Oil theft: Building virile structures to secure petroleum resources
Nigeria’s depth of petroleum resources surely holds much potential when viewed from that lens. However, considering disappointing antecedents such optimism wanes. This is strongly indisputable with the glaring perception that the depth of the resources have not translated into buoyant economy nor has it informed appreciably, any resemblance of palatable conditions of living in the Country. Where the troubles become more concerning is the fact that the accrual of poor results recorded so far is not a function of low levels of exploring the resources, but a preponderance of mismanagement and manifestations of leakages.
The escapade of oil theft in Nigeria is one strong-hold whose grip on the neck of the petroleum industry continues to strangle the Nigerian oil and gas sector to struggle for breath. The preponderance of the menace and its attendant effects on the economy are sour recipes of distasteful sensations. The phenomenon of corrupt leakages which the Government has systematically been less concerned about has continued to pitch the Country to the receiving end of losses. The aggregation of the value of resources lost to oil theft over the years would appear to be a subject of concern which necessarily calls for a rethink. The attitude of the Government regarding the volume of oil theft as inconsequential to the depth of petroleum resources in the Country, is a point of insensitivity that has led the Country into suffering loss of billions of dollars over the years.
The losses suffered due to this societal ill is so massive, the thought of the impacts the funds would have had on the Country’s economy had it been accrued to the coffers for development projects, is one that causes regret. The necessity of putting the subject into analytical considerations therefore becomes more alarming. A professor of law at the University of Lagos, Dayo Ayoade, had on Wednesday at a virtual meeting on illicit financial flows organised by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) in Abuja, posited that between 2009 and 2019, Nigeria had suffered a loss of N500million barrels of crude oil valued at $44.7billion which was not assessed for royalty and tax. The Don who observed that the Federal Government was losing huge revenue in the upstream sector through the inadequacy of the measurement infrastructure, pointed out that Nigeria currently relies on crude oil producers for determination of crude oil volumes.
The Nigerian National Petroleum Corporation (NNPC) had on Wednesday, stated that Nigeria is currently losing an average of 200,000 barrels of crude oil daily to oil theft. An analysis of what this implies is that the Country loses over N151billion monthly based on recent market realities of Brent priced at $66.75 per barrel and the official exchange rate of the dollar at 379/$ as at Wednesday when the disclosure was made. This will in a troubling volume sum up to over N1.8trillion in annual record of summation.
The NNPC Group Managing Director, Mele Kyari, while speaking at a meeting with the Chief of Defence Staff, Major General Lucky Irabor, on Wednesday was quoted according to a statement issued in Abuja by the corporation’s spokesperson, Kennie Obateru, to have said: “We have two sets of losses, one coming from our products and the other coming from crude oil. In terms of crude losses, it is still going on. On the average, we are losing 200,000 barrels of crude every day.”
The sum of losses the Country currently suffers from oil theft is troubling. The necessity to address the menace is essential. Turning a blind eye to permit the menace to continue without forceful efforts to tame the claws of the escapades is inimical to reaping the full outcome that the depth of petroleum resources should accrue to the Country. Positioning the Country at such disadvantage is unwholesome to the economy. Revamping the debilitated state of the economy demands that no chance be given to afford any form of loss. The need to therefore block all channels of leakages from which resources that should accrue to the coffers of the Country’s reserve are being sapped unaccountably from the economy is paramount.
It is imperative that efforts be mustered with forceful operations to address the issue of oil theft and bunkering. Since the menace of oil theft is one subject which bears its root largely from systemic default lines, it is paramount that beyond traditional security clampdown, it is important to address the foundations of the leakages which find expression from systemic defaults. It is therefore prudent for the Government to look into rejigging the patterns of working operations in the sector. This is important to develop appropriate system of response based on intelligence to create closed structures that proactively block the channels of leakages cheating on the Country’s economy. While the depth of Nigeria’s petroleum resources may be perceived to be enormously abundant, this is not however a ticket for wantonness and insensitivity to allow theft to thrive. It is therefore paramount for the Government to build responsive structures to efficiently and effectively ensure the Country reaps the best deliverables from her petroleum resources at the most achievable height of outcome.
