In a bid to ensure transparency and accountability in the oil industry, the Nigeria Extractive Industries Transparency Initiative (NEITI) has called for the implementation of the special investigative panel’s report on oil theft and losses, submitted to the federal government on March 28, 2023. NEITI made the call in a new policy advisory released by its Executive Secretary, Dr. Ogbonnaya Orji, in which the agency stated that the theft of Nigeria’s commonwealth by a few persons had done massive damage to the nation’s economy and therefore needed to be curbed.
This is not the first time the organisation is expressing concern on the oddities in the oil sector. It had earlier in its audit reports indicated that Nigeria lost 619.7 million barrels of crude oil valued at $46.16 billion or N16.25trillion in twelve years from (2009 to 2020). Oil theft and sabotage accounted for the huge losses.
According to NEITI, Nigeria lost 69.49 million barrels valued at $4.31billion in 2009. In 2010, 2011 and 2012, it lost 28.31million, 38.61million and 51.58 million barrels of crude oil valued at $2.29billion, $4.39billion and $5.82billion, respectively. Reports for 2013 to 2020 also showed that the losses to crude oil amounted to 78.30million barrels valued at $8.55billion.
Similarly, in 2014 and 2015, Nigeria lost 67.29 million barrels valued at $5.57billion. It record the highest loss of 101.05 million barrels of crude oil valued at $4.42billion in 2016. In 2017, Nigeria lost 36.46million barrels or $1.99 billion; 53.281 or $3.837billion in 2018; 42.248million barrels or $2.772billion in 2019; and 53.056million barrels or $2.21billion in 2020.
Worried by the serial losses in the oil sector, the federal government in December 2022, through the former National Security Adviser (NSA), Maj. Gen. Babagana Monguno, inaugurated an 11-member Special Investigative Panel on oil theft and losses. The panel was tasked to advise the government on short, medium, and long-term measures to tackle oil theft and losses in the industry. It was also required to establish the ramifications of crude oil theft/losses in Nigeria; ascertain the causative factors, immediate and remote of crude oil theft/ losses in the country; with the widest possible amplitude, identify persons/entities whether public, private or foreign, involved in the criminal enterprise; and ascertain the illegal insertion into the Trans Escravos Pipelines (TEP) around Yokri area in Burutu Local Government Area of Delta State.
The panel would also establish the level of culpability of identified persons/entities in the enterprise; examine the specific roles of regulatory agencies; security agencies, tiers/arms of government and International Oil Companies(IOCs) in aiding and abating the criminal enterprise; assess the efficacy of the security architecture/arrangement in tackling crude oil theft/losses and associated petroleum products and recommend appropriate, commensurate and sufficiently, deterrent sanctions on all those culpable. The panel was also expected to recommend steps, procedures, and processes to be taken by the government to eliminate the criminal enterprise in the industry and prevent future occurrences.
The panel submitted its report in March 2023 with far-reaching findings and observations. It discovered several layers of involvement in the illegal theft of crude oil. Among others, it observed that crude oil losses arose from lack of proper reporting of crude oil production, illegal refining, theft from well-heads and diversion from sophisticated pipelines network.
It also attributed losses to the absence of a robust industry-wide metering system and an unworkable security arrangement. The confusing roles of regulatory agencies was also cited as being responsible for making the detection of theft/losses difficult.
Unfortunately, six months after the panel submitted its report, it is yet to be implemented. We urge the federal government to study the report with a view to implementing its recommendations. If the government is desirous of ending oil theft, there is need to implement the report of the special investigative panel on oil theft. We say this bearing in mind that oil is the mainstay of Nigeria’s economy. Therefore, any threat to the sector will harm the economy.
Apart from harming the economy, oil theft has led to environment degradation and terrorism financing. Nigeria has also failed to meet its OPEC daily oil production quota of about two million barrels per day. The implementation of the panel’s report will hopefully address the challenges of the oil sector and attract foreign direct investments.
Government should also go after those involved in oil theft and prosecute them. Those found culpable should be punished severely.