The Nigeria National Petroleum Commission (NNPC) has discovered an illegal connection line from one of its major oil export terminals; the Forcados terminal, into the sea that had been operating undetected for nine years.
The 4-kilometer connection from the Forcados export terminal which usually exports around 250,000 barrels per day (bpd) of oil into the sea was found during a clamp-down on theft in the past six weeks,
This is according to a report by Reuters which is based on the statement of Mele Kyari, group chief executive officer (GCEO), NNPC Limited when he appeared before the senate joint committees on petroleum (upstream and downstream), and gas.
Economic growth in Nigeria has been staggering due to an underperforming oil sector. NNPC had previously revealed that Nigeria loses up to 470,000 barrels of crude per day, amounting to a loss of about $700 million monthly.
Oil theft is hurting the country’s output. According to the October 2022 Africa’s Pulse by the World Bank, “oil output was down by 11.8 percent year-on-year in the second quarter of 2022 against 26 percent in the first quarter. It dropped for the fifth consecutive quarter (from 1.4 million barrels per day in the first quarter to 1.2 million in the second quarter), and slowed further in August to a 50-year low of 1.13 million barrels per day, behind Angola (1.17 million).”
The country has not experienced a windfall gain from oil earnings despite elevated oil prices. Several headwinds, such as theft on the pipelines, increasing petroleum product subsidies (deducted directly from the gross oil earnings), and limited investment in oil infrastructure prevent the economy from realizing gains from rising oil prices. Real GDP growth is expected to slow from 3.6 percent in 2021 to 3.3 percent in 2022, 0.5 percentage points lower than in April 2022
What they are saying
Kyari noted that the NNPCL has been carrying out aerial surveillance of the affected areas and saw economic saboteurs carrying out their activities unchallenged.
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He said, “in the course of the clamp down within the last six weeks, 395 illegal refineries have been deactivated, 274 reservoirs destroyed, 1,561 metal tanks destroyed and 49 trucks seized.”
“Oil theft in the country has been going on for over 22 years but the dimension and rate it assumed in recent times is unprecedented. The Brass, Forcados, and the Bonny terminals, are all practically doing zero production today; the combined effect is that you have lost 600,000 barrels per day when you do a reality test.”
“It is not only security but locals in most areas where the illegal refiners operate, unknowingly serve as their employees by mistaking them for operatives of licensed companies for oil exploration and production in the area,”
he said.The members of the state joint committee on petroleum proposed that severe punishment should be put in place for offenders, which will be presented at plenary for consideration.
