2022 budget implementation threatened as oil theft surges

A security expert has warned that except the rising crude oil theft in the Niger Delta is tackled, it would be difficult to fund not just the 2022 budget but subsequent government obligations effectively.

In a chat with Blueprint, Friday Efih said that a situation where communities are not involved in securing the pipeline would not yield the desired result.

Latest figures from the Nigeria National Petroleum Company Limited (NNPCL) revealed that oil production dropped from 1.39 million barrels per day recorded in February to about 1.15 million barrels per day in March.

In the 2022 budget, oil production benchmarked was put at 1.88 million barrels per day.

Efih insisted that to tackle the menace, the federal government must be willing to engage the communities that are familiar with the terrain.

According to him, because they know the terrain, they would be able to adequately monitor the pipelines.

“Oil theft must thrive because the natives are not being engaged. How can you bring somebody from another region to man the stations? Definitely, they must compromise. But, when you engage the natives, you will succeed more than an outsider” he said.According to him, “As we speak now, there is a massive disruption to our operations as a result of the activities of vandals and criminals along our pipelines in the Niger Delta area. This has brought down our production to levels as low as we have never seen before.“Today (Friday), we are doing less than 1.15 million barrels per day simply because some criminals decided that they should have some infractions on our pipelines. That is the biggest form of business disruption that we are facing today and this kind of engagements, the certifications that we have today around our systems and processes should be able to respond to this and part of the response is to bring in the best framework possible to contain the situation.“I am happy to tell us that enormous work is going on between us and relevant government security agencies, our partners particularly those that are at the corridors that are impacted and also the community members, and I am very optimistic that within the next two to three weeks every measurable outcome will come so that our businesses can continue.

“Also, as we speak now, the Nigerian Navy is launching a massive operation to contain oil theft in the Niger Delta region to ensure that every asset of the Nigerian Navy will be deployed with the support of the industry and NNPC, in particular, to make sure that we arrest the situation”.

However, question marks remain over the sincerity of the government to curb the situation.

According to a source who spoke to Blueprint on condition of anonymity, the situation is the way it is because top functionaries in the government and oil companies are involved.

“There was a time I went to one of our stations and when I saw what was happening close to the JTF houseboat, I met their commander and complained and he told my boss to stop sending me here. Look at the OPEC report concerning Nigeria’s rig count, the situation is gradually shutting down the economy.”He explained that the sophistication involve in oil theft has made it possible to sell crude without having to shutdown production. “There is a way you can tap crude without having to disrupt production. The wellheads can be working but the oil is coming out. It’s like your Somo, once there is a leak, it will be working but water won’t come out. That is the situation we find our self right now,”Analysts say Shell introduced the technology into Nigeria where you tap oil without disrupting production.They opined that the situation if not addressed will lead to more divestment by multinational oil companies from the country’s oil and gas industry.For political economist and development researcher, Adefolarin Olamilekan, “the shameful involvement of security personnel as an act of sabotage in reducing oil theft rather escalates it has further made the situation more complex.”

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