As Nigeria’s economy continues to suffer as a result of crude oil theft, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced on Tuesday that it had formed a team of experts to conduct a thorough audit of the activities of operators in the upstream petroleum industry over the last two years.
The commission stated that the move was made to determine the actual volume of crude oil stolen by vandals and saboteurs, in contrast to recent allegations made by some industry operators about the volume of crude theft on a daily basis.
Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), lamented on Monday the unprecedented rate of oil theft in recent times and its crippling effect on government revenue and reserve accretion.
The governor’s remarks came a day after THISDAY reported similar concerns expressed by Mr. Austin Avuru, co-founder and former CEO of Seplat Energy Plc, who called for a state of emergency in Nigeria’s oil and gas sector.
He claimed that up to 80% of the oil pumped in the country, particularly in the east, was stolen.
Avuru spoke just a few days after a businessman and Chairman of Heirs Holdings, Mr. Tony Elumelu, bemoaned the industry’s deterioration, emphasizing that approximately 95% of oil production does not reach the terminal.
Aiteo Eastern Exploration and Production Company (AEEPCO), the operators of the Nembe Creek Trunk Line (NCTL) pipeline, had previously threatened to leave the facility due to persistent vandalism, sabotage, and outright theft.
Nigeria has failed to meet its quota set by the Organization of Petroleum Exporting Countries (OPEC), losing nearly 400,000 barrels of oil per day due to capacity constraints.
In response to these concerns, the Commission’s Chief Executive, Mr. Gbenga Komolafe, issued a statement in which he revealed the latest step in the investigation, stating that the panel would conduct a forensic investigation into the technical and commercial operations of oil companies involved in drilling and selling crude oil.
Komolafe stated that the commission was aware of the “tragedy of oil theft,” which he described as a plague on the industry and which prompted an industry-wide initiative last year to combat it.
This, he said, was to help increase crude production levels, and he said it was a result of an express presidential directive.
Concerned about ongoing acts of sabotage by criminals and unscrupulous individuals within the industry, President Muhammadu Buhari directed that all necessary mechanisms be activated to combat oil theft in particular and to immediately end other forms of economic sabotage in the oil and gas industry.
“Action on the directive began immediately and is still ongoing,” he said.
He confirmed that the commission finds the crude loss figures recently quoted in the media by some operators concerning, given the actions taken thus far on the issue.
While stepping up efforts to combat oil theft in collaboration with the military and other relevant agencies, he added, the commission has mandated the newly formed panel to investigate claims regarding the volume of theft from various oil fields.
Furthermore, one of the points of reference was for the committee to determine the actual operational capacities of the operators; to determine if the volumes being touted are accurate; and, if so, what additional measures are required to effectively address the issue.
“While a stakeholders’ meeting has been called to discuss the matter in order to jointly address the situation, the commission, at a meeting of its management meeting on Monday 21, activated its technical and commercial mandate to demand the operators’ financial accounts and reservoir accounts for productive oil wells for the previous two years.”
To determine the veracity of the claims, the commission, according to Komolafe, has activated all necessary mechanisms to get to the bottom of the matter and determine the actual volume of crude stolen as opposed to the volumes claimed.
“This will include both a sales audit and a reservoir audit in order to establish correlations between their technical and commercial activities and the monitoring and evaluation records available to regulatory agencies,” Komolafe explained.
