Crude Oil Theft: Does Nigeria Know The Actual Volume It Loses Per Day? By Ifeanyi Izeze

When a nation of people is given to trifling or undue flippancy,
it shows in everything that concerns such a country. How can
we explain to decent minds or rather serious peoples outside
this country that Nigeria, in all honesty, does not know even
with a near-certainty, the amount in terms of volume of crude
oil stolen from its facilities on daily basis? The federal government does not know; the nation’s apex oil
concern and our representative in the oil and gas sector, the
Nigerian National Petroleum Corporation (NNPC) does not
know; our security agencies cannot tell; and even the foreign
multinational oil companies either do not know also or are trying
to play politics with figures of stolen crude for selfish gains
and to blackmail the government. Haba! Na so country dey
run?
Government says one thing, the foreign operators say a
different thing, the NNPC has its own ideas, and ofcourse the
politicians depending on the side of the divide they talk from,
throw more confusion into the jig-saw puzzle. It is a big shame!
Is it deliberate mischief or a true lack of accurate information
that not even the producing oil companies could stick to
figures? Is it not shameful or rather criminal that the gulf
between some of the figures thrown to the public as stolen
crude oil are so wide they could swallow even the public trust on
this whole thing?
It has been severally alleged and corroborated by some who
should know the truth, that some of the figures out there on
crude oil theft are very unrealistic and overtly exaggerated
for purposes that span from corruption, politics, blackmail to
outright gullibility or do we say ignorance of the ruling class.
The chairman of the federal government taskforce on crude oil
theft, Emmanuel Uduaghan, governor of Delta State, while
speaking at an African Business Roundtable workshop on
combating emerging threats held on the sidelines of the
recently-concluded United Nations General Assembly in New
York, said “The persistence of crude oil theft in the Niger
Delta region where over 400,000 barrels per day are stolen may
threaten world peace and democracy if concerted action is not
taken to curb it.”
Also, the Coordinating Minister for the Economy and Minister
of Finance, Ngozi Okonjo-Iweala, in one of her numerous
appearances at the House of Representatives Joint Committee
on Appropriation/Finance in Abuja also had it on record that,
“We are losing revenue; 400,000 barrels of crude oil are lost on
a daily basis due to illegal bunkering, vandalism and production
shut-in.”
Her words: “I have to clarify that it is not as if the entire
400,000 barrels is stolen, no. What happens is that whenever
the pipelines are attacked and oil is taken, there is a total
shutdown. All the quantity of oil produced for that day will be
lost because it means government cannot sell it and it means a
drop in revenue.”
Of course, the above clearly show that those in government
believe the nation loses about 400,000 barrels of oil every day
to thieves. How and where they got this figure is at best
blurred and at worst obscured because those who should be
giving the government figures of produced crude oil (available
plus stolen), have different ideas.
The former Group Managing Director of the Nigerian National
Petroleum Corporation (NNPC), Andrew Yakubu, before he was
removed had said that “in 2013 alone, the country lost 300,000
barrels of crude oil per day (bpd).”
The Nigerian Navy through the Director, Nigerian Navy
Transformation Office, Austen Oyagha, declared recently in
Calabar, Cross River State, that “the country lost an
estimated average of 55,210 barrels per day or monthly
average of 1,656,281 barrels in 2013. Thus, Nigeria oil losses
due to crude oil theft translate to almost $20 billion yearly in
deficit to Nigeria’s economy. These losses do not only
undermine Nigeria’s economy in terms of foreign exchange
deficit, they also pose a threat to national security for
Nigerians.”
Shell Petroleum Development Company of Nigeria (SPDC), the
company believed to be worst hit by this menace of crude oil
theft, also has not helped the matter not to talk of helping
itself. At every opportunity, the company throws figures
around as if they don’t know what they produce and what got
missing from what they produced.
The company’s managing director, Mutiu Sumonu, who was
represented by the company’s Ogoni Restoration Project
Manager, Augustine Igbuku, had cried out at the recently
concluded Delta State oil and gas stakeholders conference held
in Warri that “as much as 150,000 barrels of oil were being
stolen each day from Nigeria, adding that most of the oil was
illegally shipped and sold in international markets, while some
quantities of crude were being refined along the creeks.”
Meanwhile, in another setting (Shell 2013 annual report) the
same Shell said, “In 2013, the number of spills from the
company’s operations caused by sabotage and theft increased
to 157 from 137 in 2012, whilst production losses due to crude
oil theft, sabotage and related temporary shut- in. On the
average, around 32000 barrels per day (bpd) were stolen from
SPDC pipelines and other facilities, whilst joint venture lost
production of around 174000bpd due to shut downs related to
theft and other third party interference.”
If Shell cannot harmonize the overall loss in terms of accurate
quantity of its produced oil, then, there is something not very
transparent in these crude oil theft campaigns by the Anglo
Dutch operator.
By its own derivation, the London-based research group
Chatham House believes “Oil is being stolen on an ‘industrial
scale’ in Nigeria and the country’s politicians and security
officials are among those profiting…” Chatham House
estimated that “an average of 100,000 barrels is stolen daily.”
Who gave the Chatham House this figure-Shell, NNPC or the
federal government?
The conflicting figures of actual loss in terms of volume of
crude oil no doubt also reflects in the conflicting estimates
with regards to the amount of losses in revenue terms due to
crude oil theft and this is where foul play is seriously
suspected.
Could there be a deliberate over-blowing of the actual
quantity of crude oil lost to thieves for pecuniary reasons by
the foreign multinational operators of the NNPC joint
ventures?
Could some of the operators be deliberately aiding the stealing
of crude oil from their facilities to ultimately create a
situation where they can defraud the NNPC in sharing of
produced crude or proceeds of it?
Are the operators of the sector dangling conflicting and most
times unrealistic figures to blackmail the federal government
and NNPC especially as some of these operators are hell-bent
on establishing the impression it is no longer safe to do business
in the Nigerian onshore and near-shore arena at least to
justify their fake divestment? How can you divest from one
part of a zone and turn around to beg to invest in another
part of the same “unsafe terrain”? is this not deceit?
Royal Dutch Shell disclosed recently that during its 2013
financial year, it lost about $1 billion to crude oil theft and
various oil and liquefied natural gas disruptions in its Nigerian
operation.
Few days later, Shell Nigeria rebutted the claim describing it
as incorrect. So how did the parent company got the figures
that generated what was released as the total loss in the
Nigerian operation? The statement by Shell Nigeria went on to
indicate that the actual amount lost to operational difficulties
in Nigeria was $250 million. So how do you reconcile this?
The big question the federal government should answer is: how
much crude oil in terms of volume does Nigeria lose daily to oil
thieves? Shut-ins cannot be the same thing as produced and
stolen crude. Is it not curious that the federal government
dangles the highest figures as stolen crude? What do they
want to achieve by jacking up figures from the NNPC and the
IOCs?
The NNPC and its joint venture partners are supposed to know
what each operator pumps out daily and from what well, field
and through what flowstation to the export terminals or to our
refineries. So we are not talking of the oil we did not produce.
Nigerians would want to know what the nation is losing
everyday deducting from the actually produced volume. At
least, all the stakeholders in this crude oil stealing thing- the
federal Government/DPR, NNPC, and the operating IOCs
should for transparency or rather for decency sake meet and
harmonise their figures because the current situation has
become very embarrassing.

IFEANYI IZEZE lives in Abuja and can be reached at iizeze@
yahoo.com.