A Review of the Nigerian Energy Industry

NNPC raises alarm over Illegal bunkering in the Niger Delta

*Fears the region may face worst environmental disaster ever
*Non-passage of PIB may cost nation foreign investment

Oscarline Onwuemenyi

24 May 2012, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation, NNPC, has warned that the acts of illegal oil bunkering in the Niger Delta could expose the region to the worst environmental disasters ever faced in the history of the country.

The Corporation also disclosed that the country presently loses over 180,000 barrels of crude oil per day to oil thieves, warning that if unchecked, such criminal activities could cripple the nation’s oil and gas production.

The Group Managing Director of the NNPC, Austen Oniwon said this on Thursday when he hosted the House of Representatives Committee on Petroleum Resources (Upstream), led by its Chairman, Hon. Ajibola Muraina, who was visiting the Corporation’s headquarters in Abuja as part of the Committee’s oversight function.

Oniwon identified insecurity of oil and gas facilities due to acts of illegal bunkering as “the major problem we have in the industry.”

“We did have challenges with the issue of militancy several years ago, but we thank the government for the amnesty programme which yielded very effective results and was very successful in curtailing incidents of militancy in the Niger Delta.

“Unfortunately, the militants in the Niger Delta have been replaced by criminals. As of today, our activities and operations have been severely handicapped by the activities of these criminals. We lose, as of today, almost 180,000 barrels of crude oil per day to criminals. When you consider that the total amount of crude oil produce by Ghana that sustains that country is about 120,000 barrels per day, you begin to see the enormity of the situation we have in our hands,” he disclosed.

Oniwon added that, “The implication of this is many folds. Because these people carry out their activities in the most unprofessional manner, they have caused huge environmental pollution in the areas they operate. We had a major incidence in Ogoni land, which we are still coping with; but what we are seeing today due to the activities of these oil thieves, the situation may be twice the destruction of environment in Ogoniland.

“These people drill into the pipeline, take what they want and leave the destroyed pipelines to ooze into the environment. For those that engage in illegal refining, because of the crude method that they use, they just take crude oil put it in a drum and boil; whatever boils off it is what they take, which often times is less than 25 percent of the entire product. The remaining 75 percent they don’t need they dispose into the environment, causing huge environmental problems for us.”

According to the NNPC boss, giving results of research that showed that hydrocarbon waste can stay on the ground for decades, the waste from activities can last for generations before the land could be recovered for productive activities.

“A United Nations study in parts of the Niger Delta has indicated that spills from oil has penetrated upto about 30 metres below the soil; even if you want to remediate the soil, you cannot scrape 30 metres of top soil and replace it. Therefore, we are looking at what might be permanent damage to the environment due to activities of these oil thieves.

“These people are looking for quick money, but they are causing damage that may last for generations. So, we need the support of the National Assembly in tackling this menace of illegal oil bunkering in the Niger Delta region,” he noted.

Oniwon also sought the support of the lawmakers in the passage of the Petroleum Industry Bill (PIB), noting that the non-passage of the PIB has caused a lot of uncertainty in the industry.

According to him, “Investors are not ready to invest in new projects where there is a climate of uncertainty. Things have become even more desperate because presently Nigeria faces a lot of competition for investment in the oil and gas industry with our regional neighbours including Ghana, Cameroun, Sierra Leone, and Liberia, who have now discovered oil.

“The level of certainty in these other countries is higher than ours simply because the PIB has not been passed into law. If we are not careful, investment may drift to these countries away from Nigeria. Therefore, there is every need to hasten the passage of the PIB into law.”

The NNPC GMD also stressed “the need for us to have a national oil and gas company, which can favourably compete with the international oil and gas companies in the exploration, production and distribution of oil and gas products.”

Oniwon observed that should Nigeria be faced with a situation such as faced recently by Libya or Iran against Western influence, which may lead to the withdrawal of international oil and gas companies, Nigerian companies can only produce about 200,000 barrels of crude by themselves, which is not even sufficient for national consumption.

He added that only a strong, viable and independent national oil company can rise to the occasion to take over incase the national policy happens to run against the policy of the Western countries. “We hope that when the PIB comes to the National Assembly, the lawmakers would work with us to create a strong, effective and efficient national oil company that can hold its own and sustain the production of oil and gas for the benefit of the country,” he added.

In his response, the Chairman of the House Committee on Petroleum Resources (Upstream) Mr. Ajibola Muraina, promised that the Committee would organize a public hearing on the activities of illegal bunkering in the Niger Delta, towards coming up with remedial laws for the sector.

He also charged the Corporation’s management to ensure the full implementation of reports of probes and other events undertaken by the National Assembly, promising to work more cordially with the NNPC and other industry operators to ensure th sustenance of the nation’s oil and gas industry.

In this article

Join the Conversation