Organised Oil Theft in Nigeria: Lamentations of Kyari
…How Nigeria losses 95% oil revenue to thieves
Last week, the managing director of the Nigerian National Petroleum Company Ltd, Mallam Mele Kyari, rendered a narration that showed that Nigeria is gasping for air, with organised crude oil thieves firmly gripping the throat of what is remaining of the economy that is hopelessly in the hands of banditry and insecurity.
Kyari heads Nigeria’s apex oil corporation that until very recently directly supervises oil exploration, distribution management and partnerships with international oil firms. He gave an account of a Nigeria economy whose case is helpless and hopeless.
Nigeria, Africa’s largest producer of oil, depends on oil for over 90% of total revenue, yet Kyari said over 95% of the same product is stolen by thieves. He said the thieves from all levels of society were stealing 200,000 barrels of crude oil per day.
He stunned the world during the weekly ministerial briefing at the Presidential Villa early last week, when he asserted that up to 95% of Nigeria’s oil produced at the Bonny Terminal is being stolen.
According to him, the country’s case is so unique that it does not look like any other in the world, not anywhere near the experiences of Colombia and Venezuela where the worst, reputed oil smuggling cartels exist. According to him, Nigerian oil thieves easily use sacred places of worship like Mosques and Churches to warehouse stolen crude.
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“You remember in Lagos when a fire outbreak happened on one of our pipelines? We discovered that some of the pipelines were actually connected to individuals’ homes. And not only that, with all sensitivity to our religious beliefs, some of the pipelines and some of the products that we found are in churches and mosques,” Kyari has added.
The NNPC managing director and chief executive officer also gave the example of a particular oil pipeline in Bonny Island near Port Harcourt, where 295 illegal connections had been discovered, along its 200-kilometer length.
He informed however that currently the security agents had arrested 122 arrests, and they will be prosecuted. About 11 vessels, 30 speed boats have been arrested, including 179 wooden boats and then 37 trucks.”
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He said the oil theft Nigeria was mostly being done by organized groups who sometimes work with residents and locals.
The NNPC boss confessed that Nigeria’s security architecture for tracing the oil thieves seem to be overwhelmed. According to him, the authorities are attempting to address the problem, but pointed out that thieving “is difficult to stop.”
He explained that the NNPC major pipelines from Atlas Cove all the way to Ibadan, and all others “connecting all the 37 depots that we have across the country, none of them can take delivery of products today.”
He said the reason is simple. “For some of the lines, for instance, from Warri to Benin, we haven’t operated for 15 years. Every molecule of product that we put gets lost,” Kyari lamented.
Nigeria’s ministry of petroleum resources puts that the country loses no less than 400mbpd of crude oil, but it looks much as estimate because it is actually difficult to compute the losses
OPEC records show that Nigeria only managed to produce 1.083 million b/d in the month of July, way below its allocated quota of 1.8 million b/d.
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What it means is that with a barrel of Bonny Light currently changing hands at $117.60, Nigeria is losing billions of dollars every year to oil theft and pipeline vandalism.
NNPC announced in June that it lost over $1billion from oil theft in the first quarter of 2022 alone.
Kyari informed however that the security operatives had recovered nearly 36 million liters of crude oil and about 22 million liters of diesel. The recoveries also include some gasoline and kerosene. This part of Kyari’s narration at the briefing, observers say, seemed not have impressed many.
Last August, the same Kyari announced the adoption of an online tracking portal that was capable of fishing out oil thieves. The announcement came with the promise to reward whistle blowers. Nigerians who waited patiently to hear any performance update on the portal during and even after the briefing were disappointed.