A revelation by the National Security Adviser, Nuhu Ribadu, that about 400,000 barrels of crude oil are still being stolen daily demonstrates the government’s incompetence, and the triumph of corruption. At the head of a federal delegation visiting oil infrastructure sites in Abia and Rivers states, Ribadu lamented that local and international oil thieves and vandals were costing the country $4 million losses daily and preventing the realisation of production targets. President Bola Tinubu should initiate a massive overhaul of the security and regulatory systems to stop the haemorrhage.
Everything about Nigeria’s oil sector is messy, each operation a national disgrace. It has installed capacity to produce over 2.0 million bpd and has a current OPEC quota of 1.8 mbpd but cannot meet it because the state cannot stop oil theft cartels. It is currently the 15th largest crude producer but shamelessly imports almost all its refined petroleum products needs. In 2021, it was ranked the world’s seventh largest crude exporter by Investopedia.
There is no other country, save for failed states, that would tolerate the daily loss of one fourth and more persistently for decades of its major export commodity, 90 per cent export revenue earner and over 70 per cent funder of its national budget without finding a permanent solution. Mexico, the country that is second largest victim of oil theft loses just 5,000 to 10,000bpd, and Iraq, despite its long-running civil unrest, loses even less.
Nigeria is a failing state; one that cannot overwhelm criminals within and outside the official institutions and cannot protect its national assets. All efforts to eliminate the well-entrenched syndicates have not worked.
Successive administrations since 1999 have failed to stop the theft; Tinubu should be different. Although, Ribadu said the administration was taking “actionable steps,” Tinubu is miscalculating by retaining the leadership of the opaque Nigerian National Petroleum Company Limited, and the current complicit security system and personnel. The joint task forces, military, the Nigerian Navy forces, and Nigerian Security and Civil Defence teams, police and private security firms run by ex-militants are compromised and have been unable to halt the massive leakage.
Tinubu will also fail without effecting sweeping changes in the leadership of the NNPC, the Nigeria Upstream Petroleum Regulatory Commission, and the Nigeria Midstream and Downstream Petroleum Regulatory Authority. These agencies require surgical operations, forensic and law enforcement probes.
The entire personnel of the military and other security agencies, especially the Navy, engaged in security anti-oil activities in the Niger Delta, should be disbanded and posted away from there, and new personnel deployed there.
The country is broke. Tinubu’s promise to stop borrowing to service debts and spending of 90 per cent of all revenue on repayments may not be achieved unless oil theft is stopped. In October 2022, the then Minister of State for Petroleum, Timipre Sylva, said Nigeria lost 700,000 barrels daily to oil thieves; the NNPC also stated in September 2022 that it lost $700 million every month to oil theft. NEITI added that Nigeria lost 619.7million barrels, valued at N16.3 trillion, to crude oil theft from 2005 to 2021.
Research portal, Dataphyte, revealed that the NNPC spent N136 billion on security, repairs, and maintenance of vandalised infrastructure.
Yet, crude oil and gas still provide 70 per cent of Nigeria’s budget revenues and 95 per cent of foreign exchange earnings.
Like Saudi Aramco and Norway’s Equinor, crude oil leakages should be combated with various technologies like leak-detection sensors, acoustic sensors, fibre optic sensing, satellite surveillance, pressure drop analysis, and corrosive monitoring.
Nigeria is bleeding towards terminal financial distress; Tinubu should act today to stop the deadly flow.
