SUCCESS NWOGU 
NEITI
The Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Dr Ogbonnaya Orji, during the opening ceremony of the 2024 NEITI board retreat/meeting in Lagos, said Nigeria lost $1.84 billion worth of petroleum products from refineries in nine years. He explained that estimated at 140,000 barrels per day, 4.2 billion litres of petroleum products were lost from the refineries as a result of oil theft between 2009 and 2018.
Baffled by the increasing rate of oil theft, the NEITI boss said: “Figures contained in our 2009 to 2020 audits have put Nigeria’s losses to crude oil theft over a 12- year period at 619.7 million barrels valued at $46.16 billion or N16.25 trillion. Similarly, between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.”
Metering errors
But while many stakeholders had identified crude oil theft as the reason for the whopping loss, the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engineer Gbenga Komolafe, introduced another dimension to the discourse. For him, about 40 per cent of perceived oil theft in Nigeria is actually due to metering errors.
In a recent interview with Arise TV , the CCE said that apart from reducing the volume of oil available, oil theft also discouraged foreign investors from investing in the country. He said: “In the course of the independent integrity audit, it was revealed that about 40 per cent of what is adjudged crude oil theft actually are attributable to what is called metering inaccuracies. “And if this is fiscalised, we’ll realise that the nation will be saving billions of dollars annually.”
He then highlighted the roles being undertaken by the NUPRC to curtail crude oil theft. “The NUPRC, upon assumption of duty, that is the current leadership of the NUPRC under my team being the pioneer management, we indeed commissioned an independent study, and that study revealed that we were losing, as at the time we were losing about 100 to 120,000 barrels of crude per day.
“But the good thing now is that we’ve witnessed a drastic reduction in the volume of crude oil theft that we were experiencing arising from the multifaceted actions being taken by the general security services, the NNPC and the regulators. “So, there has been a concerted approach by the government in trying to curtail the menace of crude oil theft in Nigeria.”
But an oil and gas analyst, Chike Irooh, said attributing 40 per cent of crude oil theft or underproduction to metering inaccuracy was either underplaying the act or being economical with truth. He stated that if inaccuracy of metering was a plausible reason, why has the country consistently been under-producing?
He said it was debatable whether inaccurate metering could also be adduced as the reason while Nigeria has been under-producing below its quota of 1.380 million barrels per day from January 2024 to December from the Organisation of Petroleum Exporting Countries (OPEC). According to OPEC’s monthly oil market report Nigeria produced 1.276mbpd in June; 1.251mbpd in May, 1.281mbpd in April; 1.231mbpd, March; and 1.322 mbpd in February.
Expert’s view
An energy sector analyst, Lilian Ogene, said it was worrisome that metering of pipelines will still be an issue in 2024. In an interview with New Telegraph, she stated that many suggestions had been made in the past to the government on the adoption of technology to stem crude oil theft.
According to her to her, if such measure had been adopted, the country would not be losing so much as the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari, had in April 2022, said Nigeria lost $4 billion to oil theft at the rate of 200,000 barrels per day in 2021. Also, last September, the NNPC Ltd also stated that Nigeria loses 470,000 barrels of crude oil monthly amounting to $700 million to oil theft.
Her view resonated with a former Group General Manager in charge of Research and Development division at the Nigerian National Petroleum Company Ltd., (NNPC Ltd), Mr Benjamin Obaigbena, who had in the past said that Nigeria could have saved $20 billion by deploying technology to tackle oil theft. He called on the Federal Government to deploy technology in solving the hydra-headed monster called crude oil theft. He said that Nigeria should not
2009 to 2020 audits have put Nigeria’s losses to crude oil theft over a 12-year period at 619.7 million barrels valued at $46.16bn or N16.25tn. Similarly, between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion
feign ignorance of the humongous volume of oil theft for the past decades maintaining that it deliberately “let loose the baby tiger into the wild which has now matured to a monstrous size and sophistication to evade being caught or detected.” He recalled that earlier, a think tank of NNPC then, the Consultancy Services Unit (CSU) based in Lagos proposed the use of technology to monitor the distribution of crude and product lines using the principles of Telemetry/ SCADA where NNPC could monitor real time distribution activities of the pipelines along the country’s arteries of pipeline network.
According to him, with the deployment of that technology, vandalism along the distribution lines would have been instantly detected with tell-tale blinking lights or audible alarms displaying the coordinates of the location on the screen. He added that the signal is immediately dispatched to the nearest military base for immediate dispatch of anti-terror personnel to swoop the area and contain the menace.
He said: “This idea was muted at the presentation venue and did not get to top management of NNPC at that time because of the associated high cost to deploy such technology. “That costly decision to mute the idea did not consider the long term cost- benefit implications. If that technology was deployed at that material time, the country would have saved more than $20 billion or more to date.
Apart from the long term cost saving, the technological experience in managing the pipeline surveillance and security over the years would have been extended to our railway and road networks for the same purpose. “This 1995 technology has advanced to modern and faster technology with many adds ons (e.g. use of HD video cameras to capture footage needed in identifying and persecuting the criminal bunch in court, SMS, long distance drones, cloud storage, satellites, etc.).
“It is still not too late if we prioritise the need to deploy this technology. The money to acquire this technology can be generated if we can significantly reduce the huge wastage from the three tiers of government which are too numerous to mention here. The government can reengineer its processes to save cost and improve efficiency in delivery of their goals.”
Joining in the call, the Facilitator of the Niger Delta Democratic Union, (NDDU), Dr. Akpo Mudiaga –Odje, appealed to the Federal Government and NNPC Ltd to tell Nigerians with arithmetic certainty the amount of crude oil the nation produces, daily, weekly, monthly and annually. He said it was unsavouring that there is no certainty of the nation’s crude oil production, adding that without such reliable data, there could be holistic room for manipulation in the system.
He said: ”I recall that in 1984, the former Chief of Staff, Gen Tunde Idiagbon, usually as a commendable practice, publicly disclosed how many barrels of crude oil sold as well as income made from the same to Nigerians every month. “This is the act of transparency we urgently require from the Federal Government of Nigeria and the NNPC Ltd to get first-hand information on this vexed issue.
“The nation is ripped off by the non-disclosure of the amount of crude oil produced daily and/or income accruing to the Federation Account from such sales. “We, therefore, call on the NNPC Ltd especially, to procure the necessary equipment to enable it to ascertain the amount of crude oil we produce and export daily so that Nigerians can get a piece of first-hand information on the sale and management of their commonwealth.
”The most important priority now is for the NNPC Ltd to immediately procure the required equipment to determine the quantity of crude oil we produce in this country every day, every week, every month, and every year.”
Remedy
Recall also that in October 2022, the then Chief Executive Officer, the Petroleum Training Institute (PTI), Henry Adebowale Adimula, at the institute’s 50th anniversary, said PTI would collaborate with the NNPC Ltd to install anti-theft integrated monitoring systems on pipelines to protect the facility against oil theft. According to him, the institute had developed an oil anti-theft integrated monitoring system for oil facilities.
He said: “We’ve produced an oil anti-theft integrated monitoring system for pipeline monitoring, and an air quality monitoring system. “We have Al’s and have developed a corrosion robot for early detection of localised corrosion and prevent loss of integrity of the facilities, among others.”
Speaking on the issue, Kyari said the national oil firm was pleased to hear what the institute had done in terms of pipeline monitoring and added that NNPC Ltd would work with the institute to deploy the technology to further boost the monitoring of the company’s pipelines with a view to addressing crude oil theft in Nigeria.
All eyes are on the FG and the NNPC Ltd to once and for all adopt appropriate technology to accurately determine the nation’s production and stamp out crude oil theft in the country’s oil and gas sector. One hopes that it will be a reality with the assurance by Minister of State for Petroleum Resources (oil), Heineken Lokpobiri, that the Federal Government has approved a contract for the construction of a metering system for all crude oil flow stations in Nigeria.Flow stations are facilities where fluids, usually natural gas or crude oil, are gathered from a pipeline and processed.
Last line
The contract which if effectively implemented would make the country to meter about 187 flow stations, has been approved by the federal executive council (FEC) while the contract awarded would be for a period of 180 days (six months).
