NNPC/ IOCs And Crude Oil Theft: Curiously Nobody Is Talking About It Anymore By Ifeanyi Izeze

What suddenly happened? Has crude oil stealing stopped? Is it not curious that the Nigerian National Petroleum Corporation (NNPC), the Navy, the Joint Military Taskforce (JTF) and the International Oil Companies (IOCs) seem not to bother anymore about the menace of crude oil theft from facilities in the nation’s Niger Delta, shallow, and deep offshore arenas? How could a ferocious campaign against the menace in our yesterday suddenly go blank?


The story in the mill then was that the Niger Delta militants, Nigerian navy commanders etc were neck-deep in the oil bunkering. Later, we were told in no mistaking tunes that the oil theft was perpetrated by people close to government in Jonathan’s administration. Who is now running this oil theft racket? Or has it stopped?

Those who know would agree that Nigerians were taken for a ride by wilful mischievous spins. Way back in August, 2015, the then Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, who incidentally is the current Minister of State for Petroleum Resources, at a one-day seminar on Security in the Gulf of Guinea, organized by the Gusau Institute in Abuja, declared that “crude oil theft would be eradicated in the next eight months as the corporation has put in place measures to check the menace and bring perpetrators to book.”

Now, it’s over two years after, has crude oil theft stopped from the nation’s facilities and territorial waters? If no, how come the federal government, NNPC, and the IOCs suddenly went dumb on the issue of oil theft and crude oil pipeline tampering? Is this not curious?

At different times in our recent past, figures ranging between 200,000- 1.200,000 barrels were dangled as the volume of crude oil stolen from Nigeria on daily basis. Contrary to what some people wanted us to believe, the pipeline tampering for illegal refining was just not where the real problem lied. On daily basis, Nigeria still loses over I million barrels to corporate oil thieves. This is the truth that is bitter!

Now this is where the big problem lies: Unknown to Nigerians, for several years, oil companies based their total production figures on unconfirmed volume estimates, using dipsticks to make volume calculations. This method of calculation is easily susceptible to manipulation by mere altering of the physical properties of the crude
at the export terminal facilities. Transnational oil companies in collusion with top government officials in the NNPC and some of its subsidiaries particularly NAPIMS with impunity have been engaged in unauthorized lifting or lifting in excess of approved quantities of crude oil from the nation’s export terminals. The Chatham House report
even confirmed this. This explains why most of the major oil companies have been reluctant to adopt more precise methods, such as metering, due to the very fact that the old system can be manipulated.

Though this is not in any way trying o exonerate the former Petroleum Minister, Diezani Allison Madueke, of all the allegations of corruption and mismanagement against her but truth be told, efforts at checkmating some of these multinationals may be linked to some of the campaigns against her particularly from America and the United
Kingdom. This is a discussion for another day!

In addition to the ‘empress’ manner Diezani ran the nation’s oil sector, she stepped on the toes of the “super powers” particularly the Americans, Brits, Chinese and their very influential Nigeria partners when she in attempt to exonerate herself from all the allegations of malfeasances in the nation’s crude oil sales, instituted a tracking
probe to match the volumes of crude oil lifted from the nation’s platforms and the declared volumes at the various foreign discharge destinations.

The company, Molecular Power System, a due diligence company, was engaged to provide technical data (records of crude oil and liquefied natural gas lifting in Nigeria as obtained from the NNPC, and landing certificates at global destinations) to verify possibilities of non-declaration to the federal government by multinational companies.

Investigations undertaken by this consortium, established as suspected, that crude oil declared to have been exported from Nigeria between January 2011 and December 2014 was less than what was declared to have been imported into the United States of America, a country that maintains detailed records and has stricter compliance.
Cumulative missing revenue (as estimated) due Nigeria as a direct result of this non declaration of shipments made between 2011 and 2014 to buyers in US alone was valued at $12,722,600.327 ($12 billion plus).

As unraveled and reported, “The data gathering of shipment to the USA for the period 2011 to December 2014 through critical NNPC data and the Central Bank of Nigeria, CBN, pre-shipment inspection report shows undeclared crude oil shortfalls of 57,830,000 MT of Nigerian crude oil, translating to well over $12 billion to the USA, also over $3billion to China, and $839,522,600 to Norway. These were conclusively ascertained by buyers’ bill of lading, arrival dates, destination ports, quantity of crude oil and other documented information.”

Also, a liquefied natural gas shortfall of 727,460 metric tonnes from shipments to seven countries estimated at over $461 million was established. The revenue loss, was traced to cargoes at each destination port of entry, and was established as undeclared cargo. The tracing was found in 51 countries where Nigerian LNG was exported but undeclared, with the US again being the largest receiver.

The Nigerian subsidiaries of the Anglo-Dutch Shell, Italian ENI (Agip) and the American Exxon/Mobil were among the identified major culprits in these dubious transactions.

The $12 billion was stolen just within four years and was the volume that ended up in the US alone. So when you extrapolate the period between 1999-2010 and 2014 till date and other rogue countries such as Italy, China, South Africa amongst several others, you’ll begin to imagine what these dubious foreign operators and their Nigerian
collaborators including top officials of the NNPC, NAPIMS, and people around power had done and may still be doing to this country.

If not only in Nigeria, which other oil producing country in the world do you have  government officials rely on third party reports to ascertain the volumes of crude liftings? So why won’t the country lose revenue to oil theft on industrial scale? Is it not shameful that the machines that monitor loading into the vessels were bought, owned, calibrated and operated by the IOCs without any form of supervision and/or participation by any government agency- the DPR, NAPIMS, DSS, or Customs?

How do you rationalize that officials of the Nigerian Customs Service, came to the House of Representative Committee probe to tell the whole world that “lack of capacity was responsible for offshore deployment of officials of the agency with no technical or specialized training to monitor and evaluate vessels lifting crude oil.” The Service also claimed that its lack of ocean-going vessels to carry out the inspection was part of its constraints as it has to rely on vessels owned by the IOCs to access and assess lifting oil platforms.

Is the case of DPR, NAPIMS, etc in any way different from the picture painted by the Customs? The answer is No! These government officials that were supposed to be the police and inspector of what these foreign oil companies do with our produced oil at the various export terminals, are usually transported, housed, fed etc by the same
companies they were supposed to be policing at the loading terminals particularly the fleet of FPSO scattered in the nation’s offshore arena.

The institution of legal proceedings against the IOCs (Shell, Agip and Exxon/Mobil) by the Federal Government is understandable and welcomed though nobody can ascertain the status of the case whether it is still on or has been wiped out. However the reasons for not making efforts to identify the Nigerian collaborators in NNPC/NAPIMS, DPR, Customs and influential persons around governments remains at best blurred and at worst obscured. Non- declaration and/or under declaration of
shipments is practically impossible if a Nigerian or some Nigerians did not play vital roles in the chain of events leading to the stealing of the huge sums. So who are these Nigerians or their proxies? We can do better to unmask these people if we are serious as a nation. God bless Nigeria!