Thursday, December 5, 2013

FACTS: Dealing With Oil Theft

The recent claim by the Minister of Petroleum Resources, Diezani Alison-Madueke, that oil theft in Nigeria is supported by international syndicates in what appears to be another form of terrorism against the country has added a new dimension to the unrelenting stealing of the nation’s oil resources. By her estimates, Nigeria loses about N400 billion to oil thieves in the Niger Delta area annually.
The minister, at an event in London, submitted that the evil being perpetrated in Nigeria’s oil sector is highly technical, international-level crime, aided and abetted by syndicates outside Africa who are the patrons and merchant-partners of oil thieves.
The minister’s estimation of Nigeria’s loss to oil theft appears even conservative. It came on the heels of claims by the Co-ordinating Minister for the Economy and Minister of Finance, Dr.Ngozi Okonjo-Iweala, that Nigeria loses about 400,000 barrels of crude per day which amounts to N6 billion or $1.2 billion per month, representing about 17 percent of Nigeria’s daily production. The Minister of State for Finance, Dr. Yerima Ngama, said the amount earned in July was N365.04 billion lower than the budgeted income of N863.026 billion in the month of June. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), on its part, says the country loses over N1 trillion annually to oil theft, while a recent audit report by the Nigeria Extractive Industry Transparency Initiative (NEITI) says Nigeria lost a whopping N17.62 trillion to oil thieves between 2009 and 2011.This represents 7.7 percent of total revenue projected by the Federal Government within the two-year period in review.
From the Nigerian National Petroleum Corporation (NNPC), the information is that about $2.23 billion (N191 billion) revenue that should have accrued to the Federal Government from oil proceeds was lost to the activities of crude oil thieves in the first quarter of 2013, while an estimated $6 billion is lost annually.
According to a report released two months ago by Chatham House, a UK-based policy think-tank, oil theft in Nigeria has moved to an industrial scale. In the report, Chatham House said the country lost at least 100,000 barrels of oil per day, which is about five per cent of Nigeria’s total output in the first quarter of 2013, to theft from its onshore and swamp operations alone.
This massive oil theft is already affecting the Federal Government’s finances, with government reportedly forced to withdraw from the Excess Crude Account (ECA) to make up for the shortfalls in monthly revenue allocations to the three tiers of government for October.
This unbridled stealing of the nation’s crude oil has gone on for too long. It is not enough for government officials that should tackle the problem to continue wringing their hands in frustration and throwing around figures on how much we are losing, or lost, within a certain period. Oil is the mainstay of Nigeria’s economy. It is time we moved from lamentation to action. We cannot continue to brandish figures in the face of this monstrous challenge. The government needs to wake up and do whatever is necessary to stop the stealing.
Every time an agency of government comes out to tell the nation how much is being lost to oil theft, this administration admits that it knows the problem but just does not know what to do about it. And, a government admitting that it cannot protect national resources is admitting it is not worthy of the powers of state at its disposal. That is shameful and disheartening.
What is worse, the different figures released by these agencies do not always add up. It seems as if we do not even know how much oil is produced in the country. If we do not know with utmost certainty how many barrels of crude oil we produce daily or annually, how can we know how many of these barrels are stolen? If we do not know how many barrels are stolen, how can we believe the figures being thrown around? Yet, this is the nation’s major source of livelihood. Do these statistics not suggest that the government is being economical with the truth on this matter?
Certainly, oil thieves are not ghosts. We also know for a fact that the full powers of the nation’s armed forces are at the disposal of the Federal Government to deploy and destroy this menace. Why the government is allowing this cancer to steadily eat up Nigeria’s finances is incomprehensible. The devastating effects of the problem on our economy are staring us in the face. For our largely mono-product nation, trifling with this monster can only destroy our economy. This is a prospect that is terrifying, but the situation can be remedied. The time is now.
The Federal Government must pull out all the stops and fight oil thieves. We have had enough of the depressing figures and statistics. We need a new dawn in the fight against this menace that is threatening our economic security. This steady decline in crude oil income must be halted. Continuous expression of helplessness is an admission of failure by the government. It is totally unacceptable.
Source: Sun News