NNPC loses $700m monthly to Oil Theft

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    The Nigerian National Petroleum Company, NNPC Limited, has announced that the unrelenting crude oil theft and dwindling production caused by insecurity are costing Nigeria about $700 million every month as no less than 470,000 barrels of oil are illegally siphoned off vandalised pipelines very four weeks.

    The NNPC’s Group General Manager in charge of National Petroleum Investment Management Services, NAPIMS, Bala Wunti, speaking with some journalists during a tour of the facilities of the NNPC, revealed that the oil pipelines around Bonny terminal cannot be operated due to the activities of criminals.

    He noted that for this reason, about 270 barrels that are supposed to be routinely loaded from Bonny terminal have stopped.

    According to him, “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. 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”.

    “The Shell Petroleum Company, SPDC, trunk line, transnational pipeline, TNP, cannot be operated and this has been like this since March 3rd. At 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 cargos and four cargos amounts to four million barrels”, he added.

    “Four million barrels formula bar or $100 is $400 million. So you can do your calculations by yourself, take whatever price you want, take this to multiply by the number of days that have been shortened since March 3rd”, stressed the GGM.

    Wunti lamented that Forcados terminal is also not completely secure due to some challenges, but confirmed that the firm was addressing the problem, and in two weeks it may be fixed.

    “We also have Brass (terminal) with about 100,000 barrels, which is operated by Agip and is also facing insecurity and vandalism. Illegal siphoning of crude oil from oil facilities by criminal individuals and groups, impacted negatively on revenue to all stakeholders”, he maintained.

    The GGM highlighted that the quantity of oil delivered into these federal oil terminals in the country has been limited by the activities of pipeline vandals and other criminals, stressing that the impact of vandalism has been low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, as well as increasing instability in the oil and gas market.

    “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”, stated the Wunti.

    Speaking on the support of the technology in monitoring the illegal activities around the oil facilities in the creeks, Wunti said, “I was in the Saudi Arabia infrastructure twice, and I know what they have. It’s a digital control system; it’s different from our own. With control system, it’s like you have the control system of all your assets in one place.

    “This 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.”

    He explained that in the effort of the company to meet its financial tasks, it has maintained industry data on crude and all gas production and lifting and most importantly, ensured energy security, bulk supply of petroleum products to the nation and remitted 100% of  it to the Federation.

    Speaking on the synergy with other government agencies, Wunti hinted that the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (former DPR), and the regulatory commission issue Bill of Quantity and 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 Nigerian 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”, revealed the GGM.

    He listed some of the government agencies at the terminals to include: Nigerian 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 Navy 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. You can see what is happening, that it’s not just an NNPC thing, it is all government agencies working together to make sure that each ship that comes at any point in time has all the clearances,” he maintained.

     

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