Federal treasury loses $2b in 8 months
By Jeph Ajobaju, Chief Copy Editor
Federal lawmakers have discovered Nigeria lost $2 billion (N1.3 trillion) to oil theft in the first eight months of the year to August (8M 2022), an average $250 million per month.
The Senate on 14 April constituted an Ad-Hoc Committee on Oil Lifting, Theft, and the impact on Petroleum Production and Oil Revenues chaired by Akpan Bassey, who is also Petroleum (Upstream) Senate Committee Chairman.
The committee’s report adopted at plenary on Tuesday made far-reaching recommendations for stopping oil theft but failed to name a single person or corporate entity carrying out the crime.
“Nigeria lost over $2bn to oil theft between January and August 2022, with consequent loss of revenue that would support the country’s fiscal deficits and budget implementation,” it said.
The report noted efforts being made to tackle the menace by all stakeholders which have started yielding results, with Forcados Terminal producing 500,000 barrels per day (bpd) now against zero output in the first six months of the year (6M 2022).
“Bonny Terminals was also producing 87,000 barrels of oil per day now as against zero production a couple of months ago due to activities of economic saboteurs.”
Part of the 16 recommendation the Senate adopted said “the Nigerian National Petroleum Company Limited [NNPCL] should stop undermining Nigerian Upstream Petroleum Regulatory Commission [NUPRC] and Nigerian Midstream and Downstream Petroleum Regulatory Authority [NMDPRA] from performing their functions.
“The provisions of the Petroleum Industry Act should be adhered to by NNPCL as regards functions of the established agencies.”
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Other recommendations in the report
The report also said:
Agencies at oil terminals should be streamlined in line with their upstream and midstream/downstream statutory functions delineated in the PIA, according to reporting by The PUNCH.
The NUPRC should fast-track the upgrade of the National Production Monitoring Systems to enable real-time monitoring of flow station and terminal activities.
The NUPRC should expedite deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal movement of vessels to ensure revenue generation and optimal crude oil production.
The Bureau of Public Procurement (BPE) should expedite all processes of procurement for the NUPRC to ensure immediate deployment of an online real-time monitoring system by the NUPRC across all upstream oil and gas production platforms for accuracy in measuring production volume by producers.
The NUPRC should resume full regulatory oversight of all crude oil terminals, including integrated ones, crude oil pipelines, issuance of loading clearance, and processing of export permits in line with Section 8(d) of the PIA; as regulatory activities at crude oil terminals are interdependent and contingent.
It criticised interference of Petroleum Minister of State [Timipre Sylva] in the operations of the NUPRC as shown in letters the NUPRC provided to the committee, and insisted both Sylva and the NNPCL should allow the PIA to function.
“The PIA as signed into law by the President must be allowed to function by all stakeholders in the sector as an amendment [in] it now will send wrong signals to the international community.”