A Review of the Nigerian Energy Industry

Massive oil theft inexcusable – Oshiomhole

oshiomhole14 July 2013, Lagos – Edo State Governor Adams Oshiomhole has said the Federal Government stands the risk of losing its integrity before the public if it fails to deal decisively with the massive theft of crude oil in the Niger Delta that now threatens the nation’s economy.

Oshiomhole decried a situation where the security agencies have seemed incapable of containing the ugly development. He said he told Vice President Namadi Sambo and Finance Minister, Dr. Ngozi Okonjo-Iweala, at the last Federation Account Allocation Committee meeting in Abuja that the current situation was simply unacceptable.

The governor said the Federal Government had stated last December that the nation had about $10 billion in the Excess Crude Account, only to be informed it had been drawn down to less than $5 billion at the last meeting of the National Economic Council.

Oshiomhole said: “When I sought for explanation, we were told the account was drawn down to augment the budget. Since the federal budget benchmark for crude is 79 dollar per barrel and oil has not sold below $100 this year, I could not understand that kind of arithmetic and then we were told it’s because we are losing about 400,000 barrels of crude per day to thieves. Now, these criminal elements, do they come with buckets or how come we are unable to apprehend them with all our security agencies?”

The governor said what he considered baffling was that at the height of militancy in the Niger Delta, before the declaration of the amnesty programme, which helped to bring down criminality, the nation never witnessed this kind of situation

“No nation should live with this kind of situation, that we would surrender our national assets to thieves? I hope those of us who call ourselves leaders in this nation will find solution to this problem before we lose integrity in the eyes of the public because I find the situation quite baffling that our Navy would simply be lamenting this sort of monumental criminality that is defying solution,” he said.

The heightened attacks on pipelines coincided with the ongoing negotiation between the federal government team and some of the ex-militants for the renewal of the pipeline surveillance contracts amidst pressure from other militants to be accommodated in the deal.

The cost of the expired pipeline contract is put at N5.6 billion. It was awarded by the government to the ex-militants to check oil theft in the once volatile region.

A report by Wall Street Journal last year said Mujaheed Asari-Dokubo got $9 million yearly to pay his 4,000 former foot soldiers to protect the pipelines, while Ebikabowei “Boyloaf” Victor Ben and Ateke Tom got $3.8 million a year apiece to have their men guard the pipelines.

Another ex-militant leader-Government ‘Tompolo’ Ekpmupolo had a $22.9 million a year contract to do the same job.
According to sources, the NNPC evaluation of the performance of the ex-militant leaders showed a poor rating with Tompolo rated highest as “using the contract as directed to protect the pipelines in the Delta.”

Oil production at the peak of militants’ activities in the Niger Delta was at 1.3 million barrels per day while output increased progressively up to 2.7 million barrels per day after the amnesty programme and the award of pipelines surveillance contracts.

Since the beginning of this year, oil theft and pipeline vandalism have risen with Shell Petroleum Development Company, SPDC, recently shutting down the Imo River trunk line in its eastern operation and reducing production by 25,000 barrels daily.

Several crude theft points were found on the facility.

Oshiomhole also spoke on the Sovereign Wealth Fund and frantic preparations for the 2015 election in some quarters.
On SWF, which funding modality the governors and Federal Government have sharply disagreed over, Oshiomhole queried the method adopted by the federal government.

“We all know it is good to save but there are questions as to when do we save, what do we save for, where do we save and how do we save? These are some of the questions they are refusing to answer because it’s simplistic to say there is only one way to save.”

Arguing further, the governor said: “My position has always been that we should reason together but the federal government does not want a debate, they just want some so-called experts to come and lecture us. Now, let us look at it this way: If as a family man living in a rented apartment, you come up with N100 million. Some may say the best way to save that money is to put it in a bank but others may argue, ‘why don’t we use it to build a property, which would generate more income and attract better value in future?

“Looking at it that way within the context of a country, does it not make sense to use such money to fix our infrastructure, build and equip standard hospitals, good schools and so on? For me, those are better investments in the future than keeping the money in a bank when you are not even sure of the value it would attract tomorrow.

“In any case, what is the sense of saving N100 million at home and borrowing N110 million abroad? We cannot continue to deceive our people. So my challenge has always been that these so-called experts of ours should come to the threshing floor so we can debate these issues with some common sense.”

The governor also spoke about the 2015 general elections and what he described as the increasing desperation of some principal actors, arguing that it bodes ill for the country.

– Olusegun Adeniyi, This Day

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