Oil theft: NNPC contradicts self

NNPC-Towers*Puts daily production at 2.4 Mbpd


07 August 2013, Sweetcrude, Lagos – The Management of the Nigerian National Petroleum Corporation, NNPC, on Tuesday declared that the effort by the Federal Government to stem the tide of oil theft and pipeline vandalism is yielding positive result contrary to insinuation in some section of the media that the oil and gas industry is headed for extinction as a result of crude oil theft.

This however contradicts the statement of the Group Executive Director Exploration and Production Mr. Abiye Membere at Abonema in Rivers state a few weeks ago where he told newsmen that Nigeria has been struggling to produce between 2.0 and 2.1mbpd since the beginning of the year even though there is the capacity to produce 2.5mbpd.

However, In a press release signed by NNPC’s, Tumini Green, the Corporation stated that the combined efforts by the Petroleum Minister, the NNPC and the IOCs to stem the menace have resulted in a significant drop in the level of pipeline vandalism and crude oil theft resulting in a corresponding increase in daily crude oil production.

“Suffice it to say, some vandalized pipelines and flow stations have been repaired and re-opened such that average current national daily production stands at 2.4mbpd compared to the average year to date figure of 2.13Mbopd as at June 2013,” Green sated.

The NNPC spokesperson traced the current success to the directive by the Honourable Minister to the NNPC to constitute an industry-wide committee on ‘Security Strategy against Crude Oil and Product Theft’. She informed that the committee’s members include representatives from NNPC, all IOC’s, NPDC, Security Agencies as well as the Oil Producers Trade Section (OPTS) of the Lagos Chambers of Commerce and Industry (LCCI).

“In a fortnight, repair works on the Nembe Creek Trunk Line (NCTL) which has a daily capacity of 150,000bopd is expected to be fully completed. On completion, daily average crude oil production is expected to increase to 2.50Mbopd which will exceed the national daily target of 2.48mbpd,’’ she said.

While thanking the security agencies for a wonderful work done to reduce the menace of vandalism, Green stated that the Corporation is determined to sustain this tempo.

“Our expectation is to increase production from the 2.48 to 2.55mbpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55mbpd in the country. All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target. This will increase our 2013 average production to about 2.34Mbopd if the current fight against pipeline vandalism and crude oil theft is sustained,’’ she stated.

On the claim that the divestment by some multinational oil firms operating in the Niger Delta is due to harsh operating environment and absence of leadership in the oil industry, NNPC described the argument as defective and rooted on weak syllogism.

The Corporation informed that Mergers, Acquisition and Divestments (MAD) is a global portfolio management strategy employed by mostly big Corporations to restructure and reposition companies for better and efficient revenue growth and competition, wondering why anybody could canvass such position when the multinational oil companies themselves, especially Shell, have repeatedly stated that part of the reasons for divestment of its assets was a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.

“Against this backdrop, it is misleading to relate the strategic divestments as due to the absence of leadership in the oil industry. These divestments have in fact increased indigenous participation which will in turn create new job opportunities, reduce capital flight, encourage capacity building and support gas-based industrialization aspirations,’’ Green said.

With regard to claims by Shell that it lost $700Million by the second quarter of 2013 to crude oil theft and other disruptions in Nigeria, NNPC posits that the loss claims are not localized to Nigeria as reported.

“Shell Acquisition of Shale Oil and Gas Assets in North America has also proven not to be good investments and as such programmed for divestment to minimize risk. In order to further buttress the global challenges, Shell’s current tight oil output is 50,000bopd as against an estimated 250,000bopd in the United States. Furthermore, ExxonMobil’s Q2 2013 earnings were down substantially by 57% year-on-year primarily due to prior year gains, Japanese restructuring and divestments,’’ the NNPC spokesperson explained.

The Corporation restated its determination to work with all stakeholders in the oil and gas industry to ensure effective management of the nation’s vast hydrocarbon resource base.

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