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Buhari Vs IOCs On Crude Oil Theft: De-Briefing The Real Thieves? By Ifeanyi Izeze

March 21, 2016

It is reassuring that the Buhari-led government once in a while shows it actually means business and that we have not completely lost it as a nation. If it is true as reported in the media that the federal government has instituted civil suits against some International Oil Companies (IOCs) operating in Nigeria in a bid to recover the over $12 billion in alleged missing revenues being the estimated cost of under-declared crude oil shipments between 2011 and 2014, then we may be on the march to sanitizing and instilling transparency in the way things are done in the nation’s oil and gas industry.


Though not many of us knew the federal government had engaged a consortium of experts comprising Nigerian and American lawyers as well as technical partners (both foreign and local) to generate intelligence-based tracking of the global movements of Nigeria hydrocarbons, including crude oil and gas, with the main purpose of identifying the companies engaged in the practice that led to missing revenues from crude oil and gas exports/sales to different parts of the world, it should be emphasized without mincing words that this will be more or less the first serious step by President Mohammadu Buhari in debriefing the real thieves that are stealing our crude oil.

The federal government was severally accused in the past of not doing enough to address the menace of crude oil stealing either because some officials of government were directly involved or highly-placed people in the oil industry that are usually close to government deliberately deceived all of us into looking at the wrong quarters for those stealing crude oil from Niger Delta.

It would be recalled that President Buhari had shortly after he assumed office, banned 113 vessels from lifting Nigeria’s crude oil. He later lifted the ban after pressure was mounted by the ship owners and as Nigeria’s oil shipments suffered a decline in the global market. However, in lifting the ban, the president rather authourised that all incoming ships must tender a guarantee letter affirming they would not allow themselves to be used for any illegal crude oil liftings. He also ordered a review of activities of all affected vessels to determine their culpability in illegal operations in Nigerian territorial waters.

Now, following series of investigations undertaken by this consortium, it was established as suspected, that the crude oil declared to have been exported from Nigeria between January 2011 and December 2014, was less than what was declared to have been imported into the United States of America, a country that maintains detailed records and has stricter compliance measures.

Most times, what oil tankers declare they load at Nigerian ports are far lower than what the vessels discharges on arrival at ports in the USA. These were facts established by the Nigerian government-commissioned team of experts. Just imagine what this country would have lost over the years to these dubious business practices of the foreign multinational oil operators who come from countries that lecture us everyday on integrity and transparency in business transactions!

In the law suits as reported, it was asserted by the federal government that there is documentary evidence showing that scores of millions of barrels of Nigeria’s crude oil was illegally exported by the oil companies and sold to buyers in the US alone from January 2011 to December 2014.

And as explained by the federal government’s legal team in its deputations, the significant crude oil theft for which due payment is being sought by the nation, takes the form of accounting fraud, non-declaration or under-declaration of crude and gas cargoes.

The argument by the legal team led by Prof Fabian Ajogwu (SAN) is that cumulative missing revenue as estimated due to Nigeria as a direct result of this non-declaration and/or under-declaration of shipments made between 2011 and 2014 to buyers in the US alone is valued at $12,722,600,327.

On several posits on the menace of crude oil theft in the Niger Delta, this writer had insisted that if the magnitude of crude oil stealing as were reported were to be true, there couldn’t have been anyway such fleecing could have occurred without the collusion of some major producers in the country and international oil tankers that lift Nigeria’s crude on behalf of the IOCs and the Nigerian National Petroleum Corporation (NNPC).

Was it not actually suspicious that top executives of the multinational operating companies were at the forefront of trumping outrageous figures of mind-boggling volumes of even as much as 500, 000 barrels per day as daily loss from our oil facilities in the Niger Delta?

How is it possible for thieves to be stealing a fixed (pre-determined)  number of barrels of oil daily by mere tapping from pipelines? This has been my query over time. How can this heist be carried out without the connivance of the owners of the facilities- pipelines, wellheads, and flowstations- the IOCs, who also operate the crude oil loading terminals in Nigeria, most times un-policed?

The nation’s offshore arena is littered with scores of mega floating-production and storage platforms bleeding some of the nation’s most prolific wells and fields and yet these facilities are either poorly monitored or even unmonitored at all.

Different interest groups dangle figures of the volumes of loss and blame it on Niger Delta militants when in actual fact na oyibo wey dey house dey steal the oil give oyibo wey dey America and Europe!

Let’s even look at recent pronouncements by Shell, Chevron, and Agip on magnitude of loss each suffers everyday: The problem of crude oil tapping by thieves, as we were told, is localised on facilities on land and swamp areas. It is a near impossibility to steal crude oil from either wellheads or flowlines in an open sea without being spotted right on arrival.

Chevron in Delta is majorly an offshore producer (near shore and deep offshore). So majority of the company’s loses to thieves and vandals take place of the Chanoni Creek flowlines. Shell and Agip’s loses due to tapping from their facilities occur onshore- land and swamp terrains.

Question: what is the daily average of Shell and Agip’s combined onshore production that thieves can suck away 1.25 million barrels every day as recently declared by some top officials of these foreign operating companies?

It is important to note that the $12.7 billion reimbursement being asked for by the federal government is just for under-declared or rather stolen volume in the USA alone. The stealing may be of the same magnitude or even far worse in Italian, Indian and Chinese discharge ports as some business interests from these areas have over years as revealed in the Salt Pond oil theft scandal shown that they have no iota of regard to integrity and transparency in handling of oil transactions in Nigeria.

The American established cases should be a morale booster for the federal government investigators to extend their searchlight to Italy, India and China where for sure, we are going to rake-in bigger claims.

We will get to the root of this matter, if not today, tomorrow, God helping Nigeria!!

IFEANYI IZEZE lives in Abuja and can be reached at [email protected] and 234-8033043009