Nigeria’s oil sector is in urgent need of salvaging. The drop in crude oil production from 1.32 million barrels per day in February to 1.23mbpd in March, per OPEC, means that output plunged by 91,000bpd. This translates to a loss of N720 billion. For decades, Nigeria has been plagued by oil theft and pipeline vandalism. To recover the losses, the Federal Government needs to recalibrate the security architecture in the Niger Delta to curb the menace.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, attributed the shortfall in expected production to problems with the Trans Niger Pipeline and maintenance carried out by some oil companies. Oil thieves and vandals have consistently sabotaged oil production in the Niger Delta, contributing to the country’s abysmal output.
The deficit is a far cry from the 2024 OPEC quota of 1.5mbpd and the federal budget benchmark of 1.78mbpd (including condensates). According to the Nigerian Upstream Petroleum Regulatory Commission, the total volumes of crude oil and condensates produced in January, February, and March were 1.643mbpd, 1.539mbpd, and 1.438mbpd respectively.
The limited production has disrupted budgetary expectations. Crude oil and gas constitute 70 per cent of Nigeria’s budget revenues and 95 per cent of its foreign exchange earnings. So, President Bola Tinubu needs to take crucial steps to stop the industrial-scale theft.
The National Security Adviser, Nuhu Ribadu stated in 2023 that the country lost 400,000bpd to theft. A former Minister of State for Petroleum Resources, Timipre Sylva, said Nigeria lost at least 700,000bpd to thieves in 2022. This is far higher than in other OPEC countries plagued by oil theft like Venezuela, Iraq, Mexico, and Malaysia.
The NNPC stated in September 2022 that it lost $700 million every month to oil theft. The Nigerian Extractive Industries Transparency Initiative added that Nigeria lost 619.7 million barrels, valued at N16.3 trillion, to crude oil theft from 2005 to 2021. In 2023, the NNPC spent N136 billion on security, repairs, and maintenance of vandalised infrastructure, per Dataphyte.
So, Nigeria should implement strategies like the ones by Saudi Aramco and Norway’s Equinor. The two companies deploy leak-detection sensors, acoustic sensors, fibre optic sensing, satellite surveillance, pressure drop analysis, and corrosive monitoring to combat oil leakages.
In response to oil theft, the government militarised the Niger Delta. Unfortunately, this has failed to yield ample results. Although the military has foiled some oil theft and illegal bunkering activities, it continues its backward ‘standard practice’ of seizing and destroying both vessels and crude. This impedes prosecution in competent courts. The burning of both the crude and the vessels damages the environment.
Recently, the air component of Operation Safe Delta destroyed seven illegal refining sites at different locations in Rivers State.
But many people, including the former Governor of Rivers State, Nyesom Wike, have accused the military of being in cahoots with oil thieves. The killing of 17 soldiers in Okuoma, Delta State, last March, reflects the angst between the military and the Niger Delta communities
The military has failed to win the fight against oil theft. This calls for sober reflection and a paradigm shift. Tinubu must overhaul the military architecture in the Niger Delta. He should change them regularly and issue specific deliverables to them.
The burning of crude oil coincides with a time when the Port Harcourt, the Dangote, and the modular refineries urgently need crude oil to shore their operations. With Nigeria deploying 98 per cent of its revenues to service debt, Tinubu must insist that the military retrieve stolen crude, deploy it as evidence in court, and make it available to the Nigerian National Petroleum Company Limited in an accountable and transparent manner.
