Recently, Shell Petroleum Development Company (SPDC) decried loss of 10,000 barrels of crude oil per day from its operation valued at an average of $560,000 daily. This is a huge loss of resources by a nation that is struggling to boost its revenue base to bolster its fragile economy. OLATUNDE DODONDAWA examines the possibility of ending crude theft and pipeline vandalism in Nigeria.
P IPELINE vandalism is the willful act or deliberate act of damaging petroleum products pipelines with the sole aim of stealing crude oil and associated petroleum products. Pipeline vandalism often leaves in its trail a myriad of problems including massive bleeding of the economy as a result of losses from pipeline shutdowns cum shut-ins in the case of upstream operations as well as losses arising from barefaced theft of crude oil and other petroleum products. Besides loss of lives, property and environmental degradation are all resultant effects of pipeline vandalism.
According to January 2019 edition of the Monthly Financial and Operations reports of the Nigerian National Petroleum Corporation (NNPC), a total of 231 pipeline points were vandalised across the country. While Mosimi-Ibadan and Ibadan-Ilorin lines accounted for 67 and 62 vandalised points respectively, representing 29 and 27 per cent of the total pulverised points, the Aba-Enugu accounted for 30 vandalised points or 13 per cent of the total vandalised lines while line breaks in other locations represented the balance of 31 per cent of total line breaks throughout the country.
Six months after, in its June 2019 monthly report, NNPC recorded a 77 per cent rise in oil pipeline vandalism and recorded 106 pipeline breaches up from 60 breaches in May.
In April 2019, AITEO declared force majeure, on its 97 kilometer 150,000 barrels per day Nembe Creek Trunk Line which leads to the export terminal at Bonny Island, Rivers State, due to third party interference.
The company’s spokesman, Mathew Ndiana-Abasi stated that “We have been informed of a fire outbreak by our surveillance team comprising the JTF, FSS around NCTL RoW near Awoba today, 21 April 2019. Our Operations Emergency Response team was immediately activated and following its urgent intervention and containment action, we are constrained to shut in injection as well as other related operations into the NCTL. In accordance with standard procedure, we requested the other injectors to do same.
“The NCTL has, hitherto, enjoyed smooth operations preceding this incident, founding suspicion that this fire may have occurred through an illegitimate, third-party breach of the functionality of the pipeline, critical national asset.”
On the 9th September 2019, the Shell Petroleum Development Company of Nigeria Limited (SPDC) cried out for help from government, communities and other stakeholders to address the loss of 10,000 barrels of crude oil worth $560,000 daily from its pipelines to crude oil theft, vandalism.
“These are critical national assets with 55 per cent government interest and they produce the crude oil that accounts for over 90 per cent of Nigeria’s foreign exchange and the bulk of government revenue. Hurting these assets means hurting the nation’s revenue, the economy of the states, the health of the people and the environment,” SPDC’s General Manager, External Relations, Igo Weli, said during a media workshop on Pipelines Right of Way Encroachment and Vandalism held in Port Harcourt, Rivers State.
“Crude oil theft on the pipeline network resulted in a loss of around 11,000 barrels of oil a day in 2018, which is more than the approximate 9,000 bbl/d in 2017”, Weli said, adding that since 2012, SPDC had removed more than 1,160 illegal theft points on its joint venture pipelines in the Niger Delta.
Despite measures by the government to safe face by entrusting private security contractors to monitor pipelines, the country continues to bleed as its revenue from oil continues to go south and environmental degradation continues to worsen especially in the Niger delta region.
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Speaking recently in Abuja on the theme ‘Pipeline Assets, Critical Backbone to Socio Economic Development, the Group Managing Director, NNPC, Mele Kyari, stated that The cost of vandalism, which includes fatalities, loss of revenue, asset and environmental degradation, affects everyone. Lost revenue, possible loss of employment, collateral damage to national image, loss of investor confidence, et al, will obviously affect everyone in the long run.”
He said this remained challenge stakeholders must come together to find a lasting solution to, in order to end the menace.
Kyari said that the importance of pipelines could not be overemphasised, adding that when there are no pipelines to transport petroleum products, the alternative is to transport by trucks.
He said that the high number of trucks involved in daily transportation of products over long distances contributed to highway accidents and deterioration of the nation’s road network.
He called on all stakeholders including pipeline professionals, communities, government institutions and industry players to tackle the menace.
Kyari said that the corporation would deploy technology, physical deterrent interventions and other soft options to arrest the menace.
He reassured that the NNPC would work with the Pipeline Professionals Association of Nigeria (PPAN) to improve reliability of the pipeline network to find a lasting solution against the menace of pipeline vandalism.
The Chairman of PPAN, Mr Jeff Onuoha, said that pipeline remained the backbone in the business of oil and gas.
He said that there was urgent need to secure the nation’s pipeline network to ensure economic growth and development.
“If you don’t have pipeline to transport products, you don’t have any business, because you cannot evacuate without good pipeline network,” he said.
In his remarks, Mr Chidi Izuwa, Director General, Infrastructure Concession Regulatory Commission (ICRC), said that infrastructure development remained key to development.
He said that Nigeria required billions of dollars annually to tackle its infrastructure challenge and that Public Private Partnership should be adopted to achieve it.