Crude Theft – Stakeholders Accuse Govt Agencies, Oil Traders of Collusion

Stakeholders in the oil and gas industry have accused oil companies, crude oil traders and government agencies that man the crude oil exporting terminals of connivance to steal the nation’s crude oil. Specifically, the stakeholders pointed accusing fingers at officials of Department of Petroleum Resources (DPR), the Nigerian National Petroleum Corporation (NNPC) and representatives of oil workers, Customs as well as officials of the Economic and Financial Crimes Commission (EFCC) and others, who supervise crude oil lifting at the various export terminals of “aiding and abetting oil theft”.

Describing the act as “organised crime”, the stakeholders, who pleaded anonymity said some of the oil companies were frustrating the use of meters to monitor the nation’s crude oil production and exports because they are involved in the illicit oil trade. They argued that where the meters were in place, oil theft still continued unabated because firms granted approval by the Nigerian National Petroleum Corporation (NNPC) to lift crude are deliberately allowed to exceed their commercially allowable quota.

“What happens for instance is that a lifter is allowed to take additional five per cent on every vessel that is loading? But these oil traders take as much as additional 15 per cent or more on every vessel, on condition that they will come back to reconcile the figures and refund the excess to government. The question is: Who reconciles these figures and how much do these firms refund to government? There are lots of lapses in terms of the volume of crude being produced and exported. The theft will continue because those saddled with the responsibility of monitoring the well heads, the flow stations and the export terminals are part of the illicit business”, said a source. He said relevant metering technology, which would provide real time monitoring of crude from production to sale was available but were not being deployed because the oil firms who operated the crude export terminals were also guilty of the criminal act.

Last year, an Assistant Director with the DPR, blamed failure of oil companies to adopt the use of meters provided by government as part of reason for the increasing theft of Nigeria’s crude. He told the National Task Force on Petroleum Revenue, headed by former Chairman of the EFCC, Mallam Nuhu Ribadu, that only five out of 31 companies provided production meters were using them. “Unless you have a metering system, whereby you are able to tell exactly what you are producing daily from the well, what is going through the pipelines to a flow station, what is going to the export terminal, you may not be very accurate with any figure.” The Chief of Naval Staff (CNS), Vice Admiral Dele Joseph Ezeoba, had last week disclosed the bulk of Nigeria’s crude oil was stolen from the crude export terminals operated by oil majors.

Ezeoba, who made the observation at a forum on: ‘Oil Theft and Illegal Bunkering in the Niger Delta’ convened by President Goodluck Jonathan’s Special Adviser on Niger Delta cum Chairman of the Presidential Amnesty Programme, Mr. Kingsley Kuku, noted the menace of crude theft had become a major threat to the nation’s economy, saying very urgent measures needed to be adopted to address the problem.

According to him, posterity will judge all those engaging in the illicit trade.