Offshore security threats weighing on Nigeria’s oil industry

Boasting huge hydrocarbons resources yet to be exploited, Nigerian offshore domain is fraught with increasing threats, casting a shadow on players’ operations and the country’s potential to attract investment into its vital oil and gas industry.

Nigeria’s offshore domain is one of the most fertile hydrocarbon provinces in the world. Current oil reserve in the country estimated at 35 billion barrels and over 187 trillion cubic feet of natural gas reserves.

The threats to offshore assets in the country include piracy, sea robbery, oil theft, illegal bunkering, smuggling, proliferation of small arms, among others.

Since pirates attack drilling rigs, some major international oil companies operating in the country have suspended their activities and many have moved deeper offshore, where the risks are very minimal.

Major offshore oil and gas assets in the country include Agbami with daily production of 250,000 barrels per day (bpd), Bonga (200,000 bpd), Usan (180,000bpd), and the 125,000bpd Amenam/Kpono field.

According to the International Maritime Bureau (IMB), Nigeria topped the list of countries in the Gulf of Guinea where piracy and sea robbery held sway in 2013.

It noted that Nigerian pirates moved further afield last year and ventured far into waters off Gabon, Ivory Coast and Togo, where they were linked with at least five of the region’s seven reported vessel hijackings. In its annual report, IMB revealed that Nigerian pirates and sea robbers accounted for 31 of the region’s 51 attacks, taking 49 people hostage and kidnapping 36, more than in any year since 2008”.

 Industry experts, who converged on Lagos last week for the Offshore Security in Oil & Gas Summit, organised by Indian-based Nispana Innovative Platforms, highlighted the urgent need to put in place a comprehensive policy and strategy and take concerted action to protect the abundant offshore assets in the country.

Offshore security in oil and gas has since the 9/11 terror attacks in the USA become a major political-economic concern for many governments in the contemporary world, especially in the oil-rich Gulf of Guinea, said Okechukwu Ogbonna, international criminologist consultant, Kofi Anan International, Peace Keeping Centre.

According to the experts, lack of a critical infrastructure protection policy and strategy, limited maritime domain awareness, inadequate Naval presence, poor cooperation and coordination among maritime agencies, poor fleet support facilities and poor funding are major factors militating against the protection of offshore assets in the country.

James Dele Oladimeji, rear admiral, Nigerian Navy, who noted that the Nigerian Navy had for many years been able to cope adequately with the responsibility of protecting the nation’s offshore resources, said the nation has suffered huge economic losses in the maritime domain due to insecurity and various vices in recent years.

This, he said, is due to the changing security landscape that has emerged since the end of the Cold War coupled with increased economic activities in the maritime domain and other domestic problems.

In 2004, Nigeria lost about $105 million due to oil theft alone, said Oladimeji, adding that in 2009, oil production in the country dropped by 20 percent as a result of piracy, sea robbery and other attacks.

“If this vice is not checked by adequate naval presence and other solutions in the maritime domain, it could undermine the national security in the near feature,” he said, stressing the need for a comprehensive policy and strategy to protect offshore assets, jointness of the maritime agencies and increased funding.

Ifeyinwa Anazonwu-Akerele, director general of Nigerian Chamber of Shipping, who noted that the Gulf of Guinea, which includes waters off Nigeria, has been tagged ‘the most dangerous in Africa for merchant’ due to piratical activities, said insurance premium to such troubled areas have increased astronomically.

“In some instances, goods meant for the Nigerian ports have had to be diverted to Benin republic or even Togo just as the insurance premium paid on Nigerian bound ship has gone up,” Anazonwu-Akerele said.

She continued: “We need a full-fledged commitment to raising awareness and prevent further expansion of maritime piracy in the country. More drastic and stringent action should be taken to deter culprits.”

Warredi Enisuoh, captain and acting director, shipping development and operations at the Nigerian Maritime Administration & Safety Agency (NIMASA), said the agency had signed a Memorandum of Understanding with the Air Force, the Navy and the police to curb the menace, adding that a piracy bill has been sent to the National Assembly.

Large scale oil theft and other security challenges have prevented Nigeria, Africa’s top producer, from producing up to its optimum estimated capacity of 3.2 million bpd, depriving the country of potential revenue.

Nigeria’s crude oil production averaged 2.26 million bpd in the first quarter of this year, according to data recently released by the National Bureau of Statistics.

Oil output was 30,000 bpd lower than average production of 2.29 million bpd in the corresponding period last year.

According to the Nigerian National Petroleum Corporation, the country’s current oil production, which was put at over 2.3 million bpd, is expected to rise further as the government clamps down on oil theft and sabotage attacks on production facilities.



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