The Nigerian National Petroleum Company Limited is stepping up efforts to combat oil theft in the Niger Delta, as the country’s oil production continues to plummet, writes OPEOLUWANI AKINTAYO
In an update on its fight against crude oil theft in the country in July, the Nigerian National Petroleum Company Limited said it uncovered 162 illegal pipeline connections and illegal refineries in the Niger Delta, mostly in Bayelsa State.
In a two-minute documentary, the state-owned oil firm said 93 illegal pipeline connections and 69 illegal refineries were uncovered in Aboa and Gbokoda between July 15 and 21, and had been destroyed.
“War on crude oil theft: 93 illegal pipeline connections discovered and 69 illegal refineries destroyed in the Niger Delta in the past week,” the company declared.
The company explained that large-scale crude oil theft was currently ongoing in the Niger Delta According to the NNPCL, the illegalities were discovered using its maritime intelligence system.
“30 wooden boats used in carrying stolen crude oil were confiscated in the past week, with some in Gbokodo, and five cases of oil spill recorded in the deep blue waters,” it disclosed in the documentary.
The PUNCH had recently reported how a self-acclaimed Niger Delta militant group, Creek Reform Warriors, threatened to resume attacks on major oil facilities in the region.
In a statement, the group threatened to attack facilities operated by the Shell Petroleum Development Company of Nigeria Limited over an alleged unjust sacking of some workers in Forcados Terminal.
The leader of the group, “General” Igbokuro Tinowei, demanded reinstatement of all workers from Ogulagha and Odimodi communities, who according to him, were unjustly sacked by SPDC in 2019.
He claimed that the IOC had promised to recall the sacked workers immediately after the COVID-19 pandemic, but serially defaulted.
Tinowei warned the management of SPDC to reinstate the said workers within two weeks or face dire consequences of brutal attacks.
While reports on imminent attacks on SPDC’s oil facilities did not make it to the public, one month later, there was information that an export grade produced by Shell, Forcados had been offline due to a leak at its terminal.
Although the grade was said to be back on stream, the country lost thousands of barrels during it was shut.
Exports of the grade, which were scheduled to ship 220,000 barrels per day in July, were halted on the evening of July 12 after workers saw fumes near a single buoy, mooring where oil was being loaded into a vessel.
Shell confirmed that injections into the terminal had been curtailed after the report, though no force majeure was declared.
The suspension of Forcados loadings contributed to the country becoming the second-biggest contributor to the drop in OPEC crude oil output in July, a Reuters survey showed.
As a result of the halt in Forcados loadings, Nigeria’s crude oil production slumped by 40,000 bpd in July compared to June, marking one of the biggest drops in OPEC output.
In August, a vessel, MT Praisel, carrying crude oil suspected to have been stolen was intercepted in the Koko area of Delta State by the Tanita Security Services.
MT Praisel was intercepted while the 1, 117 tonnes vessel carrying about 8,100 barrels of crude, was being allegedly escorted by some naval officers.
Tanita Security outfit is a private security company owned by Government Ekpemupolo, popularly called Tompolo, an ex-Niger Delta agitator, who recently got a contract from the Federal Government to protect oil pipelines.
Operatives of the Tanita Security said the vessel was flying a Togolese flag and was being escorted by a Navy boat led by a senior naval commander.
Tanita operatives said they were met with resistance from the navy boat escorting the vessel and that the naval commander threatened to deal decisively with them. But the private operatives said they refused to back down.
According to Tanita operatives, they eventually contacted the National Security Adviser, Nuhu Ribadu and the Chief of Naval Staff Rear Admiral Emmanuel Ogalla, who authorised them to inspect the vessel.
Upon entering the ship, the security company officials noticed that the vessel was authorised by the navy to lift crude oil, but it did not receive approval from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The incident comes on the heels of the outcry by the Federal Government that the illegal trade of stolen crude oil had inflicted significant economic losses on Nigeria to the tune of N2.3tn in 12 months.
Again last month, NNPCL said it destroyed dozens of illegal refineries and unauthorised pipelines as part of its ongoing fight against oil theft in the Niger Delta.
In a video posted on its social media platform X, formerly known as Twitter, it said in the week through August 11, at least 53 illegal refineries were discovered in Rivers, Bayelsa and Imo states. It also reported 35 illegal pipeline connections, which it said were currently being repaired.
During the period, eight incidents of pipeline vandalism, causing oil spills were reported. In total, 144 incidents were recorded.
“The war on crude oil theft is on and the industry-wide security collaboration continues to record remarkable progress,” the company said in the video.
“There is no backing down on the war on crude oil theft until the menace is eradicated for good.”
NNPC said 11 vessels were flagged for Automatic Identification System violations, and were reported to the navy. In July, it intercepted an 800,000-litre vessel carrying stolen crude while heading to Cameroon.
Nigeria has lost huge oil production and export to oil theft in the Niger Delta lately. This has adversely affected its OPEC quota.
Amid the oil output decline, the NNPCL said the Federal Government would renegotiate the country’s production quota in the ongoing OPEC+ cuts by November.
The Group Chief Executive Officer of NNPC, Mele Kyari, during a live interview with Bloomberg, said the country was working towards ramping up crude oil production by about 200,000 to 300,000 barrels per day latest by October.
He noted that the country would push, thereafter, for an increased quota at the next OPEC+ meeting in November.
“OPEC understands that it is not that Nigeria does not have what it takes to produce more crude, but the challenge has been in terms of security, and everything we are doing to combat insecurity in the Niger Delta is working.
“OPEC has now given us (Nigeria) a target to increase production between now and October, and that figure is going to be worked with. I think it is very practical to get to between 1.5mb/d and 1.6mb/d by October,” Kyari said.
Nigeria’s crude oil production, including condensates, is around 1.3 million barrels per day, according to Kyari.
The NNPCL boss said the current production was “nowhere near Nigeria’s capacity”.
“We have a clear case when during the COVID; we had the capacity to do close to 2.1mb/d. So, we know we have the capacity. The issues are around the pipeline, and once we are able to resolve the challenges, then, we can produce higher,” he added.
The Chairman of the Society of Petroleum Engineers Nigeria Council, Felix Obike, while briefing journalists on the 2023 SPE conference, said crude oil exports would continue to dwindle until FG addresses the security of pipelines.
According to him, although exploration for more oil is ongoing, many oil firms are no longer transporting their oil for exports.
“The oil is there and we are currently exploring but a lot of companies are not transporting their crude oil for exports due to insecurity challenges disturbing the movement of oil,” he said.
Exports to drop
Revenue from crude oil will further suffer a huge blow between August and September, as export is set to drop by 12 per cent.
Preliminary export programmes seen by traders and published by Reuters showed that exports of three main Nigerian crude oil grades in September are expected to be lower than in August.
Loadings from the Bonny Light, Bonga and Qua Iboe streams will total about 387,000 barrels per day in September compared with 440,000 bpd in August, the programmes showed.
All three crude streams will load four cargoes each, while loadings of Forcados remain under force majeure due to a suspected oil leak, the report said.
The EIA, in one of its reports, said Nigeria was no longer Africa’s highest crude oil producer due to disruptions, which were threatening its production outputs.
“For many years, more crude oil was produced in Nigeria than in any other country in Africa. However, unplanned production outages—or disruptions—in Nigeria have, at times, resulted in its crude oil production falling below that of Angola, the second-highest producing country in Africa. Disruptions remain a significant and persistent downside risk to Nigeria’s crude oil production,” the EIA said.
Crude oil production suffered another major downturn when an oil rig, The Majestic owned by Depthwize Nigeria Limited, contracted by NNPCEPL/SEPLAT Joint Venture, collapsed on transit to its next drill location at Ovhor, Delta state.
Of the 96 crew members onboard at the time, 92 were found, however, tragically one person, died in the incident.
According to Seplat, 10 members out of the 92 found were admitted and stayed overnight in the hospital. A later report said they had been discharged from the hospital.
Speaking on the incident, the Nigeria Upstream Petroleum Regulatory Authority in a statement, said that the rig completed the drilling of Gbetiokun-11 for NEPL and demobilised on August 9.
“Thereafter, the rig commenced rig-move from Gbetiokun-11 well location to the planned Ovhor – 21 well location. Unfortunately, the rig capsized while in transit and was partially submerged at about 5.00 a.m. on Tuesday, August 15,” it stated.
There has not been any update on the state of the oil rig and the possible date it would commence operations.
A professor of Economist at the Olabisi Onabanjo University, Sheriffdeen Tella, told The PUNCH that the economic outlook for this year would remain bleak until Nigeria improves on its crude oil production.
“The global outlook for oil and gas for 2023 will not be much different from that of last year. For Nigeria, it may remain gloomy in terms of revenue unless we are able to improve on production and sustain it, prevent revenue leakages, crude oil thefts and seek new markets for oil and gas,” he said in a chat.