The National Economic Council (NEC) said Thursday Nigeria has lost $1.3 billion worth of crude oil due to theft and pipeline vandalism in the first quarter of the year.
Briefing journalists at the end of the monthly NEC meeting at the Council Chambers of the Presidential Villa in Abuja, Governor Godwin Obaseki of Edo state said if the situation was not arrested immediately, losses could be as much as $2.7 billion by the end of the year.
The governor chaired the 13-man NEC sub-committee mandated to investigate the impact of attacks on oil installations in the creeks of the Niger Delta.
Below is an excerpt of the NEC’s report.
REPORT OF THE AD-HOC COMMITTEE ON CRUDE OIL THEFT, PREVENTION AND CONTROL PRESENTED BY GOVERNOR, EDO STATE
– The 13 member Ad-Hoc Committee which is chaired by the Governor of Edo State, Mr. Godwin Obaseki in their report, told the Council that the Committee is constituted to address:
i. Impact of vandalism, oil theft and illegal bunkering on oil production;
ii. Effectiveness of the activities of the JTF and other Security Agencies
iii. Consider the set-up of Special Courts to prosecute offenders, among others.
The Terms of Reference of the Ad-Hoc Committee is to include:
· restoring and sustaining the three major pipelines;
· assessing the challenges and draw up a roadmap to guide further actions towards finding a lasting solution to the problem;
· co-opt individual or corporate body to facilitate the work of the Committee and update the Council regularly.
– The Ad-Hoc Committee in its findings discovered that there were losses. NNPC reported a loss of 22.64 million barrel of crude oil valued at USD 1.35 billion for 2019 half a year and possibly UDS 2.7 billion for a full year at a global oil price of USD 60 per barrel, if not checked.
– The losses were recorded on the following pipeline:
a. Nember Creek Trunk Line (NCTL) 9.2 million barrels
b. Trans Niger Pipeline (TNP) 8.6 million barrels
c. Trans Forcados Pipeline (TFP) 3.96 million barrels
d. Trans Escravos Pipeline (TSEP) 877 Thousand barrels.
– Absence of governance structure for the pipeline such that no one is held accountable whenever there is a breach on the lines.
– Slow and inadequate prosecution of oil thieves, despite numerous arrests and seizures.
– Absence of petroleum products filling stations in most of its oil producing Communities that make them resort to illegal bunkering and refineries
– Huge internal and external markets of stolen crude oil which include Ghana as well as some neighboring countries.
– The Committee made the following recommendations to the Council:
The need to restructure the maintenance of all pipelines as a way of tackling the perpetrators of oil theft.
ii. Have a legal framework that will ensure every criminal is duly prosecuted, imprisoned and all assets confiscated.
iii. Setting up Special Courts to try offenders, set-up of Legal Task Force to coordinate the prosecution of arrested offenders as well as train special judges to handle cases of oil theft.
iv. NNPC to engage the National Intelligence Agency (NIA) to identify markets for the stolen products.
v. Governors of the oil producing states to step up actions to develop their communities with their 13% derivation allocation as well as implement programmes that will be impactful to make life easy for the people. They should also create employment opportunities for the youths in these regions.
vi. Propose a funding arrangement to be jointly funded by the Federal, State Governments and oil companies.
Council resolved as follows:
-Recommendations given will be presented to the President who is also the Minister of Petroleum for the final decision and implementation.
-The Chairman of Council also asked NNPC to make a presentation to the Council on the state of PMS and smuggling across the borders.