The Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI) Waziri Adio recently in Abuja lamented that the $42 billion lost to oil theft and pipeline vandalisms puts Nigeria at greater risks of insecurity.
Speaking at the inaugural NEITI Policy Dialogue themed ‘ Stemming Oil Theft in Nigeria”. NEITI had earlier reported that the result of its findings shows that $41.9 billion had been lost to oil theft between 2009 and 2018.
According to him, there is a link between illegal resource extraction and proliferation of arms, adding that the country could be at risk if such amount falls into the hands of criminal elements.
“There is also another dimension which is insecurity. For you to perpetrate this kind of crime you need to be armed. There is a correlation between illegal resource extraction and the proliferation of arms. It is not just that you need a state of disorder to perpetrate this, it also creates disorder. If we are looking at the picture of the amount we are talking about, think about if that money falls into the wrong hands, into the hands of criminal elements ”
Adio said the amount translates to $11.47 million per day, $349 million per month and $4.19 billion per annum lost to oil theft.
In a paper he presented, the NEITI boss looked at different dimensions of oil theft in terms of materials, opportunity costs of what is lost when the country is producing as much as it should as a result of theft and vandalism.
According to the NEITI boss, between 2016 and 2019 NNPC spent N363 billion on maintenance, an average of N120 billion per annum.
He noted that apart from material losses the country also records in form of environmental degradation, insecurity among others, he said the impact on the lives of the citizens.
Earlier, Mr Godwin Obaseki, the Chairman of the Ad-hoc Committee of the National Economic Council on Crude Oil Theft, Prevention and Control, and also the Edo state governor, said that oil theft cases are on the increase as Nigeria lost $22.6 billion in the first half of 2019 to the ugly trend.
The governor painted a dire picture of the oil theft menace and called for the establishment of special courts and trainings of judges to prosecute and convict perpetrators of oil theft in the country, adding that no one has been prosecuted or convicted for the $41.9 billion loss of revenue reported to have been lost in the last ten years and the huge environmental degradation in affected communities, he revealed that within the first six months of this year alone, about 22 million barrels of crude oil valued at $1.35 billion was lost to thieves.
The Edo State Governor revealed that most of the crude oil losses were recorded on trunk lines being operated by companies which own production fields and pipelines, noted that the situation was disturbing as those outsourced to third parties recorded the least breeches.
He called on the federal government to if possible, take over operations of the trunk lines operated by International Oil Companies (IOC’s) temporarily, pending when the issue was critically looked into and addressed.
According to him, “We lost 22.6 million barrels of crude oil at an estimated cost of about $1.3 billion but these losses occurred specifically in the Nembe trunk line, we lost 9.2 million barrels; in the Trans Niger pipeline we lost 8.6 million barrels; and in the Trans Forcados pipeline 3.9 million barrels.
“What is interesting is that the largest losses came from lines that were owned and operated by the same companies who explored, who had production and owned and owned the transportation if the lines recorded those losses. We also noticed that the lines that were outsourced to third parties recorded the least losses so there is a very interesting correlation between the ownership production into the lines and the level of losses on those lines.
“When breaches are reported, when products are lost, we just deal with the financial losses to the operators what happens to the government? Nobody is ever held accountable, nobody is brought to order. Looking through the law we couldn’t find any concrete evidence of people who were caught, prosecuted and convicted on the crime of stealing crude product.
“Reviewing the submissions from the various parties, JTF, the communities, the oil companies, what came out clear was that there is a clear absence of proper governance for the pipelines such that no one is held accountable when there is a breach on these lines. It’s bad enough to lose products but these products are co-owned by both the operators and government.
“To contain this crisis at this point in time, we recommended that we should institute a proper governance structure which clearly identifies the operatorship, security and ownership of these lines to ensure proper accountability.
“We further suggest that if it is possible, the federal government should consider leasing or repossessing these lines for a short while until we understand what is going on here. Having taken over these lines, we should have proper transparent surveillance contracts because what we find is a whole plethora of contracts; every line operator has a surveillance contract.
“We suggested that due to the weak legal framework and the lack of convictions. There should be much more clarity on the state actors who are responsible for prosecution and for investigation and prosecution.
“We should set up a legal task force to carry out the prosecution of arrested offenders as well as train special judges to handle the cases of oil theft and to also consider setting up special courts to try the offenders.”
Acting Chairman of the NEITI Board, represented by Alh. Lawan Gana Lantewa, said the policy dialogue which the agency commenced is a logical extension of the policy-shaping ambition of NEITI, conceived as a platform for bringing together experts, critical stakeholders, policy actors to deliberate and reach consensus on way forward in the extractive industry.
