The Nigerian National Petroleum Company Limited (NNPCL) is ramping up its campaign against crude oil theft in the Niger Delta region as Nigeria’s oil production faces significant declines. In a recent update on its anti-crude oil theft efforts, the state-owned company revealed it had uncovered 162 illegal pipeline connections and illegal refineries, primarily in Bayelsa State.
The NNPCL’s documentary, which lasted two minutes, disclosed that between July 15 and 21, a total of 93 illegal pipeline connections and 69 illegal refineries were discovered and subsequently dismantled in the Aboa and Gbokoda areas of the Niger Delta. The company emphasized its dedication to combating large-scale crude oil theft, using its maritime intelligence system to identify these illegal activities.
The video report also mentioned the confiscation of 30 wooden boats allegedly used in transporting stolen crude oil. Additionally, it highlighted five recorded cases of oil spills in the deep blue waters during the same period. These findings underscore the persistence of crude oil theft in the Niger Delta, a matter of grave concern for the nation’s economy.
Notably, a self-proclaimed Niger Delta militant group, the Creek Reform Warriors, recently issued threats to attack major oil facilities in the region. The group’s leader, “General” Igbokuro Tinowei, demanded the reinstatement of workers from Ogulagha and Odimodi communities who were allegedly unjustly sacked by the Shell Petroleum Development Company of Nigeria Limited (SPDC) in 2019. This situation escalated tensions in the region.
Furthermore, Nigeria’s oil production faced setbacks due to incidents such as the leak at the Forcados terminal, which temporarily halted exports. Consequently, Nigeria became the second-largest contributor to the decline in OPEC crude oil output in July, as reported by a Reuters survey.
In August, the interception of the MT Praisel vessel, suspected of transporting stolen crude oil, in the Koko area of Delta State raised additional concerns. The vessel, which was reportedly accompanied by naval officers, was found to lack approval from the Nigerian Midstream and Downstream Petroleum Regulatory Authority for its oil transportation activities. This incident underscored the scale of illegal oil trading and its impact on Nigeria’s economy.
In response to these challenges, the NNPCL emphasized its determination to eradicate crude oil theft and collaborate with industry-wide security measures. This ongoing campaign is vital for Nigeria’s economic stability, as revenue losses from oil theft have been estimated at N2.3 trillion in 12 months.
Despite these challenges, Nigeria is looking to renegotiate its production quota within the ongoing OPEC+ cuts by November. Mele Kyari, the Group Chief Executive Officer of NNPC, expressed optimism about increasing crude oil production by 200,000 to 300,000 barrels per day by October. The country aims to push for an increased quota at the next OPEC+ meeting in November.
However, security issues, pipeline vulnerabilities, and crude oil theft continue to impede Nigeria’s oil industry. Crude oil exports are expected to drop by 12 percent between August and September, contributing to revenue losses. Addressing these security concerns remains a top priority to restore Nigeria’s position as a leading oil producer in Africa.
The recent incident involving the oil rig, The Majestic, owned by Depthwize Nigeria Limited, further disrupted oil production. Although most of the crew members were safely found, the incident serves as a reminder of the challenges facing Nigeria’s oil industry.
As Nigeria grapples with the complexities of the global oil market and security issues, the path to economic recovery remains uncertain. The nation’s ability to improve crude oil production, enhance security, and counter crude oil theft will be critical in determining its economic outlook in the coming years.
