Oil theft: Adopt efficient tech to avert N995bn loss annually, FG told
…Stakeholder want Shell sued for $407m under-declaration
Mathew Dadiya
Stakeholders in the oil and gas sector have advised the Federal Government to adopt modern technology in oil and gas production and management in order to avoid the continued loss of an estimated N995.2 billion yearly due to crude oil theft.
The stakeholders emphasised that except the Federal Government adopts efficient technology in metering and mapping movement of crude from extraction to exportation, it would not get the optimum revenue from the oil sector.
Niyi Awodeji said this on Wednesday while presenting a report on oil theft by the Nigeria Natural Resource Charter (NNRC), during an advocacy against crude oil theft and stakeholders engagement seminar organised by the New Nigeria Foundation (NNP) in Port Harcourt, Rivers State.
Awodeji, who spoke on behalf of the stakeholders, called for stringent penalties for oil thieves and their collaborators in the country.
He said that combating crude theft would not only end the loss of N995.2 billion yearly, but would result in increased oil production, export and revenue, thus paving way for economic diversification and investments.
According to Awodeji, Nigeria continues to suffer oil theft due to under-declaration or underestimation of barrels received at any point of the extraction process so that the perpetrators could sell the rest in the black market.
He stated further that “inflated volumes from drilling, through production to receipt at the refinery allowed for by the oil industry, saying this led to white collar crude theft by oil companies.
This practice, he added, occurs “mainly at tank farms, refineries and distribution centres owned and operated the companies.”
Awodeji also alleged that oil companies under-declared crude oil production to avoid paying petroleum profit tax.
He advised the Federal Government to sue Shell for $407 million in 2016 for under-declaration between 2013 and 2014.
Awodeji also maintained that there were also 15 other suits against 15 oil companies for $12.7 billion.
He said: “Crude oil theft occurs in the course of vandalism of infrastructure to divert oil from its intended destination.
“Between 2003 and 2013 there were 15,685 pipeline breaks caused by vandalism, while in 2016, Shell reported daily loss of 5,660 barrels per day (bpd) just as most of the siphoned oil were refined locally in firewood refineries.”
He decried the high rate of oil bunkering in the Niger Delta and the method used by crude oil thieves, disclosing that “small ships often anchor near pipelines, drill and siphon crude, which is then taken to larger oil tankers on the high sea.”
“The process is repeated multiple times till the tanker is full. There are usually multiple siphoning points with hoses up to 2km used and barges can take between 3,000 to 18,500 barrels of crude, while tankers can take from 31,000 to 62,000 barrels of crude,” he added.
