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Nigeria lost over N51.28bn worth of oil to activities of petroleum pipeline vandals in 2015, the Nigerian National Petroleum Corporation (NNPC) has said.
Oil, the mainstay of Africa’s largest economy has been the bone of contention between the government and the Niger Delta militants.
The contention is responsible for the loss of national revenue, which has hindered the production of 2.2 million barrels per day (BPD) Nigeria’s oil export quota. The national budget is hinged on oil production.
NNPC’s record revealed that in 2015, more than 643 million litres of petrol was lost in 3,000 incidences of vandalism. Between 2010 and 2015, 18,000 cases of pipeline disruptions were reported. Between January and May 2016, no fewer than 1,447 incidents were recorded which was responsible for a loss of 109 million litres of petroleum products and 560,000 barrels of crude.
Group Managing Director (GMD) of the corporation, Maikanti Baru said in 2016 that: “Domestic natural gas supply to power is equally impacted with estimated drop of about 50%, resulting in significant power outage.”
He stated further that, “Petroleum products supply and distribution pipelines have also suffered huge products losses with attendant cost of repairs.”
The NNPC said on average, the country experiences 3,000 vandalism incidents every year from 2010 to 2015. The 2015 disruption which cost the country 643 million litres, amounted to N51.28 billion loss of revenue.
Meanwhile, repairs of vandalized oil facilities may lead to more output after repairs during the year. According to Nigeria’s Petroleum Minister, Emmanuel Kachikwu who was monitored in a report from Bloomberg.com, “The country will revive oil production this summer as it completes maintenance and repairs, and expects fellow OPEC members to continue to cut their output in the second half of the year.”
When Olu Akinwe moved into his own apartment at Ebute Ojora, Ogun State Nigeria in 2006, the community, about an hour drive from Lagos was a peaceful haven.
The relative peace was once enjoyed in the community later was terminated when oil pipeline vandals moved into the environment.
Akinwe, a staff of the Nigerian Export Promotion Council, Lagos recalled, “It was once a peaceful terrain though with little history of oil theft since 2003.”
This according to him informed his relocation with his family to a rented room in another part of Ogun State.
Akinwe is not the only one in dire straight. Hundreds of people living along the 12,714km pipeline routes in Nigeria have since been displaced due to the nefarious activities of the vandals.
The NNPC disclosed October 2016 that the Federal Government lost a total of $7 billion (about N2.1tr then) to activities of vandals and Niger Delta militants.
Baru in a presentation on ‘Global Oil Prices, Militancy and Terrorism and its Impact on Government Revenue in Nigeria,’ observed that “Over 7,000kpd has been lost to vandalism this year (2016). A bulk of the loss is from JV assets. This implies that 60 percent of oil production lost is NNPC-FGN equity,” he added that, “At an estimated price of $45 per barrel, the total 2016 revenue loss to the Federation Account translates to about $7bn. This is money that the government could have used to achieve major infrastructural milestones.”
Opeyemi Agbaje, a policy analyst and founder of RTC Advisory Services Limited, Lagos, Nigeria said “For the economy largely based on oil and gas to regain its stability, there is the need for policy makers to make sincere policies especially on diversifying the economy while the government employs political will to implement such right policies.”
Nigeria now occupies spot 15 on the chat of oil producing countries who are also members of the Organisation of Petroleum Exporting Countries (OPEC). Falling from 2million barrels per day to 1,476,000BPD which the budget is hinged on, the nation must work extra hard to conquer current depression since crude is her major export.
According to Trading Economics, Nigerian crude oil production decreased to 1,269 BBL/D/1K in March 2017 from 1,426 BBL/D/1K in February 2017. The production was at an all-time high of 2,475 BBL/D/1K in November 2005.
The corruption in the oil sector may not allow the nation have much dividends on her oil output. Nigeria was described as being ‘fantastically corrupt’ by former British Prime Minister, David Cameron and the statement drew the ire of the government.
Meanwhile the Transparency International however then rated Nigeria as the 136th corrupt nation of 175 nations assessed in its 2016 Corruption Perceptions Index report.
It would be recalled that some primary school children, over 15 homes and over 20 vehicles were on 15th May 2008 at Ijegun, a Lagos suburb burnt when a pipeline exploded after a bulldozer struck an oil pipeline during excavation. This and many are the hazards being faced by Nigerian communities situated along the pipeline routes.
Also, about 260 people were roasted alive on Boxing Day of 2006 around Abule Egba, another Lagos suburb hosting petroleum pipelines. A gasoline line was tapped during the early hours and while the product gushed which later resulted to a fire outbreak.
The quantum loss associated with the incessant activities of vandals who live on oil illegally should necessitate a strict legislation which must be enforced.
In Nigeria the Petroleum Production (Anti-Sabotage) Act of 1975 governs the petroleum vandalism law the Act states that any person who willfully does, aids, incites, counsels another with the intent to obstruct or prevent the production/procurement/distribution of petroleum products in any part of Nigeria will be guilty of the offence of sabotage, and is liable to a death sentence or a term of imprisonment of up to 21 years.
The legislation seems good but perhaps lack of political will, adequate enforcement on the part of the authorities is responsible for the impunity of those bent on living on the pipelines.
A researcher, Omawumi Eyekpimi in a paper titled ‘Causes and Effects of Pipeline Vandalism in Nigeria published 2016 on an online platform; InfoGuide Nigeria, revealed that Oil and Gas production in Nigeria consist of 386 oil fields, 2,800 production oil wells, 3 refineries including various onshore and offshore platforms spanned across the Niger Delta.
With a stretch of Petroleum pipeline networks covering over 31,000sq km across the country, a nation whose economy is virtually living on the pipelines must back legislation with action to secure the goose that lays the golden eggs.
Meanwhile, some of these pipelines are ageing and vulnerable. Eyekpimi gave that due to corrosion and rupture, due to old age (50%), sabotage (28%), production operations (21%), and poor pipeline security, these pipelines face severe vandalism, thereby causing oil spills, fire outbreaks and blow outs.
The country must as a matter of urgency back the legislation protecting the pipelines with actions strong enough to deter those afflicting the economy. If this is done, a lot would be saved and channeled to other developmental efforts.
