Nigeria lost $1.3bn worth of crude oil to theft and pipeline vandalism in the first six months of 2019, according to state governors, who looked into the criminal cases in the oil sector in the Niger Delta.
The governors were members of a 13-member ad hoc committee raised by the National Economic Council to carry out the assignment.
The report of the findings was submitted to NEC at its meeting presided over by Vice-President Yemi Osinbajo at the Presidential Villa, Abuja, on Thursday.
The Governor of Edo State, Mr Godwin Obaseki, who chaired the committee, spoke with State House correspondents after the NEC meeting.
The committee warned that if the situation was not arrested immediately, losses could be higher than $2.7bn in two years.
Obaseki said the Nigerian National Petroleum Corporation briefed the ad hoc committee before the latter prepared its report.
The governor gave details, “The ad hoc committee discovered that there were huge losses. In fact, the NNPC reported to the committee that 22.6 million barrels of crude oil valued at approximately $1.35bn were lost during the first half of this year.
“If this situation is not contained, in two years we would have lost $2.7bn.
“The losses that were recorded in the first half of the year were broken down as follows: the Nembe Creek Trunk-line lost 9.2 million barrels; the Trans-Niger Pipeline lost 8.6 million barrels; the Trans-Focadoes Pipeline lost 3.9 million barrels; the Trans-Escravos pipeline lost 877,000 barrels.”
He also said the committee found out that the governance structure of the pipeline was such that no one was held accountable whenever there were breaches and when the losses occurred.
Obaseki said, “The slow and inadequate prosecution of thieves despite numerous arrests and seizures have continued to encourage this menace.”
He added, “The absence of petroleum products filling stations in most of the oil producing communities around the Niger Delta makes them to resort to illegal bunkering and illegal refineries.
“Huge internal and external market of stolen products exists across the West Coast of Africa and also the sub-region.”
Obaseki added that the committee, upon the conclusion of the investigation, made the following recommendations: “That there is a need to restructure the maintenance and ownership of oil pipelines as a way of tackling the perpetrators of crude and other products.
“That we should have a legal framework that will ensure that criminals are duly prosecuted, imprisoned and their assets confiscated.
“That there should be special courts to try offenders and also have a special legal task force to coordinate the prosecution of arrested offenders as well as train special judges to handle cases of oil theft.
“That the NNPC should be encouraged to engage the National Intelligence Agency to identify the markets for stolen petroleum products across the continent.
“That the governors of the oil producing states should set up actions to develop the communities that are most prone and through which these pipelines run with their 13 per cent derivation allocation, as well as implement programmes that will be impactful and make life easy for the people.
“It noted that the Niger Delta Development Commission, which has the mandate to undertake development in this region, should be restructured to perform its role better.
“That they should emphasise creating employment opportunities for young people and youths in the region.
“That the proposed funding arrangement to be jointly funded by the federal, states and the oil companies to ensure the communities through which these pipelines traverse get some benefits to encourage them to protect these lines.”
On its part, NEC resolved, “that recommendations should be presented to the President, who is also the Minister of Petroleum, for the final decision for implementation.
“The chairman of council also asked the NNPC to make a presentation to the council on the state of the PMS and other products which are smuggled across the borders.”