The Nigerian National Petroleum Company Limited (NNPCL) has discovered 162 illegal pipeline connections and illegal refineries in the Niger Delta, mostly in Bayelsa in the last week.
This was made known in a documentary titled ‘war on crude oil theft’ by the company shared via its social media handle on Wednesday, stating that the illegalities were discovered using a maritime intelligence system.
According to the documentary, 93 illegal pipeline connections and 69 illegal refineries were discovered from Aboa and Gbokoda between July 15 and 21, which have been destroyed.
In the video documentary, the company explained that during the period, 27 pipelines were vandalised while wooden boats, trucks and those arrested were about 30, adding that the vandalised pipelines were being repaired.
Orji Ogbonnaya, executive secretary, Nigerian Extractive Industries Transparency Initiative (NEITI) revealed during a policy dialogue recently that Nigeria lost 619.7 million barrels of crude oil valued at N16.25 trillion ($46.16 billion) to crude oil theft between 2009 and 2020.
According to experts, oil theft has had negative impacts on the oil and gas industry such as revenue leaks, and worsening disinvestment, among other things.
Read also: Nigerian govt reaffirms commitment to revive ALSCON
“There is crude theft (it is there) but the main reason for our 1.3 million barrels production today (shortfall of 600,000 barrels per day) is the decline in investment,” Austin Avuru, executive chairman and founder, AA Holdings Limited, said at the 2022 Nigeria annual international conference.
Industry operators also complain that issues around thefts combined with export terminal and pipeline shut-downs are limiting Nigeria’s ability to ramp up production and take advantage of high prices.
Similarly, Bala Wunti, NNPCL’s chief upstream investment officer during a facility tour, said the company loses $700 million monthly due to oil theft and pipeline vandalism, particularly those around the Bonny oil export terminal which cannot be operated due to the activities of oil thieves and pipeline vandals.
“Illegal siphoning of crude oil from oil facilities by criminal individuals and groups, impacted negatively on revenue to all stakeholders, the impact of vandal activities caused low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, increasing instability in the oil and gas market, but I will tell you the major thing that affects us,” he said.
With the company’s renewed commitment to curbing oil theft, economic experts expect that the industry will receive a boost in terms of revenue and productivity.
Mike Osatuyi, national operations controller at the Independent Petroleum Marketers Association of Nigeria (IPMAN) said that the recent development in curbing oil theft is good for the sector and should be sustained
With this activity and its consequences, he said oil theft will continue to reduce because people are losing their assets as vessels worth millions of dollars are being burnt.
“This will increase our production capacity and give the government more revenue, it will also impact the economy,” he said.
