A Review of the Nigerian Energy Industry

Nigeria to spend N15 bn annually to secure oil facilities

22 September 2013 – The Federal Government on Thursday said securing oil pipelines in the Niger Delta would gulp about N15 billion annually.

The Bayelsa State Deputy Governor, John Jonah, who spoke with reporters in Abuja at the end of the 52nd National Economic Council (NEC) meeting presided over by the Vice President, Namadi Sambo, said the funding would be through a tripartite arrangement involving the federal and state governments along with International Oil companies (IOCs) operating in the country.

Mr. Jonah, who was flanked by Anambra governor, Peter Obi, and his Gombe State counterpart, Ibrahim Dankwambo, said that following the presentation of the report of the Governor Emmanuel Uduaghan committee on the criminal incidence of crude oil theft in the Niger Delta region, the NEC approved the release of funds to take care of logistics for security agencies.

He noted that oil production significantly improved in recent times following efforts by members of the military joint task force deployed to the region to protect the nation’s oil installations, adding that oil production increased steadily, with the country’s production capacity now stabilized at about 2.4million barrels per day, as against about 1.7 million barrels few months back.

“The security agencies are well trained Nigerian professionals, some of whom are laying their lives for you and I that we should get revenue,” he said, adding that most of the oil were spilled into the ocean when the pipelines were vandalized, while the activities of vandals disrupt oil production activities.

“Most of the oil is not stolen. When you vandalize the lines they cannot produce. When the lines are broken, if one tries to pump, one would pump into the sea, and the oil companies will not produce under that condition,” the deputy governor noted.

“But, the oil is not lost, as it returns to the ground. That is called deferred oil. It is not stolen, but you cannot be produced. Once you cannot produce you cannot sell it. A lot of repairs have been carried out, and we are making sure that the levels we are was sustained. That is why the facilities that were needed have been approved. We are going spend about N15 billion over the year and that is what we lose in just few days,” he said

Mr. Jonah also noted that the government had a responsibility to equip security agencies operating in the area to enable them discharge their assignments effectively.

“So, what we are trying to do is to ensure that we buy the necessary equipment for them to perform their duty in the areas that we have identified gaps. We also want to make sure that more personnel are available. The terrain is a very difficult one, swamp terrain is a very difficult one

“In one of the lines between Nembe and Brass, we are told that there are about 150 bunkering points and those have been vandalized by crude oil thieves, and we are in the process of repairing those ones,” he said.

The Bayelsa official said there was need to ensure the security officials were properly equipped to check oil theft.

“It is the process of equipping him and giving him additional incentives to work that this money was being voted for. It is not just soldiers, navy, air force, there are policemen, civil defence and even the EFCC,” he said.

Mr. Jonah also said the government was determined to prosecute offenders, adding that “they must be prosecuted, so that there was a social procedure set in place by this committee to make sure offenders are tried”.

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