Why Crude Oil Theft Will Continue


George Osahon, director, department of petroleum resources, says crude oil theft and pipeline vandalism will continue as long as his department lacks the needed tools to combat their menace

By Anayo Ezugwu  |  Aug. 19, 2013 @ 01:00 GMT

THE current unabated pipeline vandalism and crude oil theft may continue in the Nigeria in the next couple of months. The Department of Petroleum Resources, DPR, on August 5, said it was handicapped in stemming the rising incident of pipeline vandalism and crude oil theft in Nigeria. George Osahon, director, DPR, expressed the hopelessness during a visit of the House of Representatives Committee on Petroleum Resources (Upstream) to the DPR. Osahon said that the DPR was not empowered to monitor the pipelines and was presently not in a better position to address the irregularities.

According to him, the DPR was not an enforcer and does not carry arms, adding, that it intends to put in place the necessary machinery to address the ugly trend. He appealed to the National Assembly to assist the DPR in any way it can to address the challenges of crude oil theft and vandalisation of oil facilities.

Osahon urged the federal government to take steps towards addressing this worrisome trend, calling for an urgent military intervention in protecting oil facilities across the country. “Limited funds availability has hindered the DPR from carrying out what it should have done. Another issue is crude oil theft and gas flaring. The DPR alone cannot solve the issue of crude oil theft. Urgent steps need to be taken, such as military intervention,” he said.

The House Committee, who visited the DPR as part of its oversight function, expressed displeasure at the high incidence of crude oil theft in the country. The committee said that the country was losing about 400, 000 barrels of oil per day. Ajibola Muraino, chairman of the committee, said the development was threatening Nigeria’s revenue and if unchecked, will attain a worrisome dimension. According to him, the country loses 400,000 barrels of crude per day which translates into a loss of about $42.728 million (N6.836 billion) daily, $1.282 billion (N205.08 billion) monthly and $15.38 billion (N2.461 trillion) annually. “This amount is equivalent to the total daily crude output of about 14 countries. This is nothing to be happy about,” he said.

House committee during press briefing
House committee during press briefing

Muraino emphasised the need for the DPR to be alive to its responsibilities in line with the country’s dwindling crude output, which is likely to threaten the country’s revenue in the years ahead. The committee made some recommendations on how to reduce crude oil theft and called on the federal government to immediately implement the proposal of the committee.

Among the recommendations, he said, is that the government should establish a dedicated telephone line that would enable Nigerians to report any act of vandalism in their area; the federal government should discontinue the use of private security outfit in policing oil installations nationwide since these private security outfits make use of military and para-military personnel; government should also deploy security operatives to the export terminals where ships take off with crude oil to other countries and when security operatives are deployed to these export terminals, they will be able to determine ships that are carrying stolen crude oil.

He, however, commended the DPR for its exceptional performance over the last six months, saying that the agency had surpassed its revenue target for the period by N86 billion. According to him, DPR’s approved revenue for the period, January to June 2013 was N383 billion, but on proper scrutiny of the books, it was discovered that the DPR had generated about N470 billion.

Muraino called on the DPR to step up efforts at increasing its internally-generated revenue, saying that the committee was expecting a proposal from the DPR on how to grow its earnings. He directed the DPR to ensure that petrol was sold at the official rate at filling stations across the country by stepping up its monitoring activities and putting in a place dedicated telephone lines, whereby members of the public can report sharp practices in filling stations.

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