A Review of the Nigerian Energy Industry

CRUDE OIL THEFT: The conspiracy that robs Nigeria of billions of dollars (2)

Drums used for oil theft …How barons, military personnel, govt officials, IOCs bleed the nation
01 September 2013, Warri/Yenagoa/Port Harcourt – This is the concluding part of the investigative story on how members of a powerful cabal continue to conspire, robbing in the process, Nigerians of billions of dollars. It is very revealing but also represents a narrative on how mis-governance inspired by greed makes a mockery of the nation.

Production projections
The Nigerian National Petroleum Corporation, NNPC, said after repair works on the Nembe Creek Trunk Line, which has a daily capacity of 150,000 bpd, “daily average crude oil production is expected to increase to 2.50 m/bpd which will exceed the national daily target of 2.48 m/bpd.”

It added, “Our expectation is to increase production from the 2.48 to 2.55 m/bpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55 m/bpd 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 2.34 m/bpd if the current fight against pipeline vandalism and crude oil theft is sustained.”

But who is winning the war?
Tackling pipeline vandalism is really the important aspect, but the truth is that there is nothing on ground now to show that the country is winning the war against oil thieves, especially the cartel. Except for the exploits of soldiers of the Joint Taskforce, JTF, who are doing their best in the difficult terrain, where they battle regularly with armed vandals, the oil pipelines are still at the mercy of thieves and their big-time sponsors.

Speaking on whether the nation was winning the battle against oil theft, Kuku, the PAP boss, said though the Federal Government had made tremendous progress, it still needed the cooperation of the international community to win the war.

His words: “I want to say that the Federal Government has taken very great steps in dealing with the issues of oil theft. It’s not going to be won in a single day. It is a very specialised and mechanised crime issue. It’s not a crime committed ordinarily by poor people; it’s a crime committed by an organised people, but it is a matter of demand and supply. It’s an international crime and government is taking steps, like I said, even to the U.K, to South Africa and the U.S., and has urged them to participate in dealing with it as an international crime.” He explained that without international buyers, there would be no local suppliers and this would consequently lead to a decline in oil theft because the business will no longer be lucrative.

Bayelsa as theatre of war
In Bayelsa State, which is a theater of war between oil thieves and soldiers, the level of oil theft is alarming and of grave concern to stakeholders – mind you, that is the state of President Goodluck Jonathan and the Petroleum Resources Minister, Deziani Allison-Madueke.

Investigations showed that in spite of the clamp down on illegal refineries in the vast mangrove swamp of the state by special security forces, codenamed Operation Pulo Shield, the perpetrators of the illicit trade are not relenting. The situation on ground in the creeks of the state is very different from the respite many had anticipated when the Federal Government granted amnesty to Niger Delta militants, who were outraged against the Nigerian state over what they described as the glaring marginalisation of the region and environmental injustice.

At the peak of the campaign that almost crippled crude oil production, the Federal Government was forced to extend olive branch to the creek ‘Generals’ with a view to creating unfettered flow of crude oil. The creek ‘Generals’ were also awarded juicy surveillance contracts to secure crude oil pipelines. One of the ex-militant leaders, Ebikabowei Victor Ben, alias Boyloaf, said to be in-charge of the Bayelsa axis, could not be reached for comments on the situation of things in his area.

However, during a trip to Southern Ijaw area, which is the den of oil thieves in Bayelsa, it was discovered that the JTF had destroyed thousands of illegal refineries and impounded hundreds of vessels and equipment used in siphoning crude from oil facilities that crisscross the region. The Brass-Akassa corridor on the Atlantic fringe of the state is regarded as the black spot for illegal bunkering in the central Delta. Alarmingly though, the ease with which more camps spring up and the manner oil thieves tap into the pipelines in the deep mangrove swamp to get raw crude for their illicit business, has left many puzzled.

Surprisingly, the natives, who, at a time, were outraged against the oil majors over alleged environmental injustice and neglect, are the ones now decimating their already fragile ecosystem with impunity.

Both the young and old are involved in this business. Without the active connivance of the natives, a source said, the oil barons would not have gotten easy access to the communities.

Sadly, even children have abandoned school to join their parents in refining stolen crude, oblivious of the danger to their health and future.

A source said there was an abandoned oil well on the Brass Island on the Atlantic fringe, where barges illegally load crude oil and transfer to a mother vessel waiting on the high sea. Ironically, the very river most of these communities depend on for drinking water is what the illegal refinery operators pollute. Some of them were seen pumping the excess of their consignment into the river in broad daylight.

Only about 30 per cent of the refined oil, according to experts, is recovered, while the remaining 70 per cent is discarded into the environment.

“This, to a large extent, is responsible for the repulsive stench on the river and thick smoke in the air reducing visibility in the snaky creek and exposing boat drivers to the danger of collision,” a community leader asserted.

“The fact that electricity supply from the national grid to the communities is not reliable has made diesel and petrol-powered generators the main form of power supply across the Delta.

“It has also made illegal refining a lucrative business for the unemployed youths, who are not aware of the long term effect on the environment and the health of their people”.

Field day in Rivers
In Rivers State, where the leader of the Niger-Delta People Volunteer Force, NDPVF, Alhaji Mujahid Dokubo-Asari, Ateke Tom, Farah Dagogoh and Ebripapa are in charge, oil thieves are also having a field day.

We joined the JTF on a ground trotting exercise, weeks ago, on the waterways of the state. The impact of oil spill from oil theft was mind-boggling.

There were traces of crude on the river, in spite of the efforts to fix some of the points ruptured by oil thieves on the Nembe Truck Line, between San Barth Manifold and Krakrama on the waterways. About seven boats conveying soldiers, journalists, Shell staff, surveillance contractors and the technical team went for the verification exercise.

Spokesperson of Shell, Mr. Joseph Obari, explained that his firm had to engage some locals as surveillance contractors to alert on ruptured points on its pipelines. The company would later send its maintenance team to work on the points.

Journalists, soldiers escape death
Just when the team was minutes close to the Krakrama manifold, which was the last point to verify the work done by the maintenance team of Shell, the boat conveying some journalists and soldiers suddenly capsized. They were rescued.

In a chat later, Commanding Officer, 130 Battalion, Lt Col Banshe, told the journalists on the team that security agencies would not relent in their war against illegal bunkering in the state.

He said those into this illicit trade were in the creeks, stressing that security agencies had started smoking them out. He pointed at a flyboat on the jetty in Abonnema seized by his men during a patrol.

The Commanding Officer said the repair works carried out by Shell on the ruptured pipeline would boost their patrol of the waterways.

No retreat, no surrender in Delta
In Delta State, it was gathered that OFSL, chaired by Tompolo, gave oil thieves the battle of their lives for the one year the contract to the company to police oil pipelines in the state lasted.

Tompolo is supported by the chair of Delta Waterways Security Committee and Itsekiri youth leader, Chief Ayiri Emami; a former chair of Warri North Local Government Area, Mr. Michael Diden, Chief Dennis Otuaro, and Barrister P.K. Seimode, both members of DWSC; who are all board members of the company.

However, since February 2012 when the contract to the company expired, the NNPC has not renewed it, leaving the monitoring of oil pipelines in the state strictly in the hands of JTF and navy. Oil thieves are said to be very much in the business despite the forays made by security agents.

A concerned stakeholder, however, disclosed, “Security agents have illegal oil refinery operators working for them. They are in the business together. I am aware that even some Cotonou boats and boats seized from oil thieves by OFSL operatives were handed over to their owners by some unscrupulous security officials.

“The biggest problem in Nigeria is not using a metering process to monitor what is produced like it is done in other oil-producing countries. The oil stolen by illegal oil refiners is nothing compared to what is stolen by the cartel of government officials, security agents and oil companies.

“If crude thieves operating illegal oil refineries steal crude oil filled in a Cotonou boat for instance, it will take them three to four months to refine it and, after production, they will start selling it. Now, what is what they are stealing compared to the eight vessels that get missing out of the 10 that is loaded in the terminal?”

‘JTF on top of situation’
Media Coordinator of JTF in the Niger Delta, Lt. Col. Onyeama Nwachukwu, was, however, categorical that the security outfit was winning the war against oil thieves. He said over 608 suspected oil thieves were seized in 594 raids carried out between January and June.According to him, oil theft was on the decline in the region. His words, “So far, we have carried out 594 illegal oil bunkering patrols, and several arrests have been made. In the two quarters we are talking about, we have scuttled about 748 illegal refineries within the region and we have impounded 24 sea-going vessels; we equally arrested 133 barges involved in oil theft. And 861 giant open wooden boats, popularly referred to as Cotonou boats, have been scuttled over this period.

“About 910 large surface tanks, which oil thieves engaged in illegal refineries used to reserve the crude have been scuttled. We have taken into custody about 608 suspects who are involved in oil theft and oil theft related cases.”

On the rate of oil theft, which reportedly led to a combined shut-in of 190,000 barrels per day production in Bayelsa, Nwachukwu said that the JTF was making a positive impact.The spokesman said: “Of course, we stepped up our operational activities and I can assure you that oil theft now is going down”.

A hoax
While many people agree that JTF has performed, the general allegation is that oil companies are raising the alarm to defraud Nigerians.

Coordinator of the Ijaw People Development Initiative, Ozobo, stated, “Oil companies are not sincere about their reports on the actual degree of loss of the country’s oil revenue. They are over- blowing the whole situation to make more profits and pay lesser tax and returns to the Federal Government.

“It is also true that the oil companies are running illegal oil wells and under-estimating the number of barrels produced per-day, which the government does not know about. This is sad and barbaric.

“The attitude of the oil companies is worse than the known oil thieves we are shouting about. Only a few of the oil wells and oil barrels produced per day by the oil companies are reported. I tell you, there are many oil wells and barrels produced that are not known by the Federal Government.”

Way out
Noticeably panicky, the Federal Government recently beseeched the international community not to buy stolen crude from the country. But ex-militant leader, Tompolo, who spoke through the Secretary of Tompolo Foundation, Mr. Paul Bebenimibo, said, “That is not the solution. Government can effectively check illegal crude oil activities by renewing the surveillance oil facilities contracts in Delta, Bayelsa and Rivers States, as well as expanding the job to other oil bearing states. Performance could be measured by regular meetings with stakeholders and the Department of Petroleum Resources, DPR, must wake up and live up to expectation.”

IPDI coordinator, Ozobo suggested, “The Federal Government should launch a probe into the internally computed fraudulent reports of the oil multinational companies to ascertain actual loss of oil revenue in the country.”

He added that government should also investigate daily activities of oil companies and number of oil wells under their operations because they are always armed with misleading audited reports.

“Clearly, we have to develop a modern technology to always check the activities of the oil companies”, he said

Many people think the task of policing the pipelines should not be a matter for the security forces alone, since they do not have the workforce to place men at every kilometer.

They advised the oil majors to improve on their surveillance technology so that any breach on their facility would trigger an alarm to deter vandals and alert the security forces.

Some people contended that the crusade against crude oil theft and illegal refining cannot be achieved by the use of brute force, and stressed the need for government to address the obvious contradiction of people in the oil producing communities lacking in the midst of plenty. Community leaders said the people should be carried along in the campaign to stamp out the menace, while some youths groups counseled that dialogue should not be a one-sided affair of placating the ex- militant leaders by way of pipeline surveillance job.

Some activists, who spoke, said government should legalize illegal refineries, adding that they should be made to pay tax to government at the end of the day.

“We should be allowed to use our God-given wealth which is oil and our God-given talent, which is ability to refine crude for the benefit of our country. We should be made to pay tax at the end of the day”, one of the former agitators stated.

A top security source who also spoke anonymously said government should set up a special court to try those arrested for crude oil theft. He said conventional courts were slowing the effort of security operatives in the region.

The security source said lawyers file motions of different sorts at conventional courts to secure freedom for those arrested for oil theft.

Emma Amaize, Sam Oyadongha and Jimitota Onoyume, Vanguard

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