Last Thursday, the Petroleum Downstream Group of the Lagos Chamber of Commerce and Industry (LCCI) held its Business Clinic which brought to the fore the urgent need for a permanent solution to the problem of pipeline vandalism that has increasingly plagued the downstream sector of the nation’s oil and gas industry.
Pipeline vandalism, which is the illegal or unauthorised act of destroying or puncturing of oil pipeline with the intent to disrupt supply or to steal crude oil or its refined products for the purpose of appropriating it for personal use or for sale in the black market or any other outlet, has continued to impact very negatively on the potentiality of the industry as a major revenue-earner for the country.
Crude oil production target in this year’s budget is 2.48 million barrels per day (mbpd), but actual production currently fluctuates between 2.1 and 2.3mbpd, owing to incessant activities of vandals who rupture major pipelines in the country and steal crude oil, especially in the Niger Delta.
The shortfall between budgeted production and actual production has reduced the revenue from crude oil that should have accrued to the Federation Account.
Pipeline vandalism and oil theft have not only continued to harm the country’s oil output, it has also cost the nation huge financial losses. The nation has lost a total of about N162.6 billion from crude oil and petroleum products pipeline losses from 2009-2012 alone, not adding associated costs, according to PPMC.
“Pipeline vandalism has been a major threat to the survival of this nation and its implication ranges from economic to social and political. Many of the nation’s strategic depots have been left idle and moribund for years as pipelines supplying products through them have been constantly under incessant attack by vandals,” Emma Osagie, chairman, Petroleum Downstream Group, LCCI, said at the event.
Haruna Momoh, managing director, Pipelines and Products Marketing Company (PPMC) lamented that despite the efforts and money already expended towards tackling pipeline vandalism, it has been on the increase as more sophisticated, well equipped and fully armed vandals now siphon crude oil using barges and boats. Momoh, who was represented by Gbenga Komolafe, executive director, commercial, NNPC/PPMC, stated that the number of pipelines punctured last year rose drastically to about 4,000 from 2,300 in 2005.