Oil spills caused by sabotage and theft dropped by 73 percent between August to December 2022, according to government data – a development analysts say means sector reforms are having an impact.
Data from the National Oil Spill Detection and Response Agency showed that oil companies in the country reported 22 cases of spills in December 2022, the lowest since recording 83 cases in August.
Experts say this indicates that government reforms may be helping to curb sabotage and waste. Olufola Wusu, partner and head of oil and gas at Megathos Law Practice, said this validates the policy of better collaboration between government agencies, oil companies and security personnel.
He said continued efforts should be directed at addressing asset insecurity in the form of attacks on pipelines and other critical infrastructure that has hampered oil production.
Wusu, who called for more reforms, said: “Industry stakeholders still need clear assurance to drill new wells to shore up reserves, followed by regular and transparent allocation of oil and gas blocks to capable local and foreign investors.”
The drop in oil spills is also a reflection of the current reality where the bulk of Nigeria’s oil production is moving to offshore fields where oil facilities are much harder to sabotage as they are buried under the sea.
Meanwhile, these reforms have put oil production on the rise. According to the Nigerian Upstream Petroleum Regulatory Commission, Nigeria’s oil production rose by 29 percent.
This is also the highest the country’s oil production has gone in the last 12 months since producing 1.26 million barrels per day (bpd) in January 2022.
Etulan Adu, an oil and gas production engineer, said the major contributor to the rise in oil production is the efforts aimed at curbing oil theft.
“Other means of evacuation of oil to terminals besides pipelines by indigenous companies to the terminals add up to the production increase,” he said.
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He highlighted “the confidence and improvement in the security situation in the Niger Delta and seriousness of the hydrocarbon accounting by regulatory agencies in partnership with oil companies.”
Adu said the government is taking serious steps to ensure that the correct figures are reported and accounted for.
He said: “Bunkering activities have been minimised, and the major pipelines such as the Trans Niger Pipeline have been restored for the daily transport of crude oil to the terminals.
“Due to oil theft, the major trunk lines were vandalised during low production. We are seeing the benefits of the repair works and host community alignment with the current agenda to boost production output.”
According to Adu, if the government and security agencies continue in this direction and momentum, there is the potential to hit 1.5 million bpd within the next three months.
