According to an ad hoc committee established by the Senate to investigate oil theft and the resulting economic damage, Nigeria lost $2 billion, or N1.3 trillion, to oil theft between January and August of this year.
On April 14, 2022, the Senate established a 13-member Ad hoc Committee on Oil Lifting, Theft, and the Impact on Petroleum Production and Oil Revenues, chaired by Senator Akpan Bassey, who also chairs the Senate Committee on Petroleum ( Upstream).
The committee’s report, which was adopted by the Senate in plenary on Tuesday, made broad recommendations for stemming the tide but failed to name a single person or corporate entity responsible for the oil theft.
According to one of its findings, “Nigeria lost over $2 billion to oil theft between January and August 2022, resulting in a loss of revenue that would have supported the country’s fiscal deficits and budget implementation.”
According to the report, all stakeholders are working together to combat crime, and the results are showing, with Forcados Terminal producing 500,000 barrels per day now, up from zero in the first six months of the year.
“Bonny Terminals was also producing 87,000 barrels of oil per day now, as opposed to zero production a couple of months ago due to the activities of economic saboteurs,” according to the report.
Parts of the committee’s 16-point recommendations, as adopted by the Senate, stated that “the Nigerian National Petroleum Company Limited should cease undermining the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s ability to perform their functions.”
“In terms of the functions of the established agencies, NNPCL should follow the provisions of the Petroleum Industry Act.”
The report advocated for the immediate streamlining of agencies present at terminals in accordance with their PIA-defined upstream and midstream/downstream statutory functions.
It recommended that the NUPRC expedite the upgrade of the National Production Monitoring Systems to allow for real-time monitoring of flow station and terminal activities.
According to the NUPRC, the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal vessel movement should be expedited to ensure adequate revenue generation and optimal crude oil production.
The Bureau of Public Procurement should expedite all procurement processes for NUPRC to ensure the commission’s immediate deployment of an online real-time monitoring system across all upstream oil and gas production platforms for accuracy in measuring production volume by producers, according to the report.
It also stated that the NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria, including integrated terminals, crude oil pipelines, loading clearance, and export permit processing in accordance with section 8(d) of the PIA, because regulatory activities at crude oil terminals are interdependent and contingent.
The report also condemned the Minister of State’s undue interference in NUPRC operations, as evidenced by letters made available to it by the agency, and emphasized that both the minister and NNPCL should allow PIA to operate.
According to the report, “the PIA, as signed into law by the President, must be allowed to function by all stakeholders in the sector, as amending it now will send the wrong signals to the international community.”