How to avert loss of N995 billion annual crude theft, by NNRC

Nigeria may continue to lose an estimated N995.2 billion yearly to crude oil theft except the Federal Government adopts efficient technology in metering and mapping movement of crude from extraction to exportation.

The Federal Government should also enforce stringent penalties for oil thieves and their collaborators across the country.

This was the view of Niyi Awodeji, who presented a report on oil theft by the Nigeria Natural Resource Charter (NNRC), during an advocacy against crude oil theft and stakeholders engagement seminar organised by the New Nigeria Foundation (NNP) in Port Harcourt, Rivers State.

He argued that combating crude theft would not only end the loss of N995.2 billion yearly, but would result in increased oil production, export and revenue, thus paving way for economic diversification and investments.

Awodeji said Nigeria continues to suffer oil theft due to under-declaration or underestimation of barrels received at any point of the extraction process so that the perpetrators could sell the rest in the black market.

He also identified inflated volumes from drilling, through production to receipt at the refinery allowed for by the oil industry saying this led to white collar’ crude theft by oil companies, as the practice occurs mainly at tank farms, refineries and distribution centres owned and operated the companies.

He alleged that oil companies also under-declare crude oil production to avoid paying petroleum profit tax, stressing that due to this the Federal Government sued Shell for $407m in 2016 for under-declaration between 2013 and 2014.

He revealed that there were also 15 other suits against 15 oil companies for $12.7 billion.

Awodeji also stated that crude oil theft occurs in the course of vandalism of infrastructure to divert oil from its intended destination.

“Between 2003 and 2013 there were 15,685 pipeline breaks caused by vandalism, while in 2016, Shell reported daily loss of 5,660 barrels per day (bpd) just as most of the siphoned oil were refined locally in firewood refineries,” he added.

On oil bunkering in the Niger Delta and the method applied by crude oil thieves, Awodeji said small ships often anchor near pipelines, drill and siphon crude, which is then taken to larger oil tankers on the high sea.

“The process is repeated multiple times till the tanker is full. There are usually multiple siphoning points with hoses up to 2km used and barges can take between 3,000 to 18,500 barrels of crude, while tankers can take from 31,000 to 62,000 barrels of crude,” he said.