 2018 and so far so good, the pipeline infrastructure is working fine and we are working with NPDC. Since we began our operations, crude oil has been flowing very fine and we all are okay
He continued, „With the help of the communities, with the help of the Nigerian Navy and other regulatory agencies, we have been able to achieve all we have achieved so far.
„We commend President Bola Tinubu and the Governor of Delta State and every other party that are assisting us in this struggle. We have been able to reduce crude oil theft by at least 95 per cent. So far, so good we don‘t have any challenge, because everywhere has been stabilised and the oil has been flowing very well.“
LEADERSHIP reports that the decision on the contract was reached after consideration of huge losses recorded on the TFP and rigorous appraisal of the company’s impressive record of performance on the Bonny-Port Harcourt and Warri-Escravos crude evacuation lines.
According to the NNPCL records, Nigeria before the contract lost over $800 million to poor handling by previous contractors.
Our correspondent reports that the new contract which requires the contractor to pay for any damage to any inch of pipeline under its watch, which would offer immeasurable benefits to the NNPCL, its joint venture partners, the host communities and the entire nation.
Faced with massive losses in projected revenue, stakeholders in the TFP, were unanimous in the decision to seek better ways of ensuring reliability and availability of the line.
It would be recalled that in 2018, the country lost over 60 days of production due to incessant breaches on the TFP despite having a security contract in place.
In terms of production numbers, this translates to over 11 million barrels of crude oil which on face value equates to over $800 million in lost revenue to all the stakeholders in the matrix.
The NNPCL noted that no responsible business entity or administration would allow the level of haemorrhage to subsist without acting swiftly to protect the enterprise from further bleeding.
Based on the above scenario, Ocean Marine Solution was assigned to handle the TFP under the proof of concept arrangement which is yielding great results in the Bonny-Port Harcourt and Escravos-Warri crude evacuation lines.
Under this package, the surveillance company is obligated to protect the lines and bear the cost of repairs if and when there is any breach to the pipeline.
This arrangement is totally different from the old order where the contractor gets paid for surveillance duties and totally exempted from repair cost or any form of responsibility in the event of any line break or breach to the pipeline he is paid to watch.
On the huge cost of the new contract, the NNPCL described it as insignificant when placed side by side and value-for-money with the old arrangement.
The NNPCL had consistently dismissed the claim that the entry of OMS into the TFP would spell doom for the host community youths currently rendering sundry services to the old service provider as the OMS is obligated to engage youths in the TFP right-of-way in executing its mandate, thus reports of imminent loss of jobs by host community youths are totally incorrect and mischievous.
The Ovie of Ughelli Kingdom, His Majesty Ajuwe Wilson Ojakovo Oharisi 111, lending his voice while speaking with journalists in his Palace, commended the ongoing surveillance by NNPCL/OMS partnership and passionately appealed to the Federal Government to sustain the initiative and save the community from activities of vandals.
HRM, Oharisi, said that since the contract began there has been a major drop in pipeline vandalisation and other criminal activities as the contract has provided jobs to the youths.
LEADERSHIP reports that some retrogressive forces have been brazen in their effort to ensure the retention of the old order of sleaze and waste that poses real threats to the national economy and pushing to remove the surveillance of the TFP.
For decades, the Nigerian oil industry has been perpetually made a jungle of monumental rip-offs. Transparency and accountability have been sacrificed for opaqueness, conspiracy and corruption.
Stakeholders have noted the smear messages and campaign of calumny against the NNPCL and the Ocean Marine Solutions (OMS) Limited, and that Nigerians who are abreast of the development around the TFP would be most excited about the choice of OMS which is reputed for successfully eliminating illegal bunkering and oil theft on the Escravos – Warri and Bonny – Port Harcourt Crude Oil Pipelines.
Perusing its profile, there is no element of doubt in its capacity to put an end to the criminal abuse of another key part of our strategic national infrastructure and illegal racketeering by vested interests on the TFP must stop, and this could be done by such logical and audacious step as has been taken by the NNPCL to get OMS to secure the pipeline, some opinion leaders noted.
In the face of the unwarranted sponsored attacks against OMS, those who have a deep knowledge of the oil industry will even sympathise with the firm over the delicate nature of the latest contract and while the loss arising from illegal oil bunkering had always been shifted to NNPCL in the past, under the contract OMS is obligated to protect the lines and is accountable for any breach to the pipeline and losses of crude.
