The Federal Government appears not to take lightly widely held views among operators in the country’s upstream oil and gas industry that the bulk of the crude oil they produce are being lost to organised crude oil theft.
Consequently, industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Tuesday announced the constitution of a team of experts to conduct an audit of the activities of the operators in the last two years, to ascertain the actual volume of crude oil either stolen by vandals, or lost through the activities of saboteurs.
The constitution of the audit team appears to confirm reports that the Federal Government does not seem to be in agreement with recent allegations by some industry operators on the huge volume of crude oil being stolen on a daily basis from their operations.
Indications are that government considers very alarming figures often quoted by the oil companies as losses through crude oil theft.
The consensus in government circles is that the figures are orchestrated as part of a campaign of calumny to discredit the government about its inability to secure the industry that id considered the goose that lays the golden egg for the country’s economy.
The Chief Executive Officer of NUPRC, Gbenga Komolafe, said in a statement he signed personally on Tuesday in Abuja that the panel was expected to carry out a forensic investigation of the claims and counter-claims by the operators, to get to the root of the problem.
Komolafe said the audit would cover the technical and commercial operations of all the oil companies in the Niger Delta region involved in drilling and selling of the country’s crude oil.
The audit would be conducted against recent reports by some prominent Nigerians, who are also operators in the industry, alleging massive havoc to the country’s oil production capacity and revenue as a result of crude oil theft.
A co-founder and former Chief Executive Officer of Seplat Energy Plc, Austin Avuru on Monday on the government to declare a state of emergency in the industry following revelations that about 80 percent of the country’s total oil output were being stolen.
On Saturday, the Chairman of UBA and Heirs Holdings, Tony Elumelu, also lamented over the menace of crude oil theft, alleging that about 95 percent of crude oil produced in the Niger Delta region does not get to the terminal for export.
Elumelu, who is also the chairman of the Board of Transnational Corporation (Transcorp), operator of Trans-Niger Oil & Gas Limited (TNOG), blamed the inabiliy of Nigeria to meet its Organisation of Petroleum Exporting Countries (OPEC) quota on crude oil theft.
Komolafe said in his statement that the Commission was not unaware of the tragedy of oil theft in the industry, describing it as a plague that must be stopped by al means.
He said the deplorable situation last year triggered an industry-wide initiative aimed at curbing crude oil theft and increasing the country’s crude oil production capacity.
Presidency sources said President Muhammadu Buhari was so worried over reports that the bulk of the country’s crude oil were being stolen by criminals and other unscrupulous elements within the industry.
The President had directed that all necessary mechanisms should be activated by the agencies concerned to curb oil theft, in particular and immediately end other forms of economic sabotage in the oil and gas industry.
The Presidency sources who requested that his identity should not be revealed due to the sensitivity of the matter said at the end of the audit, if the figures and volumes of losses from crude oil theft are found to be exaggerated by the companies, the President would be interested in knowing what the motivations are for those behind the campaign of calumny.
Komolafe said in compliance with Presidential directive to embark on the audit, the Commission immediately swung into action, with the aim of finding enduring solutions to the national malaise.
“The Commission considers as worrisome, the crude oil loss figures recently) quoted in the media by some operators, given actions taken so far on the issue.
“To ascertain the veracity of these claims, the Commission has activated all the necessary mechanisms to get to the root of the matter and establish the actual volume of crude stolen as against the volumes claimed,” he said.
“While stepping up efforts to deal with the issue of crude oil theft in collaboration with the military and other relevant agencies, the Commission has mandated the newly constituted panel to investigate the claims regarding the volume of theft from the various oils fields and establish the actual operational capacities of the operators; find out if the volumes being touted are actual, and if so, what additional measures need to be put in place to effectively address the issue,” Komolafe said.
To exhaustively review and discuss the implications of the matter on the economic wellbeing of the country, the NUPRC boss disclosed that a stakeholders’ meeting has been scheduled to hold in the near future to provide the forum to jointly analyse and address the situation.
Meanwhile, to create the legal basis to order the audit under the provisions of the newly enacted Petroleum Industry Act (PIA), Komolafe said the management of the Commission met on Monday to activate its technical and commercial mandate to demand
from the operators their comprehensive statements of financial and reservoir accounts of productive oil wells for the last two years.
The CEO said the audit would entail both sales and reservoir appraisal to establish the correlations between their technical and commercial activities, in addition to the monitoring and
evaluation records available to regulatory agencies.
To provide an aerial overview of the areas the crude oil theft are said to be most prevalent, the Presidency source said the Army
Chief of Staff, along with the Group Managing Director of the NNPC, Mele Kyari, and key officials of the NUPRC as well as representatives of the security agencies are expected to carry out a flyover the operating areas by the companies in the Niger Delta on Wednesday.
The trip scheduled to commence with Port Harcourt would extend to other areas across the Niger Delta to ascertain the extent of the area covered by the perpetrators of the crude oil theft.