Oil Theft: Senate committee calls on FG to seek international collaboration to stem tide

The Senate ad hoc committee to investigate oil lifting, theft, and the impact on petroleum production and oil revenue on the nation’s economy has enjoined Nigerian government to seek international financial collaboration to check illegal Letters of Credit used to fund the sale and purchase of Nigeria’s stolen crude oil.

The committee in its recommendation said collaboration with international bodies would help checkmate illegal crude sales which were transacted through the world financial system.

Recall the Senate at plenary sitting on 14 April, 2022, deliberated on the matter of the Medium Term Expenditure Framework (MTEF) especially with regard to the revenue profile of the Nigerian economy and the nation’s crude oil production which at January 2020 stood at 2.13 mbpd.

However, due to incessant pipeline sabotage and theft, the production fell to as low as 1.38 mbpd as at July 2022. This became a great concern to every discerning Nigerian and other stakeholders in the oil industry with the consequential huge losses to revenue accruable to the federation, as well as the devastating damages to the environment.

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Another source of concern were the conflicting figures being brandished by various organisations as “crude oil theft”. These concerns, among others, necessitated the Senate to set up an Ad hoc Committee to investigate the remote and immediate causes of crude oil losses, and its impact on production and revenue, with a view to finding a solution to the menace.

The committee was chaired by Senator Albert Akpan, with Senators Yusuf Yusuf, Solomon O. Adeola, Kabiru Gaya, Mohammed Adamu, George Sekibo, Gabriel Suswam, Kashim Shettima, Aliyu Abdullahi, Mohammed Ndume, Stella Oduah, Mohammed Musa, and Ibrahim Gobir, as members.

After eight months of investigation, the committee recommended a number of measures it felt would steam the tide of oil theft in the country if implemented.

Among other recommendations, the committee urged the National Upstream Petroleum Regulatory Commission (NUPRC) to resume full regulatory oversight of all existing crude oil terminals, including integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.

“As intended in the PIA, the NMDPRA statutorily should concentrate fully on regulating the midstream and downstream activities i.e. from refineries, mid and downstream gas infrastructure, supply, storage and distribution of refined petroleum products, petrochemicals, virtual pipelines and retailing facilities, in line with the provisions of the PIA, including future stand-alone crude oil and natural gas export terminals;

“There should be an immediate streamlining of the agencies present at the terminals in line with the relevance of their PIA delineated upstream and midstream/downstream statutory functions while NUPRC should strengthen deployment of digital accounting procedures (such as advance cargo declaration, digital integration of LACT units) at all crude oil terminals for transparent hydrocarbon accounting.

“NUPRC should fast track the upgrade of the National Production Monitoring Systems (NPMS) to enable Real Time monitoring of Flow station and Terminal activities.

“NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for detection and mitigation of illegal movement of vessels , to ensure adequate revenue generation and optimal crude oil accounting, thus enhancing revenue generation for the federation.

“NUPRC must ensure that all vessels coming into the Nigerian waters for the purpose of crude oil liftings adhere strictly with Advance Cargo Declaration (ACD) in line with international best practices in collaboration with the Nigerian Navy and other relevant statutory agencies in line with presidential approval.

“The Ministry of transport should immediately withdraw its interference with Advance Cargo Declaration on wet petroleum cargoes in alignment with the statutory mandates of the NUPRC under the PIA.

“NUPRC should summarily conclude engineering audits of existing LACT Units and Flow meters for efficient regulation and monitoring for integrity assurance and standardization of crude oil measurement systems in the Nigerian upstream oil and gas operations.

“The Bureau of Public Procurement should expedite all processes of procurement for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure immediate deployment of an online realtime monitoring system by the Commission across all upstream oil and gas production platforms to ensure accurate measure of production volume by the producers.

“The Senate Committee on Petroleum Resources (Upstream) must ensure effective and periodic oversights of the upstream petroleum sector.”

The committee observed that only 66% of the country’s oil production can be effectively guaranteed while 33% is affected by oil theft and loss in production due to the third party easy access on land terrain.

The committee pleaded with Nigerians to help in curtailing crude oil theft, noting it is the collective responsibility, as it called on all well-meaning members of the public to report illegal activities and transactions in stolen crude oil that may come to their knowledge from any part of the world.