As the battle against crude oil theft, a development that has resulted to severe revenue to the country as well as its inability to meet its production quota, the Defence Headquarters (DHQ) yesterday disclosed that it had launched a special operation code named ‘Operation Dakatar da Barawo’ in order to curb crude oil theft and illegal oil bunkering in the Niger Delta region.
It also revealed that 30 illegal oil refineries had been demobilised in the region by the naval troops in the last two weeks. This was just as the Group Managing Director of Nigerian National Petroleum Company (NNPC) Limited, Mr Mele Kyari, yesterday expressed optimism that the country would return to normal crude oil production in the next two months, even as he stressed the need for collective action to address the unfortunate situation.
Speaking at a briefing in Abuja, the Director, Defence Media Operations (DDMO), Maj. Gen. Benard Onyeuko, said the new operation in the Niger Delta region was aimed at reinvigorating the already existing operation Delta Safe, with a view to containing economic saboteurs in the region.
Other objectives of the new operations include, “to secure critical maritime infrastructure, create enabling environment for the sustenance of desired level of hydrocarbon production, safe shipping and economic activities, and restore investor confidence in Nigeria’s Maritime domain, among others”.
He pointed out that troops of Operation Delta Safe had continued to dominate the zone and had conducted anti-crude oil theft and anti-illegal oil bunkering related operations at different locations. He listed the locations to include Opuama Celestial, Lolomu Ruler in Warri North Local Government Area, Obodo water-ways in Warri South West Local Government Area of Delta State.
Other locations are: Egbeda, Ibaa, Oduoha, Rumekpe in Emohua Local Government Area, Elele; Ikwere Local Government Area of River State and Brass Creek in Ozobo community in Ekeremor Local Government Area of Bayelsa State.
“Accordingly, troops discovered and destroyed 30 illegal refining sites, 37 reservoirs, 31 ovens, 12 large wooden boats, two cooling systems, three receivers, three storage pits and a metal drums.
“Cumulatively, troops within the period under review recovered 12,150,000 liters of illegal refined Automotive Gas Oil (AGO) 4,000 liters of stolen crude oil, three tankers, three vehicles, 73 galvanised pipes, two motorcycles, one bus, one Toyota Camry, Mercedes Benz car,” he revealed.
Meanwhile, Kyari, while addressing members of the House of Representatives Committee on Petroleum Upstream investigating reasons why Nigeria had not been able to meet its production quota, said the federal government was not only working on recovery of its production quota, but its sustainability as well.
He explained that the scale of crude oil theft and pipeline vandalism seen in the host communities was beyond explanation, and has rendered the oil and gas industry unworkable. The GMD while describing vandalism as an elitist business, lamentedthat nefarious activities were forcing production shutdown. Kyari said, “Yes, we have not gotten back production, but today, with activities that are going on, we promise that within the next one or two months, we will restore some level of normalcy.
What is going on has nothing to do with the Petroleum Industry Act (PIA).“It is purely activities of thieves, act of vandals which has rendered the industry unworkable and taken us to the level where today, our production is around 1.49 million barrel.“What this did also as you may be aware is that the diesel that you see until last week, when we clamped down on some of these illegal refineries were actually coming from these illegal refineries. Until last three weeks ago, most of the diesel that you used in your homes are coming from these refineries and that why when we took them out, we cut off the line of supply by stopping the movement, that’s when you heard that AGO got to N900 per litre.“That’s not the market price for AGO.
Then obviously, once supply becomes constrained, prices will go up and we are happy that NNPC’s intervention has brought down the price of diesel to normal market price and we are happy to do.“Why people bought it was because it was cheaper when it was being sold in the market. We are happy that this intervention is working and hopefully in the one or two months, we will bring sanity back. The act of vandals and thieves has gotten to a level where we had to shut down the pipeline and declare force majuro on it.
“Also the FXTL pipeline. So, as we speak now, there is no production going on there because we can no longer sustain the operation. This is not because we don’t go back to replace pipeline that are damaged. But as we do, we have repeated insertions on these pipeline. It got to a point that when we inject 239,000 barrel per day, we only receive 3,000 barrel per day. There was simply no business for anyone to continue to produce.
“When you lose about 200,000 barrels per day, even at an average price of $65 per barrel, we lost close to $1 billion between January and March. From January till date, we lost an average of 250,000 barrel per day and at the current price of about $100 to the barrel, even within this short period, we have lost close to $1.5 billion.”
He further revealed: “In January 2021, we were producing 239,000 barrel from the line linking Bonny Terminal and we only received 190,000 barrel meaning that we lost about 19,000 barrel to thieves then per day. This situation deteriorated to the extent that by March 7, 2022, it came to zero and so, we shut down the line and declared force Majeure.“Even on our most reliable pipeline, which is the Forcados pipeline, we still loss about 7,000 barrel per day. Needless to say that these are all coming as a result of act of vandals and oil thieves.
“So many interventions have taken place and we have continued to remove the insertions. To put it in context, within a distance of less than 20 kilometers, we removed 85 insertions. So, you can imagine when you are running a pipeline of about 300 to 400 kilometers.”
Kyari called for establishment of a special and independent court for speedy prosecution oil thieves. He warned that without speedy prosecution and conviction of the criminals, it would have an impact on the country’s economic outlook and its ability to generate foreign exchange.
He said: “The number of arrests made by the JTF, even vessel operators have made some arrests and also the Nigerian Navy in the last two weeks. Even more arrests have been made. Many of these illegal refineries are being taken down and also the insertions are being constantly removed and we believe that these interventions will pay off.“And we will able to restore production. And this is centrally coordinated.
There is a coordinated action now because we are using a number of strategies including community-based security outfits. “No doubts it is a very difficult time and that’s why despite the good intentions of the PIA, no one will produce oil, recover zero and put money back into the business. And that’s why investments are very weak despite the good environment that the PIA has brought. All we need to do is to increase the advocacy so that the legal process takes its cause and prosecutions are done timely. I will recommend that we set up a special court for this. Such cases will be speedily dealt with, so that it is not just the ordinary ‘small’ people that you see at those locations that are prosecuted. We know that to sell crude oil in the international market, it is not the business of the ordinary people that you see in these illegal refineries; it is an elitist business and we must have the courage to set up very independent special courts to try cases related to this.
“Otherwise, the impact it has on our economic outlook – our ability to generate foreign exchange and in terms of energy security for this country – is threatened by a very few people.”
Speaking further, the GMD reiterated President Muhammadu Buhari’s directive that the NNPC should strengthen its collaboration with security agencies and other stakeholders to tackle oil theft and illegal refineries in Nigeria.
“We are not helpless. Yes, it’s a very daunting situation, no doubts, Mr President in his wisdom directed the Chief of Defence Staff to lead a war, clearly it is a way to contain this situation and bring it to the barest minimum. So much is going on needless to say and I can share with you. There is a massive activity going on by some government security agencies in collaboration with the industry, NNPC, two regulatory institutions and the Nigerian Army, Navy and Airforce and DSS with the collaboration of another agencies including NIMASA and others. They are all working together to contain this situation.”
“Every agency of government is involved now. The DSS, EFCC to trace and track the movement of funds, NFIU to also trace movement of funds from all levels and we believe that this will pay off and ultimately, we will contain this situation,” he added
On his part, Governor Ifeanyi Okowa of Delta State, who was represented by the Secretary to State Government (SSG) Chief Patrick Ukah, while declaring the event open, noted that NUPENG remains a critical and respected trade union in the oil and gas industry, urging the union leadership to always forget harmonious working relation with the management cadre in the oil and gas industry in order to stave off needless friction.The governor stressed the need for all the workers to be abreast of the provisions of the Petroleum Industry Act in the overall interest of the nation.
