A Review of the Nigerian Energy Industry

Oil Theft: How FG ignored recommendations on pipeline surveillance

Diezani-Alison-Madueke25 November 2013, Lagos – There are strong indications that the current spate of pipeline vandalism and crude oil theft was fueled by the refusal by the federal government and Nigerian National Petroleum Corporation (NNPC) to implement expert recommendations on pipeline surveillance and security, THISDAY has learnt.

THISDAY gathered from sources within the NNPC that both the oilfield services giant, Schlumberger and the Nuhu Ribadu-led committee had in 2010 and 2012, respectively, made far-reaching recommendations to the Ministry of Petroleum Resources and NNPC on the protection and surveillance of pipelines in Nigeria as well as the adoption of metering at oil well heads, flow stations and export terminals.

It was however learnt that three years after Schlumberger made its presentations on a proposed pipeline surveillance system and exactly one year after the Ribadu committee submitted its report, the NNPC was yet to act on these recommendations.

This development, it was learnt, has fueled speculations that the federal government is unserious in its campaign against pipeline vandalism and crude oil theft.

Investigations revealed that Schlumberger had in 2010 hosted a delegation from the NNPC, Police, Nigerian Army, Navy and the Air Force on an important phase of their investigation of the various solutions for the protection of pipelines in the country.

In a 12-page document obtained from the NNPC by THISDAY, Schlumberger had “suggested a two-phase approach to demonstrate competence and capability of the surveillance system, with an initial visit in Southampton, United Kingdom, with the second live viewing in Nigeria of an existing qualification test application with Shell Petroleum Development Company (SPDC) in the Afam oil field.”

The phase one approach incorporates technical presentations and technology demonstrations on robust pipeline surveillance and response solution.

Schlumberger had suggested that long-range infrared close circuit television (CCTV) installation for parameter monitoring would provide additional surveillance on the pipelines.
“Once an intruder is detected by the fibre optic based Integriti System, the CCTV would be used to verify and validate the type of intrusion. This CCTV service would significantly reduce response time and potentially eliminate the need in certain circumstances to dispatch personnel to the site for a Level-1 reconnoiter and response to the intrusion detected,” said Schlumberger in its report submitted to NNPC.

Under the second phase of the programme, Schlumberger was to install an Integriti pipeline monitoring system at Shell’s Okoloma Gas Plant in the Afam field in Rivers State to detect leaks and activity in close proximity to the pipeline, with a Command and Response Centre set up in Schlumberger’s visualisation centre in Port Harcourt.

The Command and Response Centre, it was learnt, would identify threats; detect leaks and intrusions, as well as determine the risk level and provide Level-1 response.
THISDAY gathered that NNPC ignored this recommendation despite the support given by the NNPC team, which met with Schlumberger, police, army, navy and air force.

With NNPC throwing away the recommendations made in 2010, Schlumberger in 2012 submitted a fresh proposal on Pipeline Surveillance and Security Services for Nigerian Pipeline Network to the Ribadu committee.

Titled, “Opportunity Brief for the Petroleum Revenue Task Force: Distributed Vibration Sensing Systems”, the new proposal observed that sustained vandalism and crude oil theft had adversely affected the efficiency and reliability of NNPC’s pipeline network in the country.

In the report to the Ribadu committee, the oil service provider said the pipeline surveillance and security group of companies, comprising a consortium of Tricontinental Oil Services Limited, Group 4 Securities Limited (G4S), Schlumberger Nigeria Limited and Schlumberger Overseas Limited, offered to provide pipeline security services to NNPC, comprising automated surveillance/monitoring and metering with a fully functional control centre.

Yet this was ignored by the federal government and the Ribadu report denigrated by government functionaries that did not want to see its recommendations implemented.
In its report, the Ribadu committee had noted that the country loses about 250,000 barrels per day of crude oil to theft and recommended the full automation of Nigeria’s petroleum industry, with a new metering and measuring regimes.

The committee also recommended robust pipeline surveillance and fingerprinting of Nigerian oil to enable tracking.

According to the committee, fingerprinting can be used to ascribe the status of “legal oil” to oil that has been obtained and sold legally by the federal government and the operators.

The Ribadu committee also recommended “a deliberate policy that results in the ban from the Nigerian market of corporations and individuals that have either been found culpable of receiving stolen oil from revenue theft in the Nigerian petroleum industry or insufficiency in providing information of its participation (legal or otherwise) in petroleum sector transactions.”

However, the federal government NNPC has ignored all these recommendations, fueling concerns that they are paying lip service to the campaign against crude oil theft.
In a related incident, the Joint Task Force in the Niger Delta, Operation Pulo Shielf, has announced that it dismantled a militant camp in Bakassi Local Government Area of Cross River.

The force said yesterday that it also destroyed 59 illegal refineries, seized 4 vessels, and arrested 7 suspects.

•A statement from the JTF’s Media Coordinator, Onyema Nwachukwu, said several arms were recovered from the camp.

•“During the clamp down, the troops recovered 24 x 7.62mm round cartons, five Browning machine gun ammunition, three x 7.62mm round special, and seven live cartridges. Other items recovered from the camp include four machine gun belts and one passport fibre boat belonging to Inland Water Ways Agency,” the JTF stated in the statement made available to online news medium Premium Times.

According to Nwachukwu, the camp, known in local parlance as “Efut Esighi” militant camp, served as an operational base for pirates and militants.

The task force also said its operatives destroyed three illegal crude oil distillation camps concealed in a forest at Agbede Village and Egwua 2 general area of Etsako West and Warri South West Local Government Areas of Edo and Delta States respectively.

•The task force listed items used by the oil pirates to include seven steel surface tanks, seven locally-fabricated ovens used for heating stolen crude oil, 235 metal drums, and four dug-out pits containing stolen crude oil. All the items were destroyed during the operation.

•In a similar operation carried out in Bayelsa and Rivers sectors of JTF, troops shut down 56 illegal crude oil distillation camps, the spokesperson said.

•The troops destroyed 16 Cotonou boats, 22 pumping machines, one power generator, 25 zinc plates used for fabricating local crude oil distiller, one welding machine, and 32 sawed pipes used by oil thieves.

•The troops also impounded four metal barges and a speedboat caught engaging in illegal oil bunkering activities in the operation, which took place from November 11 to 22.
– Ejiofor Alike, This Day

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