Crude Oil and Gas is very important to Nigeria and Nigerians. This is a fact. Revenue from Crude Oil and Gas is the major foreign exchange earner for Nigeria. Anything that affects Crude Oil and Gas affects all of us in Nigeria and demands urgent actions to address it.
Theft of Crude Oil in Nigeria had been experienced in Nigeria for quite some time now. The quantities were usually small and the players were mainly locals with their plastic containers, aka jerry cans.
In recent times, the quantity of crude oil stolen in Nigeria has reached very alarming quantities. Depending on the source of information, quantities stolen range from 300,000 – 700,000 bbls per day. The people involved have also expanded beyond locals. International syndicates are now involved and they use sophisticated materials well beyond the jerry cans of the locals.
Thus, there is an URGENT need for action by all stakeholders to address the menace of crude oil theft if we are to survive in Nigeria.
This paper proposes alternative approaches (methods) for the protection of critical crude oil infrastructures. We cannot continue to do the same thing all over again and expect different results.
In The Beginning
At its early stage, crude oil theft was limited to few barrels used for local refining. The “operators” used plastic containers aka jerry cans and buckets to fetch the crude oil. Such stolen crude are usually “cooked” in locally fabricated “pots, drums” etc. The products of such boiling were sold in the local market including compromised Petrol Filling Stations and any similar outlet available.
It does appear that as the cooking and sell of the cooked crude oil, aka “kpofire” continued, their practitioners gained some wealth which reflected in their life styles. As is typical in Nigeria, other on-lookers, were drawn into the trade due to the success of the practitioners. Thus the number of persons involved continued to grow.
The Journey Continues
Truly, the theft of crude oil in Nigeria has continued to grow, as typically Nigerian. The volumes have continued to increase and the areas impacted have also continued to expand and increase. As at this moment, the volumes stolen has risen to the region of 300,000 – 500,000bbls. Some literature also states that volumes stolen are in the region of 600,000 – 700,000bbls. Some persons think that the volumes are under estimated.
At this point in our National Life, our focus is no longer on the estimation of the volumes of crude that are stolen. Rather our focus now is on how to reduce the quantities stolen and if possible eliminate it completely. While this goal may appear unrealistic and far -fetched, it is my belief that it is achievable. I am a Nigerian and fully convinced that, when we, as a people set our minds on a mission, we never turn back and we do not accept NO for an answer. This is my promise for this paper, that where we are united and committed, nothing is impossible.
The increase in volumes of crude oil stolen can only be possible through larger evacuation means and vessels. It is therefore not surprising that large vessels are now deployed. The implication of such vessels points to the fact that the thefts are well funded and managed by well resourced persons and organizations! This is the riddle that needs to be solved. In real terms, the questions to be answered include:
1. Who are the brains behind these thefts?
2. Who are their buyers?
3. Where do they pass?
4. Who are their service providers that do the ground work?
5. Who are those responsible for guarding the assets and preventing the theft?
The questions are many, mind – boggling and demand very honest and practical answers. I am sure that as Nigerians we can answer the questions truthfully and go on to fix the problems for our common good.
Current Situation
The theft of crude oil has grown in leaps and bounds. In fact, the current state is beyond the imagination of most people in Nigeria and beyond. The entire country is now aware of the magnitude of the theft.
What started as “petty” theft using plastic containers aka “jerry cans” has grown into use of large ships. What an effrontery! In previous lines, the theft was limited to infield crude oil flow lines, running from well heads to the flow stations. These days, well heads, platforms (crude gathering points), delivery lines are not spared. In fact, new lines have been welded unto delivery lines by non-government actors. These actions have led to very devastating environmental pollution incidents.
That the theft has extended to Platforms e.g. Afremo calls for urgent action. ‘Also, it has become common knowledge that the “thieves” have laid flow lines, hooked onto major delivery lines, for long distances and have been siphoning crude oil for years. In one report by NNPC MD, the lines are said to be over nine years old. WOW!
The above discovery calls for a review of the current asset protection measures in place!
Analysis: How broke Nigeria lost $10 billion to crude oil theft in seven months in Year 2022.
Between January and July, Nigeria, Africa’s biggest oil producer, lost an average of 437,000 barrels of oil a day to criminals.
Recommendations On Alternative Approaches To Protection Of Assets
At The Beginning
The protection of the oil and gas assets was done by deployment of civil guards, usually from the Communities. These guards were unarmed and they patrolled along the flow lines on a daily basis in groups. They reported any observed leakage or infraction to the Flow station Supervisors and Flow station Teams. Any observed leakage is fixed immediately and production was restored.
Incidents of production deferment and shut down of facilities were few and far between. The communities and the oil companies lived and operated harmoniously. The business of oil and gas production continued satisfactorily. The Nigeria nation was well of for it as oil revenues were guaranteed.
The payment and maintenance of the civil guards was by the oil companies. These guards were hired through a contractor, usually from the communities. It was a case of community persons providing guard services for the oil company in their area through a community contractor. community people were involved and protected “Community Based Assets”.
The Changing Times
It is safe to state that the success of the “jerry cans” oil thieves attracted other persons into the crime. Unknowingly, Nigeria was creating a crime economy through theft of crude oil. As more persons joined in the theft, which is typical of Nigeria, the volumes and areas of interest expanded. Also the thieves deployed arms and ammunition to the business. By so doing the unarmed community guards became scared and ineffective.
The volumes of crude increased as well as the means of evacuation expanded beyond “jerry cans”.
In response to this development, many oil and gas companies started the deployment of armed police personnel to the fields to support the Community guards. They acted as deterrents to the crude oil thieves. This deployment was through the Police Command in the Oil Producing States. Oil Companies paid allowances to the deployed. Steadily, the deployment of Police personnel became the norm across the Oil and Gas Companies.
The Present Times
Presently, the protection of the Oil and Gas Assets is by all the Government Security Forces (GSF) namely:
– Nigeria Police Force
– Nigerian Security and Civil Defence Corps
– Nigerian Army
– The Nigerian Navy
– The Nigerian Airforce
– Department of State Security
The above scenario confirms that majority (if not all) of Nigeria Security Forces are engaged in the protection of the crude oil and gas assets in Nigeria at very humongous costs to the oil Companies and the Nigerian nation.
Unfortunately, the resources deployed and the returns received have not been at par. The returns are not commensurate with the investments.
The Recommended New Approaches: In the current deployment of resources there are gaps observed in the service delivery. Some of the gaps include:
Accountability, Responsibility and Authority: There is no clarity of the person responsible for the protection of the crude oil and gas assets in Nigeria. With no clearly defined accountability, responsibility and authority, the job of protecting the crude oil and gas assets is an all comers job. The assets have been turned into orphans. They belong to everybody and no body. How sad! With this state of affairs, the current state of the industry is no surprise.
Delineation Of Areas Of Responsibility: The protection of the crude oil assets in tied the areas of responsibility (AOR) Approach of the Government Security Forces. These are usually tied to State Commands as well as the higher zonal and divisional commands as applicable to the Forces.
Shorter Delivery Routes: Currently, the major export terminals are owned and operated by the IOCs’ in JV with the Government – NNPC Limited. These terminals include -forcados & Bonny – Shell, Ibeno – EXXON MOBIL, BRASS – NAOC, etc. These terminals collect and gather all the products of the IOCs for treatment and expert. With the development in the Marginal Fields, these Marginal Fields Operators also produce into the Crude Lines of the IOCs for export. Usually the crude lines of the IOCs travel very long distances, through difficult terrains, mostly uninhabited. Typical lines like TNP are subject to sabotage because of their remote locations. Based on our experience in recent times, we recommend the use of shorter delivery lines that can be monitored easily.
Beyond the delivery lines of the primary crude oil producers in Nigeria, even refined products lines owned by NNPC are not spared the theft treatment. Several incidents of fire and accidents arising from such thefts have been experienced in Nigeria with dire consequences.
Establishment of Modular Refineries in the Niger Delta
Obviously, the technology for crude oil refining is well entrenched in the Niger Delta. We need to create a formal platform for the youths to be formally engaged and given the right platform to contribute to our national development. We cannot continue to live in denial.
Alternatively, Government should create an environment that enables Niger Delta youths to set up their own Modular Refineries in a regulated manner as some of them have grown beyond being employees. The technology is their hands. We have to act to assure righteous use of the technology for our common good.
Regulation of the Use of Acquired Oil and Gas Knowledge and Skills: The proliferation and ease of availability of knowledgeable men and women in oil and gas industry is a challenge that must be managed and very fast too. The lack of control of these artisans to our national detriment.
It is recommended that all oil industry artisans must be registered and controlled. In fact on disengagement from their primary employments, they should be made to sign documents to the effect that they will not use their acquired skills to the detriment of Nigeria.
Creation of Dedicated Team for Protection of the Crude Oil Lines:
Currently, all the Government Security Departments are involved in protection of the Crude Oil Assets – NA, NN, NAF, Civil Defence, etc. It has become an all comers game with no one Group fully responsible. It is obvious as in this case, that too many cooks spoil the soup. The idea of collaboration among the Government Security Forces was good abnitio. However, our recent experience proves that the collaborations needs to be revisited.
It is our view that a dedicated group should be established for the sole purpose of guarding our critical oil assets. The Group should report directly to the President, being the Minister of Petroleum. In practical terms, the proposed group should be called – Nigeria Crude Oil And Gas Protection Group – NCADPG.
a. Membership: The Membership of the Group should be tenured for a maximum of two years.
b. The Members should be drawn from all the security forces
c. The Group should be remunerated separately from their parent Department. Their pay should compose of Base Pay (Parent Department + NCADPG TOP-UP. The component of the TOP-UP should be a factor of the success of the Group in preventing crude theft. The quantum of reduction in Crude Theft achieved should drive the TOP-UP. This will serve as an incentive to the Personnel.
d. Set-up: The Team should have dedicated Offices and Resource Base outside the control of their Core Departments.
Staffing of Oil Companies: It is observed that most of the personnel of the Oil Companies involved in the protection of the assets are not from the Niger Delta. Thus there is a gap in relationship management as communications is in English Language, which prevents proper understanding. It is our view that Niger Delta persons should be assigned to the Roles of protection of the ASSETS. They will leverage well into their backgrounds.
Institution Of Sanctions And Rewards
Presently, there is no sanction nor reward for the Oil Industry personnel. None of the personnel has been held to account for the ongoing actions in the industry. This is far from the known and internationally accepted norm in the Industry. Nigeria cannot afford to be different. There must be sanctions for officers that fail in their service delivery. Certainly, the rewards are plenty and are being enjoyed.
Conclusion: Crude Oil theft in Nigeria has reached very alarming proportions. Our country is bleeding as our common heritage is being taken over by non-state actors at our detriment. We cannot afford to fold our hands and wait. We must rise up to address this menace.
– Being a presentation by Emiyarei B. Ikuru, MD at the South-South Summit on the Protection of Critical National Infrastructures organized in Port Harcourt November 20-22 at Hotel Presidential Port Harcourt by Craft Center for Social Science Research.
