By Cross Udo
The Chief Executive Officer (CEO) of the Nigeria National Petroleum Company Limited (NNPCL), Mele Kyari, yesterday said that crude oil theft has become a widespread phenomenon involving all strata of the society including religious, community leaders, and government officials.
Kyari also said that the entire network of pipelines for petroleum products distribution in the country have been deliberately shut down as a result of the activities of vandals and also because the refineries were not operating as a business instead, they were incurring losses.
Speaking when he featured at the ministerial briefing organised by the Presidential Communications Team at the State House, Kyari said that the authorities of the NNPC borrowed one billion US dollars from AFREXIM Bank to put in place the refineries, adding that the management of the company was confident that it was restoring the company for about 90 percent efficiency.
He further noted that repayment of the borrowed money was tied to the productivity of the refineries, just as he boasted that NNPC would deliver on the rehabilitation exercise.
While disclosing that the company has discovered that stolen products are warehoused in churches and mosques with the knowledge of all members of the society where the incidents occur including the clerics, he said various law enforcement agencies have arrested 122 persons involved in the nefarious pipeline vandalism and oil theft from April to August of 2022.
According to him, wherever the petroleum products have gone, everybody seems to have become some sort of vandal and beyond the issue of vandalism, the pipelines have also aged necessitating their shutdown.
Kyari noted however that the company has decided to come up with a new pipeline management system that will enable them to be put to use for the distribution of products in the country.
He also justified the government’s recent move to hire private entities to safeguard the network of oil pipelines crisscrossing the country.
He claimed that in one instance, at least 295 illegal connections were spotted on a 200km stretch of pipeline.
According to him, “As you may be aware because of the very unfortunate acts of vandals along our major pipelines from Atlas Cove to Ibadan, and all others connecting all the 37 depots that we have across the country. None of them can take delivery of products today.
“The reason is very simple. For some of the lines, for instance, from Warri to Benin, we haven’t operated for 15 years. Every molecule of product that we put gets lost. Do you remember the sad fire incident close to Sapele that killed so many people? We had to shut it down and as we speak, we have a high level of losses on our product pipeline.
“You remember Lagos when a fire outbreak happened on one of our pipelines? We discovered that some of the pipelines were connected to individuals’ homes. And not only that, with all sensitivity to our religious beliefs, some of the pipelines and some of the products that we found are in churches and mosques.”
On the deliberate shut down of pipelines conveying petroleum products across theft-prone areas, he said, “When we say we are losing several 700,000 barrels of crude oil per day, we mean it. This is opportunity loss. No company will produce oil and then you lose 80 per cent of that and continue to produce the oil.
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“So we deliberately shut down the pipelines whenever we see these infractions getting to a limit that we cannot manage. So that means as we speak today, we know for sure, there’s at least 700,000 barrels that we could have produced that we can’t because we cannot guarantee the safety of the pipeline,” Kyari explained.
The NNPC Chief said the government’s response to oil theft has led to the arrest of 122 persons between April and August 2022.
According to him, security operatives discovered 342 illegal oil reservoirs, 355 cooking pots, 959 metal tanks, 37 trucks, 452 dugout pits, 737 ovens, boats and 179 wooden boats, 30-speed boats, and 11 vessels used by vandals to perform their nefarious activities in the oil-producing regions of the Niger Delta.
This has led to the recovery/destruction of 35.8 million litres of crude oil, 22 million litres of Automotive Gas Oil, 150,000 litres of petrol, and 760,000 litres of kerosene within the five months under review.
Asked if the company will name the culprits, he said “I told you that there are 122 arrests. It is not the NNPC that will make announcements about criminals and culprits. But I know that names exist. They will be named, but the most important thing to do is to prosecute them and show the world that it is wrong to do this.
“It’s for us to follow through and to make sure that there is prosecution and whilst they’re prosecuted, they will be lined up and everybody will see them no matter who they are.”
•Says pipeline contract to Tompolo right decision
Fielding questions on the recent contract between the Federal Government and former Niger Delta agitators, Kyari noted that it was the “right decision” to hire private contractors to protect its pipelines.
He argued that although the security agencies are doing their part, end-to-end pipeline surveillance would require private entities and the community.
He said, “Part of the security intervention that we’re doing is end-to-end.
“What we did is, first, to ensure the government security agencies play their part. We have our navy, army, and department of security services, they’re doing an excellent job of containing this. But sustenance is everything.
“Therefore, we decided that we need private contractors to man the right way and also operate outside the right of way so that they can join us to manage members of the community. And we don’t have access to that.
“We put up a framework where contractors were selected through a tender process for people who can do it. And Tompolo was just mentioned. We’re dealing with corporate entities. He may have interests in the company, but we’re not dealing with Tompolo. But we know that he has an interest in that company.
“We know that we’re engaging all other individuals who will be of help to us in this situation. This has happened over time. And the result was that it was contained under a process like this and we believe that we have taken the right decision.”
The NNPC Boss also insisted that with the kick-off of operations at the Dangote Oil Refinery early next year, the country will cease importing petrol by mid-2023.
According to him, “This is very practical. This is possible. When we are done with our refineries and the Dangote refinery and other small initiatives that we are doing small, modular, condenser refineries that we’re building, if that happens, and we’re very optimistic it will happen, you will see that this country will now be a net exporter.
“The flow of supply will change by the middle of next year. So, you will not need importation of petroleum products into this country by the middle of next year.”
The NNPC CEO said beyond the issue of vandalism, the pipelines have also aged necessitating their shutdown.
The NNPCL boss also explained why President Muhammadu Buhari still has to approve the board members of the company despite now being an independent outfit.
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He said, “Boards of companies are always appointed by shareholders. Shareholders are always represented, this is typical. If anyone here owns a company, just go and try to incorporate a company, they will tell you that you must have shareholders, and those shareholders will appoint the Board of those companies.
“In today’s context, the Ministry of Petroleum Incorporated is holding in trust for the Federation, but they cannot do anything except the shareholders of record agree, which are the 200 million Nigerians and that is why the PIA (Petroleum Industry Act) provided for a leverage of the National Economic Council to have a say in this in this process.
“Therefore, the law requires that Mr President appoints the Board of these companies, on behalf of all of us.
“Whenever you dilute interests, even if it is 10 per cent interest in these companies, that right for the government to appoint vanishes automatically, it now becomes a matter for the shareholders, which includes private owners of this company.
“So this will come, not in today’s context, we are transiting, but as soon as you hear we’re ready for IPO, it’s all over, the Board will be appointed by the shareholders, which will include private equity holders.”
Kyari announced that the Initial Public Offer (IPO) of the NNPCL will be ready by the middle of next year following which its shares will be sold to interested prospective shareholders.
He said every necessary arrangement is being put in place to achieve the objective.
