DPR boss: How cartel steals Nigeria’s oil
Panel: Chinese firm illegally got N5bn waiver

The House of Representatives has said $20 billion worth of crude oil could not be accounted for between 2005 and 2012. Chairman of the House ad hoc committee on crude oil theft, Hon. Peter Akpatason (APC, Edo), who disclosed this yesterday at the continuation of the investigation, said this was discovered after a forensic audit.

“I want to state clearly that the ad-hoc committee was not set up to witchhunt any person or persons, organisation or organisations, rather it is to identify and proffer a lasting solution to this lingering cancer bedevilling us as a nation.

“Nevertheless, anyone found culpable shall be brought to face the law by the appropriate law enforcement agency,” he said. Akpatason said: “The impact of crude oil theft cannot be over-emphasised, and this has lasted for too long. As patriots, it is our collective responsibility to see to the end of this stealing.

“The ad-hoc committee has identified the key role of DPR as the agency of government in the sector, hence your re-invitation today to enable us work together and come up with a common front on ways to tackle this matter, if not completely put an end to it, to reduce it to its barest minimum.” Continuing, Akpatason explained that: “DPR is the agency of government saddled with the responsibility of monitoring crude oil production and lifting. The committee requested and obtained schedules of crude oil produced and lifting between 2005 and 2019.

“Forensic analysis of the data revealed a very wide margin between what was reportedly produced and what was lifted. Between 2005 and 2012, DPR reported production of 1,746,621,167 barrels from four sampled oil terminals of Egeravos, Bonny, Forcados and Bonga.

“Out of these production volumes, only 1,417,200,848 barrels were accounted for, as having been lifted officially. A whopping volume of 329,420,319 barrels, valued at over $20 billion, could not be accounted for. The same trend of infractions was observed in the years 2016 – 2019.”

Testifying before the committee, the director/ chief executive officer of DPR, Mr. Sarki Auwalu, said those involved in stealing crude oil in the country are part of a criminal cartel which also involved some unnamed powerful contacts.

He explained that while it is practically impossible to steal crude from the offshore terminals, most of the crude stolen from the country comes from the land terminal because they must transport the crude through the pipelines to the export terminal. According to him, in the process of transporting the crude through the pipelines, there are interferences along the way while the crude is stolen in smaller quantity to make up for what they steal, transport them in smaller badges to the ship waiting for them.

He said: “I will like to use this opportunity to give a brief on how we will account for hydrocarbon in this nation. I think that will provide a better view for this committee as well as Nigerians.

“The process starts with the wells, because every crude oil comes from a well, and you cannot drill a well without knowing the capacity of that well to produce. So, the hydrocarbon accounting in DPR starts from well.

“Once you drill a well, you will need to have what we call a maximum efficiency rate to know the capacity of that well to produce. The volume accounting starts from that point. In hydrocarbon accounting, we have static measurement and we have dynamic measurement. “The static is the volume that went into the tank that you can dip and know the volume, while the dynamic is the volume that goes across the meter.

We have two kinds of meters: we have production meter where you measure the volume of oil produced and we have custody transfer meter where you measure the volume of oil that exchanged hands. “What we do is to take inventory of all wells producing in every field based on the volume we give. What that means is that such a well cannot produce more than that. If you underproduce, you can kill the reservoir. If you over-produce, you can also kill the reservoir.

“All these volume measurements, whether static or dynamic, we take record of them. So, where is the problem? “The problem is that we have 30 terminals in Nigeria and out of these terminals, five are land terminals. Most of the thefts that occur in the system are coming from land terminals because the land producers have to use pipelines to transport the crude into the terminals for export. “In the process, you have a lot of third party interferences and that is the points of theft.

They take this in small volumes that eventually account for the larger volume that is stolen. So that explains most of the discrepancies in production and export and you can easily calculate the theft volume. “The theft volume comes from the land terminals.

But the offshore terminals, it is actually practically impossible to steal crude from offshore terminals, since it is from the bottom of the sea to the FSO and then to export while the land terminals has to pass through the pipeline.

“So, what do we do? To just account for the entire crude, once we gauge the profitability through maximum efficiency rate, we follow the crude through flow stations, get to the terminal and then follow the terminal operation minute-byminute basis and you can easily account for the volume and know the volume that is missing. “Most of these criminals get the volume in small quantity, converge it in a badge and, at the end of the day, the volume they have taken does not have identity.

All hydrocarbon going out of Nigeria they all have a name and so, we have a niche for ourselves. But the stolen volume does not have any identity because it has been taken from several fields. “We call them crude oil value chain criminals. So, what we report is actual production volume and actual export. That is why you noticed the disparity and the enormity of losses that this country is making.”

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