NNPC Recommends Stiffer Sanctions, Legal Framework to Combat Oil Theft

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…says Nigeria losses $700m monthly

National Petroleum Company (NNPC) Ltd has said that Nigeria loses about 470,000bpd to oil theft, amounting to about $700 million monthly, and that it has been impacting on the country’s ability contractual obligations including meeting OPEC production quota.
The company said the losses, coupled with security challenges has hindered oil production in the largest terminal, Bonny, and other terminals.

During a tour of the facilities of the company last weekend,  the group general manager, National Petroleum Investment Management Services (NAPMS), Bala Wunti said the number of barrels stolen was very huge on a daily basis adding that about 270 barrels that were supposed to be loaded in Bonny terminal are no longer going to be loaded because of theft.

“If you’re producing 30,000 barrels a day, every month, you get 1,940 barrels. So what it means is that you can take it to 270 every four days, calculate it in a month; you will have seven cargos on a million barrels, that’s seven million barrels.

Also Read: Ex-Militant Tapped to Protect Nigerian Pipelines He Once Blew Up

“When you multiply seven million barrels by $100 that is $700 million lost per month, adding that about 150,000 barrels expected are differed, we are not producing due to security challenges,” he said
According to him, Shell Petroleum Company (SPDC) trunk line, TNP transnational pipeline cannot be operated, whereas the situation has been like that since early this year.

“Just take your calculator, 150,000, it means if you want to arrive at 1 million barrels per day, it means every week as a minimum, basically for one week alone, it’s four cargo and four cargo is four million barrels. Four million barrels formula bar or $100 is $400 million.

“So you can do your calculations by yourself, take whatever you want, take this to multiply by the number of days that have been shortened since the beginning of March, this year”, Wunti added
The NNPC chief stated that was not completely safe from oil thieves and vandals. He however assured that the situation would be arrested in the next couple of weeks.

He said the activities of vandals had caused low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, increasing instability in the oil and gas market.

Also Read: Ending oil theft debacle

“Nigeria will suffer for it; the revenues are impacted, so we can only appeal to them to rein in themselves, the oil theft situation is regrettable. It’s not going on across the whole of the Niger Delta, there are trunk lines that are more impacted on, I think the Bonny trunk line ranks highest.

“Our major challenge as a country is our capability to respond and that is as a result of several factors, the terrain as well as some incapacity that we have,” Wunti said
On the use of the technology in monitoring the illegal activities around the oil facilities in the creeds, he said what Nigeria has now is beyond the digital control system.

“It’s also a security system and we are doing it and to tell you that this was built-in by our in-house software engineers because of the security sensitivities to it because they are customized, the moment you give to somebody who creates that. So we use a combination of technology to integrate and synchronize and create what we are now confident and comfortable with.”

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“In the effort of the corporation to meet its financial tasks, the corporation maintained industry data on crude and all NGS production and lifting and most importantly, we ensured energy security, ensuring bulk supply of petroleum products to the nation and remit 100% of this to the federation”

On the synergy with other government agencies, Wunti said the Midstream and Downstream Petroleum Regulatory Authority, former DPR, and then the regulatory commission issue what they call Bill of Quantity and they also handle vessel clearance and export permits while the federal ministry of trade and industry, handles the issuance of export permits.

“We also relate with the Customs Service which also helps with the export permit and to also clear all the vessels; and the Central Bank of Nigeria, processes all Nigerian export proceeds forms, Nigerian export supervision scheme. So, these are all the agencies we deal with, it’s not an NNPC thing, we have to work through all these agencies before a ship can come in and sail,” Wunti added.

Also Read: Organised Oil Theft in Nigeria: Lamentations of Kyari

He mentioned some of the government agencies at the terminals to include: Midstream and Downstream Petroleum Regulatory Authority, former DPR and then the Regulatory Commission; the Nigerian Customs at the terminal, NNPC terminal representatives, pre-shipment inspection agents, the Nigerian Immigration officials, Nigerian Ports Authority and the Nigerian Port Health Authority.

”Then recently, the wanted to be at the terminal. In fact, we are trying to deploy them anytime from now. They also want to be at the terminals to see what is going on, because a lot of back and forth has been going on in the recent past, blaming the Navy. So, they now said they want to be there to participate physically in what’s going on.”


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