For a very long time, Nigeria’s economy has been ravaged by the incessant crude oil theft that has made it impossible for the country to meet it’s crude oil production quota. The federal government disclosed that the country loses about 400,000 barrels of crude oil per day to theft, translating to a drop from 1.8 million to 1.4 million BPD.
Reports disclose that Nigeria lost a staggering $1 billion in revenue in the first quarter of 2022, endangering the economy of Africa’s top producer. This despicable trend of oil theft has continued to pose an existential threat to the oil and gas sector, and by extension to the Nigerian economy, if measures are not put in place to stop it.
In a bid to put a stop to crude oil theft in Nigeria, the Nigerian national petroleum company Limited (NNPC), has recently launched a mobile app to monitor crude oil theft in country. The launch of the mobile app took place in Abuja at the signing of renewed production sharing contracts (PSCs) agreement between NNPC and its partners in oil mining leases.
NNPC disclosed that the platform ‘Crude theft monitoring applications’, was created for members of host communities and other Nigerians to enable early reporting of incidents of oil theft, to spur immediate action from relevant security and government authorities. Also, they have encouraged whistleblowing which they revealed will be a relevant form of security.
During the launch of the app, the Group Chief Executive Officer of the NNPC Limited, Mr. Mele Kyari disclosed that Nigeria lost a whopping $4 billion to oil theft at the rate of 200,000 barrels per day in 2021, while admitting that pipeline vandalism in the country has become too difficult to control.
The federal government in its recent draft fiscal strategy paper for 2023 through 2025, disclosed that oil revenue underperformed due to significant production shortfalls, such as shut down resulting from pipeline vandalism and crude oil theft.
Speaking at the launch of the App, NNPC Chief Executive Officer Mr. Mele Kyari spoke in-depth on how efficient the app will be to help curb the menace of crude oil theft.
See what he said;
“The actions of vandals on pipelines have become a difficult thing to deal with. There are still ongoing activities of oil thieves and vandals on our pipelines and assets, very visible in the form of illegal refineries that are continuously put up in some locations and insertions into our pipeline network.
“Arrests have been made and vessels have been arrested by the Nigerian Navy. I commend the Armed forces, in the last three months, they have done a substantive work and have destroyed some illegal refineries.
“First, we have created a platform where members of the community and other Nigerians can report whenever incidents of theft occur and also reward them, and keep it confidential and private.
“We at the NNPC will guarantee absolute privacy on any such report that comes and I’m directly managing this myself as no one will be exposed.”
“Secondly, on an international scale, companies must report suspicious sales of crude. Every oil that leaves this country has a unique registration number that is issued by the NNPC and also validated by the OPEC commission. And I know that the destination reporting framework has been put up by the Commission.
“Ahead of this, we are also creating a platform where end-users, particularly investors and traders, can validate the crude they are handling from Nigeria as their only source. And whenever they have no validation report, then they must world.
“If they don’t do this, as I always say, our companies are international, which means they are part of the riggers and whenever we discover this, we will take necessary actions against them. And I’m sure that our partners will cooperate with us, to make sure that this is done. That way we know that we are looking at the market and also curtailing our local issues.
“To ensure that we respond to this situation and this also, we can’t do without government engagement and involvement, particularly government security agencies and also members of the community. We have put up a very robust framework for ensuring that we curtail this menace and we are already seeing results. Needless to say, there are still ongoing activities of vandals in our pipelines or oil thieves on our assets.
“This is very visible in the form of illegal refineries that are continuously put up in some locations and also insertions into our pipelines network. We are reacting to it, we are doing many things surrounding it. There are massive actions by our government agencies just to make it clear to us”.
Hopefully, this recently launched app will be able to reduce the amount of crude oil theft in the country, making it possible for Nigeria to meet its crude oil production quota and benefit from high oil prices.
Oil Revenue Threatened.
According to the Punch, Nigeria’s oil revenue is threatened: “Nigeria’s oil production slumped by 28 million barrels between January and July 2022, threatening the Federal Government’s N9.37tn oil and gas revenue target by the end of the year.
“The Federal Government, in the 2023-2035 Medium Term Expenditure Framework & Fiscal Strategy Paper recently presented by the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, blamed oil production shut-ins due to pipeline vandalism, crude oil theft and high petrol subsidy cost.
“Most industry experts who spoke with The PUNCH on Sunday also attributed the decline to oil theft, which appears to have defied solutions.” Possibly, with this app, we can find a solution.