FG, oil firms in endless war against crude theft, illegal refineries

For the past few years, the nation has recorded numerous cases of oil theft and related crimes, especially illegal refining. UDEME AKPAN, who investigated the issues, reports that the government and other stakeholders do not appear to be wining the battles despite many pronouncements.

A fortnight ago, the Shell Petroleum Development Company of Nigeria Limited, SPDC shut the Trans Niger Pipeline, TNP, following an explosion and fire at a crude theft point on a section of the facility at Bodo West in Ogoniland in Rivers State.

Consequently, it suspended the production of about 150,000 barrels of oil worth $16.3 million or N2.57 billion per day because of the incident.

The Corporate Media Relations Manager of the firm, Mr. Tony Okonedo, who confirmed the development stated that prior to the incident, SPDC had shut down the 28” TNP to remove crude theft connections before deciding to finally close the 24” TNP as a precautionary response to the fire.

That was not the first time. In April, this year the firm declared force majeure on its 150,000 barrels of oil per day Bonny Light export, after shutting down the Nembe Creek Trunkline, NCTL.

These and other numerous cases have impacted very negatively on many stakeholders, especially the Federal Government that has an average of 57 per cent equity in the Joint Ventures with the International Oil Companies, IOCs.

For instance, the Nigerian National Petroleum Corporation, NNPC stated that during the April incident, daily crude oil production fluctuated between 2.1 and 2.3 million barrels per day (mbpd) compared with the projected estimate of 2.48mbpd.

The Acting General Manager in the Group Public Affairs Division, Ms. Timini Green stated that “This fall between actual production and forecast in first quarter 2013 resulted in a drop in crude oil revenue of about $1.23 billion (N191 billion) that should have accrued to the Federation Account.

The apex oil Corporation has it that the nation lost about N191 billion ($1.23 billion) in the first quarter of 2013, due to drop in crude oil production, arising from incessant crude oil theft and vandalism along the major pipelines in the Niger Delta.

However, the latest TNP shutdown may take a long time to be reopened as stakeholders are still planning to commence investigations into the incident. The spokesman of Shell confirmed that: “A joint team is due to conduct an investigation tomorrow into the cause of the June 19 explosion and fire on the 28” Trans Niger Pipeline (TNP), after SPDC shut the facility resulting in a deferment of 150,000 barrels per day.

The team, which will comprise regulators, including the Ministry of Environment, community members, SPDC and independent observers, will visit the site as part of their mission. The fire went out on Friday (21 June).

The TNP had previously been targeted by crude thieves and shut down several times to take out crude theft points. To ensure that the facility continued to meet operating standards, SPDC deployed a team to Bodo West on May 22, 2013 to remove and repair crude oil theft connections on both the 24 and 28-inch sections of the TNP.

The repair team’s presence and mandate to remove crude theft points were made known to the community which granted them access. No sectional replacement work was underway. One operations support barge, one environmental barge and two tug boats were the only authorised vessels at the Bodo West worksite. Environmental barges are typically used to store and transport recovered oil.

The Managing Director of SPDC and Country Chair, Shell Companies in Nigeria, Mutiu Sunmonu said, “Unfortunately, crude thieves continued to operate at night even as the repair team worked to remove illegal connections during the day, such that, on the day of the incident on June 19, two unauthorised Cotonou boats were reportedly present at the time of the initial explosion and fire.

The established operations routine at any repair site comprises a team of SPDC staff, contractors and regulators who only work during daylight hours and leave the site at the end of each day. This means that no SPDC authorised people could have been on the ground at the time of the incident.”

Sunmonu stated that: “Having shutdown and isolated the pipeline, but with oil continuing to flow from the pipeline under gravity to the low point on the TNP, the only other practicable option in the circumstance was to allow the fire burn out naturally. To prematurely extinguish the fire without functioning containment equipment on site could have resulted in further environmental damage.

He added that: “We continued to monitor the fire while also mobilising replacement oil spill containment and response equipment to site. With the fire out, a residual leak was observed at the site contained within the crater caused by the initial incident. We are currently mobilising crews to evacuate the pit, access the leak point prior to the joint investigation visit and complete repair.

On the reported arrest of some employees of SPDC’s contractors and subcontractors on suspicion of involvement in crude theft activities, Sunmonu said, “We appeal that the arrested suspects be treated in line with the principle of presumption of innocence until proven guilty, and hope for a speedy and transparent dispensation of justice for anyone found to have violated the laws of the land.

He stated that: “We are committed to operating transparently, which is why we have invited the National Coalition on Gas Flaring and Oil Spill in the Niger Delta (NACGOND) to join the investigating team as independent observers. We will continue to run our operations as safely as is possible and in accordance with both industry regulations and Nigerian laws.”

The firm stated in its recent report that the Niger Delta continues to be a challenging place to operate for many reasons. There is a fundamental lack of basic infrastructure in many areas, with poverty, lack of employment opportunities, widespread criminality and other factors all contributing to the social and economic crisis in the region.

It maintained that criminality has expressed itself in many forms over the years – attacks on facilities, kidnapping, militancy and, most worrisome in recent years, crude oil theft and illegal refining. The firm stated that: “In 2012, there were over 80 reported incidents of crude oil theft from the facilities of the Shell Petroleum Development Company of Nigeria Limited (SPDC), several accompanied by vandalism, spills and fire.

He firm maintained that Shell Companies in Nigeria (SCiN) are active supporters of the Voluntary Principles on Security and Human Rights (VPSHR), a set of guidelines developed in 2000 by various governments, extractive industry companies and human rights organisations. It also stated that SPDC applies these principles in the delta and engages various government agencies (including the National Human Rights Commission), Government Security Agencies (GSAs) and other organisations on how the company can contribute to better implementing VPSHR in the country.

It remarked that: “GSA personnel deployed to work in company facilities are informed of the VPSHR and the need for its application, and are also reminded regularly. International Oil Companies operating in Nigeria, including Shell, are advocating for the government to join the VPSHR plenary. It is heartening to see the success of the Federal Government’s Amnesty Programme in the Niger Delta, aimed at ex-militant groups. The enabling environment helped by the amnesty resulted in a significant increase in Nigeria’s oil and gas production and provided better access for operations and maintenance of assets. However, significant grievances remain over post-amnesty management issues, and these would need to be managed to sustain the gains in the long run.

The country chair/Managing director is said to have also stated that: “As a Nigerian, and one who has spent a great deal of my career in the Niger Delta, my greatest immediate concern is the issue of crude oil theft, which is an increasingly dangerous menace. The volume currently being stolen is the highest in the last three years, with over 60,000 barrels per day from SPDC facilities alone.

He stated that the developments constitute huge loss, and the effects of this industrial scale theft are devastating for both the people and the environment. Sunmonu also stated that: “Most of the stolen crude makes its way to the international market and a smaller percentage is refined locally, with thick smoke from illegal refineries lining the shore in many parts of the delta. The land, shorelines and water are heavily polluted with oil as a result of these activities. This is a crisis situation because the solution is beyond the capacity of any individual company. Our concern is that, if these activities continue at this rate, the effects would be devastating, not only to the social and environmental structure of many areas of the Niger Delta, but also to Nigeria’s economy.”

However, the government does not appear to have given up hope as President Goodluck Jonathan has challenged governors in oil producing states, service chiefs, and multinational companies, to come up with a strategy to tackle crude oil theft in the country.

The meeting was attended by Vice President, Namadi Sambo, Governors Godswill Akpabio of Akwa Ibom state, Emmanuel Uduaghan of Delta, Minister of State for Finance, Yerima Ngama, and Attorney General of the Federation and Minister of Justice, Mohammed Adoke, among others.

The Minister of Petroleum Resources, Diezani Alison-Madueke, said the focus of the meeting was to find ways of ending oil theft. She stated that: “We are continuing with what has been done, but we are becoming much more aggressive. We met with a number of multinationals; we have come up with various pointers which must be addressed in an in-depth manner over the next 10 days.”

Some observers who have been watching government actions doubted the potency of the latest actions to end these and other criminalities in the Niger Delta as the various issues are funded and masterminded by highly placed persons and foreign syndicates. They therefore called for very drastic measures to tackle oil theft and illegal refining in the region.

Via: http://nationalmirroronline.net/

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