Presidency Vs IOCs On Oil Theft: The Truth Is Gradually Coming Out By Ifeanyi Izeze

It all started when the Managing
Director of Shell Petroleum
Development Company (SPDC) Mutiu
Sunmonu, said in Abuja that instead
of gallivanting to European and other
foreign countries to seek for help on
tackling crude oil theft, the Goodluck
Jonathan administration should move
against “principalities and powers in
high places,” who are the sponsors of
crude oil theft in the Niger Delta.
Mr. Sunmonu, who made the
statement at the recently concluded
Nigerian Oil and Gas (NOG) 2013
Exhibition and Conference, compared
the stolen crude business to the drug
business that had couriers, small
dealers, and sponsors. The Shell boss
said though it is commendable for
Nigeria to take the initiative to
discuss with foreign countries
suspected to hold the proceeds from
the sale of stolen crude oil, the
problem can be easily solved if the
sponsors are found out and dealt with.
His words: “The truth is that the small
(criminals) in the creeks of Niger
Delta bursting pipelines and stealing
crude oil are not working for
themselves. Like the drug cartels
around the world, they are being
sponsored by big principalities and
powers in high places, which the
government should go against if the
fight against crude oil theft is to be
won.”
The Shell man’s outburst obviously did
not go down well with the Presidency
which through the Special Assistant to
the President on Amnesty, Kingsley
Kuku responded and point blankly
accused multinational oil companies of
complicity in the increased spate of
crude oil theft in the Niger Delta
saying the companies are aware that
their employees engage in oil theft in
the Niger Delta region and do nothing
about it.
He said “The best you can find the
level of Niger Delta people or some
merchants of this trade are those
doing menial jobs in it.
“You will need high grade vessels and
where you cannot load your illegal or
oil theft, you are definitely going to
find yourself in a mess where you will
have to pay huge sum for demurrage,
how many Nigerians have the capacity
to do that? Very few people,” he said.
“So it is an international crime, I have
never heard about any governor being
involved. I know of one thing and this
is the bombshell that there are
workers in the oil and gas industry
who have the expertise, who have the
technical knowhow, who know about
the ways and means of sabotaging the
oil and gas industry, who are likely to
be involved.
“I also know and this is critical and I
know that a lot of multinationals will
be angered by this but their being
angry is not a bother to me but what
bothers me is about oil theft that is
affecting the revenue of this country,
that is affecting the environment
that I am from, that is very key for
me.
“So you have a situation where some
pipeline protection contractors
empowered by the oil companies, this
is not about NNPC, is not about PPMC.
You know almost every oil company
has a pipeline protection contract,
pipeline surveillance contract for local
security contractors. The same people
who are meant to be securing these
pipelines participate in oil theft. So
the oil multinationals must look
inwards to their contracting process,
their procurement process, look at the
status of some of their vendors and
security contractors, x-ray them,
review their processes very well and
deal with the issue of oil theft as it
affects participation in house in the
oil and gas industry.”
At least this is the first time we are
getting frank engagement from the
two major culprits in this
embarrassing menace of crude oil
theft.
And from the exchange between the
Presidency and the multinational oil
companies, both sides agree that
there is a problem which is purely
criminal and borders on economic
sabotage or rather financial crime.
Also, both sides agree that highly
placed individuals and groups (both in
government and the oil companies)
sponsor those stealing the nation’s
crude oil.
The multinational operators strongly
believe the “government people” are
involved in the scheme while
Government as expressed, also
strongly believe staff of the
operating companies are solely
responsible for the high tech tapping
and haulage of stolen crude from
their own facilities across the Niger
Delta.
Question: Why are the multinational
operators particularly Shell, Agip and
Chevron refusing to share whatever
intelligence they have with the Police,
SSS, Navy or at worst with the NIA or
even the DPR? Is it not curious that
the multinationals claim they bear the
highest brunt of this criminal activity
and yet are not ready to go all out to
expose those suspected to be behind
the various cartels running this crude
oil stealing racket?
These same foreign oil companies have
deliberately refused to tell us exactly
how much oil and gas they pump out of
our grounds every day. They have also
refused to transparently say whether
all they pump out on daily basis is how
much they declare. All the figures of
the volume of crude oil stolen from
the Niger Delta that we are being
bombarded with on daily basis are all
“plays.” Why has it become a hide and
seek thing for the operators to say
for certain what they lose to these
thieves (both the human small thieves
and the ghost big ones)? By training,
I know very well that from every oil
well completion data and production
history and at every giving point in
time, the owners of the well know for
sure what comes out of every oil well
on daily basis and knows what to
expect at the flow stations from all
the wells in a field. They know how
much crude oil and how much
formation water expected to arrive at
each flow station before separation/
scrubbing because the fluid flow is
metered in their operation at least till
the crude oil gets to the export
terminals where so many other
manipulations happen.
So who is fooling who?
Is it not curious that the oil thieves
don’t burst pipelines carrying mixture
of crude oil and formation water? So
they know which segment of the
pipeline route (the lines linking flow
stations to the export terminals) to
burst to get pure oil? Can anybody
say this is not being done with the
collaboration of people who are
knowledgable of production and
metering operations? It is not a lay
man’s thing because the oil thieves
don’t have flow stations to separate
oil from water and even dissolved gas
before loading into barges. If it did
not take much for the Nigerian
Maritime Security and Administration
Agency (NIMASA) to block NLNG
vessels over the recent tax rift, why
has NIMASA been looking the other
way while oil thieves load their vessels
offshore with crude stolen from
facilities onshore and nearshore?
That means the oil operators may be
true after all in accusing
“principalities and powers” in, around
or near government particularly the
Presidency. This is not a Jonathan
thing because this crime has been on
well before Jonathan became
president so anybody trying to play
politics with this is only trying to be
mischievous. If you say the scale has
changed, so what was it before? Abeg
make all of una go rest!

IFEANYI IZEZE is an Abuja-based
Consultant and can be reached on:
iizeze@yahoo.com; 2348033043009)