For many years senior government officials preferred to keep mum on the troubling theft of oil in Nigeria. Even President Muhammadu Buhari who is the petroleum minister kept mute on a matter which many say has rocked the very foundation of the Nigerian economy. Thankfully, all that changed last week when the Chief of Naval staff and the head of Customs fired their separate salvos at the managers of the oil industry, especially national oil company, NNPC. Although there are still many questions begging for answers, Nigerians are beginning to re-assess their position on the matter. For years the people looked to the government to come clean on the shady data of the country’s petrol consumption and oil subsidy that underpins it as well as reports of the massive crude oil theft in the Niger Delta.
According to the Naval chief Awwal Gambo, “some sources also claim that about 20,000 to 200,000 barrels of crude per day are being considered stolen. Most of these claims are definitely outrageous and unrealistic.
“Let us briefly analyze this. For instance, 100,000 barrels of crude oil is equivalent to 15.8m litres which will require a five-ton barge making 3,160 trips per day to convey the stolen product out of the creek. How do you pass the estuaries with this?”
He explained that even if we are to assume that the thieves have a plethora of barges, “because of the time required to carry the product, you will entirely shut the navigable waters heading out to sea through the estuaries to transship the oil to a mother vessel that will eventually take it out of the country.”
Oil companies believe that the thieves indeed have a plethora of barges. Many years ago, reporters who flew overhead in a helicopter were able to sight tends of small barges said to be engaged in siphoning crude from ruptured pipelines before conveying the stolen crude to mother vessels outside Nigeria’s territorial waters.
On daily petrol consumption in Nigeria, Comptroller general of the Nigerian Customs, Hamid Ali suggested that NNPC’s claims of 60m litres daily cannot be the truth. According to him, “the NNPC claims that 38m litres of petrol are smuggled out of the country daily. It will take 500 trucks to smuggle that amount of fuel out of the country daily. Which road do they pass through without being caught?” he asked.
The interventions of both senior government officials seem to suggest that NNPC officials are either inept or criminally joined with the oil thieves. And then they come out to cook up fake petrol consumption data and outrageous figures for crude oil theft via huge under reporting of crude oil loading and export.
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Oil is the mainstay of the economy and to that extent it is unacceptable that the government is failing to be more proactive. Oil export data is shrouded in secrecy, and it could be possible that exports from terminals are under reported as some have suggested. According to Ikenna Osoffia, an oil engineer, “a country pays a huge cost when government is not working. That is the case of Nigeria.”
The price the economy is paying is huge. There are oil companies that have been unable to export since October last year and some are having to send off their crude oil by barges, an expensive process that only helps to raise the cost of production of oil in Nigeria.
Six months ago, businessman and Chairman Heirs Holdings, Tony Elumelu, bemoaned the unprecedented level of oil theft in the country, saying that Nigeria was losing over 95 per cent of its oil production to thieves.
Elumelu, who narrated the ordeal of some of his colleagues at work on his official Twitter handle, noted that apart from the economy, Nigerians are now afraid as a result of the bad security situation.
Elumelu, who is the founder of the Tony Elumelu Foundation, a platform which promotes entrepreneurship in Africa, urged Nigerians to be “vocal” about the way they are governed and hold their leaders more accountable.
He added: “how can we be losing over 95 per cent of oil production to thieves? Look at the Bonny Terminal that should be receiving over 200,000bpd barrels of crude oil daily, instead it receives less than 3,000 barrels, leading the operator , Shell to declare force majeure.
“Why are we paying taxes if our security agencies can’t stop this? It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!”
Elumelu pointed out that while oil producing countries were happy that prices had been rising and their foreign reserves continue to grow, Nigeria is in a state of gloom. We need to hold our leaders more accountable,” he added.
The businessman, who holds a controlling interest in Transnational Corporation (Transcorp), also wrote about the country’s energy sector, stressing that oil theft, not lack of investment in the upstream, was generally responsible for Nigeria’s inability to meet its Organisation of Petroleum Exporting Countries (OPEC) quota.
Read also: Oil theft claims outrageous, says Navy chief
He added, “How can we be losing over 95 per cent of oil production to thieves? Look at the Bonny Terminal that should be receiving over 200, 000bpd of crude oil, instead it receives less than 3,000 barrels, leading the operator, Shell, to declare force majeure.
“Why are we paying taxes if our security agencies can’t stop this? It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!”
Some others have also spoken out privately and in all cases, they agree that the government has not shown that it comprehends the enormity of the crisis and its knock on effect on the whole economy.
