Oil & Gas
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Federal government gives a 10-day target for stakeholders in the oil and gas sector to fashion out measures to tackle crude oil thefts in the Niger Delta area
| By Anayo Ezugwu | Jul. 8, 2013 @ 01:00 GMT
NIGERIA faces a critical situation in the months to come as crude oil production has continued drop. In the month of June alone, crude oil production dropped by 150,000 barrels per day. The drop has been attributed to persistent crude oil theft and pipeline vandalism in the country. For instance, on April 18, it dropped by 150,000 barrels prompting the Nigerian National Petroleum Corporation, NNPC and the Shell Petroleum Development Company of Nigeria, SPDC, joint venture to declare a force majeure on Bonny crude due to incessant crude oil theft. In May, crude oil production also dropped by another 127,000 barrels per day, prompting the declaration of force majeure on the Usan crude by the Total Plc.
The SPDC and the NNPC confirmed that oil production has dropped, but provided no further information on how long the drop would last. The SPDC, which shut down the Trans Niger Pipeline, TNP, on June 19, following an explosion and fire at a crude theft point on the 28 section of the facility at Bodo West in Ogoniland, said that some 150,000 barrels of oil per day will be deferred from the closure of the TNP.
Mutiu Sunmonu, country chair, Shell in Nigeria, who confirmed the drop, said the oil company closed the 24 TNP as a precautionary response to the fire that occurred on the pipelines. This, according to him, means that the entire TNP system comprising the 28 and 24 pipelines have been shut-in. He said the 24 TNP would be reopened whenever it was safe to do so, while the 28 TNP would remain shut-in until the fire was extinguished, and investigation and damage assessment completed.
“This is another sad reminder of the tragic consequences of crude oil theft. Unknown persons continued to reconnect illegal bunkering hoses at Bodo West even as our pipeline team was removing crude theft points. It was, therefore, not surprising that the fire occurred from the continuing illegal bunkering even as a previous crude oil theft point was being repaired by the team. So far, there is practically no spill from this event as the oil is burning off. What is visible in the water is from an earlier oil spill, which was also as a result of oil theft. The explosion also triggered a fire on a nearby barge. Crude theft continues to pose significant challenges to people, the environment and the local and national economy, and all stakeholders must work together to stop this criminal activity,” he said.
Tumini Green, acting group general manager, public affairs division, NNPC, said crude oil production dropped in the first quarter of 2013. She said daily crude oil production fluctuated between 2.1 million and 2.3 million barrels per day during the first quarter of the year, compared with the projected estimate of 2.48 million barrels per day, adding that the federal government also lost about N191 billion to oil theft and vandalism in the first quarter of the year.
“Expectedly, this fall between actual production and forecast in the first quarter of 2013 has resulted in a drop in crude oil revenue of about N191 billion that should have accrued to the federation account. Investigations showed that 53 break points were discovered along the 97-kilometre Nembe Creek Trunkline. Repair work is expected to last about six weeks. This will further reduce our April and May monthly average to about 2.2 million bpd and further decrease crude oil revenue that should have accrued to the federation account by about N83 billion,” she said.
The Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, which had earlier threatened to go on strike if the federal government did not halt oil theft and pipeline vandalism, said the union is waiting to see government actions before deciding on their next line of action. Achese Igwe, national president of the union, said the drop in crude oil production was as a result of incessant crude oil theft and pipeline vandalism going on in the country. He urged the federal government to take urgent measures to stem the decline and ensure that revenue accruing to the government was not affected.
“Government must change tactics and strategies in the fight against crude oil theft and pipeline vandalism. We urge the federal government to introduce new technologies like monitoring sensors and alarm systems that will trigger off whenever any pipeline is being tampered with. Such measures, with the collaboration of the host communities where these pipelines traverse would check crude oil theft from the pipelines,” he said.
Meanwhile, the federal government on June 20, set a 10-day target for the stakeholders in the oil and gas sector to fashion out sustainable measures of tackling the oil theft and pipeline vandalism in the country. Diezani Allison-Madueke, minister of petroleum resources, said that the stakeholders have set out modalities to enable them tackle the problem. “We are continuing with what has been done but we are becoming much more aggressive. We met with a number of the multinationals, we have come up with various pointers which must be addressed in an in-depth manner over the next 10 days. A technical team is going to meet across all the stakeholders. It will break into various committees. Like I said, it is an issue and must be addressed by a multi-pronged pushback. So, within the next 10 days, we will form the relevant committees. They will meet and then we will move to implement the recommendations very aggressively,” she said.
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