Published 15th Mar, 2024

By Timileyin Akinmoyeje

Despite contracting a private security firm for N48 billion per year, the Nigerian National Petroleum Company Ltd. has stated that it still cannot deal with the scale of oil theft in the country.

Mele Kyari, the Group Chief Executive Officer of the NNPCL, revealed this on Wednesday during an oversight visit by the House of Representatives special committee.

According to Kyari, Nigeria has been struggling to meet its production target because of the scale of oil theft on its pipelines across the country.

Although Kyari stated that the firm was still gathering facts and figures, he provided figures showing the extent of damage while briefing the legislators. He stated that as of December 2023, Nigeria had 4800 illegal connections along 5000 Km of pipeline in Nigeria.

“Some of the scale of the infraction that we see is unbelievable; we are not able to deal with it. When you remove one connection, the next day in the same location, someone will replace it. It is very obvious that despite all the integrity issues with our pipeline and our facilities, we have a capacity beyond 2 million barrels per day without doing anything,” said Kyari.

“But today, we are struggling to meet the budget estimate of 1.6 million barrels per day. This by no means is related to crude oil theft; no, it’s not true, but the core issue that is affecting the other core issue is crude theft.

“We have deactivated 6,409 illegal refineries in the Niger Delta region. Today, we have disconnected up to 4,846 illegal pipes connected to our pipelines, that is out of 5,543 such illegal connection points. That means there are a vast number of such connections that we have not removed.”

In August 2022, Nigeria’s crude oil theft problem was so serious that the NNPCL produced only 972,000 barrels per day. To remedy the situation, the oil firm, in conjunction with the federal government, hired Tantita Security Services to handle pipeline surveillance.

The security firm, owned by Government Ekpemupolo (Tompolo) an ex-Niger Delta militant, was contracted at a cost of N4 billion per month. Beyond this contract, which was renewed in October 2023, the NNPCL also engages national security forces to protect the pipelines.

President Bola Tinubu, during the 2024 budget presentation ceremony, said his government would work with a ‘conservative’ oil production benchmark of 1.78 million barrels per day. However, the Organisation of Oil Producing and Exporting Countries (OPEC) only gave Nigeria a quota of 1.5 million barrels per day.

Nigeria did not produce enough to meet either of these production quotas in January or February 2024, according to OPEC’s monthly oil report. On March 12, OPEC revealed that Nigeria only managed 1.47 million barrels per day in February.

In 2023 alone, Nigeria lost about N2.3 trillion to oil theft, according to the Senate. This is higher than the projected revenue from crude oil and gas sales in 2024 by about 1 trillion naira. Also, between 2021 and the first half of 2022 alone, Nigeria spent N34.47 billion to fix damaged pipelines across the country, according to the Nigeria Extractive Industries Transparency Initiative.

Share on Social Media