The Nigerian National Petroleum Company Limited (NNPC) has confirmed that the country’s oil production has risen to 1.67 million barrels per day, some millions short of the 1.8 million bpd quota allocated to Nigeria by the Organisation of Petroleum Countries (OPEC).
Revealing this at a meeting of stakeholders in the oil and gas industry, called to discuss the challenges of crude oil theft and losses affecting the oil and gas industry, the Group Chief Executive Officer of NNPC, Mr. Mele Kyari, said that the ‘rectangular’ security approach was already working.
According to him, the approach comprises the NNPC and partners, regulators, government security operators and the communities, boosted by the adoption of technology, which ensured the recovery of production from what it was in July 2022 to 1.67 million barrels per day.
Kyari, who was represented by the NNPC Chief Upstream Investment Officer, Bala Wunti, at the event chaired by Osinbajo, said the implementation of the ‘Detect, Deter, Destroy’ and Recover (3D strategy) has been a game changer in the fight against crude oil theft and vandalism.
He added that the establishment of the central command and control centre for effective monitoring and coordination, the launch of the whistle-blowers portal and the crude oil validation portal as well as the deployment of some of the best-in-class surveillance tools and technology had helped in reducing oil theft.
The NNPC boss stated that a key element of the collaboration had been the on-boarding of the private security contractors from the host communities, which were hitherto isolated.
He said the security contractors’ in-depth knowledge of the terrain and modus operandi of the criminals had led to massive discoveries of illegal connections and interception of vessels ferrying stolen crude oil.
Kyari said with the current sustained efforts, facilities that have been shut down have reopened, and injection of crude oil into major trunklines for evacuation to the terminals was being ramped up.
He said the oil and gas industry was poised to reposition itself for a sustainable growth trajectory as the efforts to rid Nigeria of the menace of crude oil theft continue to gain traction.
According to Kyari, a lot of work had gone into changing the old narrative and bringing all the industry stakeholders together to confront a common enemy.
Crude oil theft, he said, had been a major setback for Nigeria. Last August, crude oil theft forced the country’s production down to 1.1 million barrels per day. This had cut the contribution of foreign exchange earnings from crude oil export from 90 per cent when production was high to 78.5 per cent as of the third quarter of 2022.
To arrest the situation, NNPC said it engaged a private security, Tantita Securities Service owned by Government Oweizide Ekpemupolo (Tompolo) on August 13, 2023 for pipeline surveillance.
The NNPC and the security agencies had put up a control centre to provide surveillance of all the country’s oil and gas assets in the Niger Delta. The surveillance system is known as the Central Coordination, Data Integration and Activation Control Room.
In August last year, crude oil theft forced Nigeria’s production down to 1.1 million barrels per day far below the OPEC quota for the country.
The oil theft menace consequently cut the contribution of foreign exchange earnings from oil export from 90 per cent when production was high to 78.5 per cent as of the third quarter of 2022.
The menace had made the NNPC to engage a private security outfit, Tantita Securities Service, owned by ex-militant leader, Government Ekpemupolo (Tompolo), on August 13, 2022, for pipeline surveillance.
Working with the private security outfit and government security agencies, NNPC had on November 9, last year discovered over 58 illegal connections to the trans-Escravos, trans-Forcados, and other major trunk lines by oil bunkers in Delta and Bayelsa states.
Also, the NNPC in collaboration with security agencies have put up a control centre, known as the Central Coordination, Data Integration and Activation Control Room, to provide surveillance of all the country’s oil and gas assets in the Niger Delta.
Like the Saudi Aramco, the NNPC Data Control Centre uses video visibility to monitor the country’s Niger Delta pipeline networks, where more than 90 percent of the country’s crude is explored.
NNPC is also working with its business partners to make sure every data concerning Nigeria’s assets are visible through the centre to enable quick action during emergency.
However, through the Data Control Centre, the NNPC has the capability to see and monitor the movement of vessels in the coast of Nigeria’s territorial waters in real time.
From the facility, officials of the NNPC, working with operatives of the Nigerian Navy could determine, in real time, if a vessel is carrying out operations within Nigeria’s coastal waters legally.
The Data Centre also uses an intelligence system to detect when an incident of crude oil theft has occured, the location, and the vessels involved.
Immediately such illegal operation has been established, officials of the Centre through its Incidents Reporting System would immediately escalate such threat to the security agencies for immediate action.
Through the facility, the security agencies have been able to reduce their incidents response time from two to three days fee weeks ago to less than two hours currently.
Osinbajo: Those Managing Nigeria’s Oil Resources Must Account for Crude Oil Theft
Also speaking at the event, Osinbajo declared that tackling crude oil theft and sabotage were major concerns of the federal government, saying those in charge must be accountable because, besides economic consequences, institutional and personal reputations are at stake.
Osinbajo stressed that so grievous a crime cannot simply be a subject for summits, saying, “people must do their jobs and if they are unable to do them, then there must be an accounting for such failures. Institutional and personal reputations are at stake.”
He expressed concern that, “oil theft and sabotage of oil and gas assets are a clear and present danger to our economy and national security.
“Not only do they pose a serious threat to oil exploration and our energy economy, but they also impact negatively on revenue accruals to the Federation and the business prospects of investors in the oil sector.”
Noting that the federal government prioritised the development of the Niger Delta, as well as the protection of oil assets, the vice president emphasised that the theft of crude oil and the accompanying attacks, “on our energy infrastructure, especially in the Niger Delta, have since the inception of the present administration, been of utmost concern.”
Against the backdrop of huge production cuts and revenue losses, Osinbajo highlighted the work done by the National Economic Council, which he chairs.
According to him, the Council set up an Ad-hoc Committee to ascertain the magnitude of oil theft and losses in Nigeria and recommended appropriate remedial measures.
His words: “Most of the recommendations of the Ad-hoc Committee informed the Petroleum Industry Act, 2021 and are being implemented. Even so, acts of vandalism of oil and gas infrastructure, oil theft as well as low production yields are still being reported in damaging and unacceptable proportions.”
He noted that Buhari had enacted the Petroleum Industry Act of 2021 aimed at revitalising the oil and gas industry.
“Among other things, the Act stipulates elaborate provisions to accommodate the needs of the Host Communities in the oil and gas producing areas.
“The aim of these provisions is to assuage their sensibilities, give them a sense of belonging and foster unity of purpose with oil companies for the mutual benefit of all,” he explained.
Speaking on the theme: ‘Protecting Petroleum Industry Assets for Improved Economy’, the vice president said, “this administration is confronting these acts of economic terrorism on multiple fronts and with a range of tools.
“We have invested significantly in scaling up our maritime security architecture. In June 2021, President Muhammadu Buhari flagged off the Integrated National Security and Waterways Protection Infrastructure Project otherwise known as the Deep Blue Project – a collaborative multiagency effort involving the armed forces, the police and the Department of State Services (DSS), the Nigerian Maritime Administration & Safety Agency (NIMASA), jointly led by the Ministry of Transport and the Ministry of Defence.
“The project provides air, naval and land assets for surveillance, policing, and search and rescue operations in our coastal waters and our exclusive economic zones.”
Osinbajo also recalled that he was at the Navy Headquarters, “where I commissioned Falcon Eye, a maritime surveillance facility that networks sensors installed along our nation’s coastline. It is designed to provide actionable intelligence in real-time on maritime security threats and enable the swift and preemptive interdiction of criminals.
“Taken together, these two initiatives are huge investments in making our waters safe for energy commerce and inhospitable for the criminals that violate our vital economic interests.”
Osinbajo further recalled that in 2017, on the directive of the President, he undertook “a tour of all oil producing states especially in the Niger Delta to engage with stakeholders and get a measure of the grievances that formed the backdrop to the sabotage of the oil installations.”
Following the vice president’s tour of the region, the Buhari administration’s New Vision for the Niger Delta was developed in 2017, as a forthright partnership between the Federal Government, State Governments, Private Sector and Local Communities, through which the people of the region can maximally benefit from the wealth of their land.
“As a result of those engagements and based on the feedback we had received from the communities, we were able to draw up the New Vision for the Niger Delta which helped to calm the situation and stem the attacks on oil facilities. These efforts led to significant success”.
According to the 2018 Nigeria Oil and Gas Industry Annual Report, the vice president said crude oil production at the time went back up to an estimated daily average production of 2.12million barrels per day. But he added that this upward trend was upended later by the COVID-19 crisis.
Osinbajo noted that one of the pivots of the New Vision initiative was the establishment of modular refineries to curb illegal artisanal refining in the region and create employment opportunities for the region’s youths.
According to him, following the recommendation by an Ad-hoc Committee of the National Economic Council, it was determined that “creating employment opportunities for the youths of the oil-producing communities and making petroleum products available in these communities will go a long way to reduce hardship and criminality in the region.”
The vice president then assured that the Buhari administration remains committed to “captaining the ship of governance to the very last hour,” noting that “we committed to leaving our best actions, thoughts and ideas for use of the next administration and the benefit of our nation.”
Deji Elumoye, Emmanuel Addeh in Abuja and Peter Uzoho