In Nigeria's crude capital, a plan to win the war against oil theft | Oil and Gas News

Port Harcourt, Nigeria – At dawn, the dense creeks and swamps of the Niger Delta are shrouded in an eerie silence, interrupted only by the occasional chirping of Herons, a rare waterfowl found in this part of Nigeria.

Suddenly, lightning fast, the water bubbles and surges, announcing the galloping approach of speedboats.

The boats usually carry heavily armed militiamen, often dressed in overalls, suggesting they are technicians, said Tonye Francis, who lives in the oil-producing Ogu-Bolo community in Rivers State, which has been in the shadow of an oil conflict for years. .

Also in the boats are several dozen empty mini-drums with hoses attached to the bases, which will be connected to a nearby oil pipeline after being professionally ruptured, the young man told Al Jazeera.

In no time at all, the mini-drums are filled with crude oil and loaded into ships. The ships, escorted by speedboats, then make their way out of the inlet – through other dense creeks and marshes that dot the area – heading towards a waiting foreign vessel, nautical miles away.

"It feels like a movie scene when these activities are going on," Francis said.

"They (the oil thieves) work unhindered. Sometimes those involved are given security cover by their sponsors."

For years, incidents like this one have become common in Rivers State, which prides itself as Nigeria's oil capital. But the scene is also a recurring one across the Niger Delta as thieves try to siphon crude from oil pipelines that criss-cross the region.

"We cannot stop them without the support of the military men deployed to the area," Francis said.

Nigeria is one of Africa's leading oil exporters. But the oil theft on an industrial scale posed a major threat to communities and the wider economy. Oil theft costs Nigeria millions of dollars every month; some $23 billion in oil revenue was lost in 2022 – one of the highest in recent years.

This has forced Nigeria to slip as the continent's biggest exporter, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).

But it appears to be making a comeback and authorities hope that improved security measures to help crack down on criminals will see them win the war against oil theft for good.

oil theft
An unidentified man drives a speedboat carrying oil containers in the Niger Delta region (File: Sunday Alamba/AP)

'Oil theft is a big problem'

Rivers is one of the six states that host oil installations in the country.

As part of a plan to boost the region's oil production, authorities in the state last week unveiled a fleet of military-grade gunboats to help fight crime and oil theft.

Speaking to Al Jazeera, state governor Siminalayi Fubara explained that "oil theft is a major problem that needs all hands on deck to tackle it."

“These six gunboats donated by my government are meant to support the Nigerian Navy to ensure that we drastically reduce the activities of oil thieves,” he said.

The gunboats will improve waterway patrols and response times, especially near submerged oil export pipelines that are prone to attacks, officials said.

"We set up local vigilantes to support the protection of oil facilities, acquire gunboats, and (protect) the ecosystem of the region," Fubara added.

Rivers is home to pipelines that transport crude oil from other states to its Bonny export terminal, which accounts for 6.5 percent of Nigeria's total revenue.

But for decades, theft has had a negative impact on the overall income of a country where around 90 percent of government earnings are generated from oil.

Thousands of oil spill incidents have occurred since oil was discovered in commercial quantities in Nigeria in 1958 - due to the activities of oil thieves. The drop in production often has adverse effects on government revenue.

It still affected the people of the communities in these oil-rich areas. Those dependent on farming and fishing have felt a direct effect on their livelihoods and residents have reported numerous health issues.

To provide alternative opportunities for young people, Rivers State government plans to invest more in health, education and infrastructure in areas at risk of pipeline vandalism.

"We are doing our best to discourage any kind of economic sabotage," Fubara told Al Jazeera, "that is why the country's output has increased in recent months, given our support and protection of pipelines."

oil, Nigeria
Oil partially fills containers at an abandoned illegal refinery in Nigeria (File: Sunday Alamba/AP)

'Recent gains can be sustained'

Oil exports are Nigeria's mainstay of crude production and are now averaging 1.8 million barrels per day (bpd) compared to 1.3 million bpd in March, although the country has the capacity to export nearly 2 million bpd.

The group chief executive officer of the state-owned Nigerian National Petroleum Company, Mele Kyari, attributed the increased production to improved safety measures and the support of joint venture partners.

“We have reached a new peak in production that we have not seen in the last three years. This is in line with the sustained efforts by the armed forces and other security agencies to protect our critical assets," Kyari said in Nigeria's capital, Abuja.

"I am calling for enhanced and sustained security engagement."

Industry experts are optimistic that the country's oil output will peak in a few months if the measures in place are sustained.

“There is every need to increase crude oil production above the current success numbers to help Nigeria defend a rapidly falling naira and tackle the inadequate forex supply that has hit the currency market so hard that the ripple effect is being felt to increase the cost. goods and services while citizens struggle to cope with the harsh realities," economist Steve Nwachukwu of Steward Asset Management told Al Jazeera.

Nigeria has been struggling with rising inflation and a sharply devalued currency since President Bola Tinubu introduced reforms aimed at reviving the economy more than a year ago.

Recently, labor leaders and civil society have led anti-government demonstrations to express dissatisfaction with government reforms that they say have caused high inflation.

The country's inflation rate rose to 34.60 percent in November, mainly due to rising food prices and an increase in the pump price of petroleum products, according to figures released by the National Bureau of Statistics.

The federal government has maintained that this phase of the economic crisis is temporary and expects the increase in oil production to increase revenue.

“The recent gains can be sustained if deliberate actions are taken to combat oil theft and encourage IOCs (international oil companies) and others to increase their investment and commitment,” Nwachukwu said.

oil thieves Nigeria
Smoke rises from an illegal oil refinery in Ogoniland, outside Port Harcourt (File: Sunday Alamba/AP)

'A Total Reorientation'

For the governor of Rivers State, more effort is needed to discourage oil thieves.

"We are committed to the government's remediation of the polluted environment. This is why we are increasing support to other economic sectors such as agriculture to tackle poverty, which is one of the main reasons why the people break pipelines to steal oil,” said Fubara.

“What we need is a total reorientation of the people to discourage them from stealing oil. It's a bad situation because you have children as young as 14 and 15 involved," he added.

Pollution from the activities of oil thieves continues to endanger the lives of the 30 million inhabitants of the Delta. Between 2011 and 2021, there were 9,870 spill incidents, according to data from the National Oil Spill Detection and Response Agency (NOSDRA).

These spills are mostly caused by oil thieves and most communities can no longer engage in agriculture as their livelihoods have been destroyed.

In the early 2000s, Niger Deltan youths, resentful of the economic marginalization and environmental degradation of the region, banded together in armed groups, destroyed oil pipelines and kidnapped oil company employees. These attacks significantly reduced oil production, costing Nigeria a fifth of its production.

A presidential amnesty was granted with unconditional pardons and cash payments to rebels who agreed to turn in their arms.

In recent years, armed conflict in the Delta has eased, partly due to surveillance agreements granted to some former rebel leaders after the amnesty deal.

Nigeria's oil minister, Heineken Lokpobiri, admitted the war against oil theft was an uphill battle, but insisted the country was winning.

"Everyone knows that oil theft is one of the biggest economic problems we have. And we are fighting them,” Lokpobiri told journalists in Abuja.

"We are not where we want to be. But certainly, this is a tremendous improvement on the issue of oil theft. We will keep fighting until we get to 2 million, 2.5 million barrels," according to the minister.

In 2022, Nigeria lost its top position among oil-producing African countries, falling behind Angola, Algeria and Libya. But it bounced back this year and maintained its place as the continent's top exporter, according to OPEC figures released in April.

"(This) will greatly ease the naira and stabilize the foreign exchange market, which in turn will significantly reduce the cost of goods and services as the high exchange rate is the major contributing factor to high input costs for businesses and manufacturers," said economist Nwachukwu . .



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *