…Structural overhaul is the way to go, probe will unearth nothing — Experts
By Moses Adeniyi & Ariemu Ogaga
Rising losses in Nigeria’s upstream of the oil and gas sector has compelled the Federal Government to commence probe of operators in the sub-sector over alarming profile of oil theft in the Country.
The probe, it was gathered, was informed by deficits in production and accruals, despite recent rising prices of global oil prices, which recently has soared above $100per barrel.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which regulates operation in the sub-sector, has consequently set up a panel, in response to President Muhammadu Buhari’s directive, to investigate the activities of oil companies, following claims of alarming oil theft.
The panel would carry out “a forensic investigation to cover the technical and commercial operations of oil companies involved in drilling and selling of crude oil,” a statement by NUPRC read.
Also a part of the mandate for the panel is to investigate the claims regarding the volume of theft from the various oil fields and establish the actual operational capacities of the operators; “to find out if the volumes being touted are actual.”
Where the investigation establishes the gap, the Government seeks additional measures needed to be put in place to effectively address the alarming issues.
Recall that upstream operators had had earlier this month claimed that over 90 percent of oil production in the country was being stolen daily by pipeline vandals.
The Chairman of the Independent Petroleum Producers Group (IPPG), Abdulrazaq Isa had two weeks ago said over 90 percent oil produced by local companies were stolen daily.
Isa who urged the government to urgently address the issue of oil theft in the Niger Delta region had said: “Notwithstanding the notable achievements recorded in the oil and gas sector in Nigeria, there is an existential threat facing us today. Insecurity has assumed a different dimension as the level of theft of crude oil is both unprecedented and unsustainable.
“In 2021 alone, producers in some parts of the Niger Delta suffered losses of between 15 percent to as high as 90 percent. Such monumental losses attributable to theft are a major threat to our business, revenues to government as well as to national security.”
Meanwhile, NUPRC Chief Executive, Engr. Gbenga Komolafe in a statement in Abuja on Tuesday said a team of experts would carry out a thorough audit of the activities of operators in the upstream petroleum industry.
This, he said, would consider the profile of operations in the space of the last two years, to ascertain the actual volume of crude oil stolen by vandals and saboteurs.
“The Commission is not unaware of the tragedy of oil theft which has been a plague on the industry and had last year triggered an industry-wide initiative aimed at curbing it and increasing crude production levels; a development which followed an express presidential directive,” he said.
According to him, the probe is in line with President Muhammadu Buhari’s directive, demanding that all necessary mechanisms be activated to curb oil theft in particular and immediately end other forms of economic sabotage in the oil and gas sector.
The NUPRC Chief Executive who maintained that the commission considered the figures of crude oil loss in the public domain worrisome, disclosed that the Commission has “activated all the necessary mechanisms to get to the root of the matter and establish the actual volume of crude stolen as against the volumes claimed.”
“While stepping up efforts to deal with the issue of oil theft in collaboration with the military and other relevant agencies, the Commission has mandated the newly constituted panel to investigate the claims regarding the volume of theft from the various oils fields and establish the actual operational capacities of the operators; to find out if the volumes being touted are actual; and if so, what additional measures need to be put in place to effectively address the issue,” he said.
…Structural overhaul is the way to go, probe will unearth nothing — Experts
Meanwhile, just as the government has set up the panel, some experts believe the probe would not eliminate the illicit acts of oil thefts which is believed to be perpetrated by interested stakeholders in the sector.
In his perception, the Managing Partner, BBH Consulting, Barr Ameh Madaki, said the probe will not unearth anything as the sector is ridden with stakeholders taking advantage of the value chain.
According to him, only a total overhaul of the security architecture around oil and gas facilities would address the rising operations of oil theft.
“Crude oil theft is not a new phenomenon. It is as old as the oil and gas industry itself, and has been on a steady rise in more recent times with the degeneration of security in the Niger Delta.
“Probes will not unearth anything, because virtually everyone in the chain is neck deep in it. What needs to be done is a total overhaul of the security architecture around oil and gas facilities, failing which a few entrenched interests will continue to feed fat to the detriment of the country,” he stated.