Technical Consultant to the Group President/Chief Executive Officer of Dangote Industries Limited for Refinery and Petrochemical Projects and a former General Manager, Corporate Planning and Business Development, Nigerian National Petroleum Corporations (NNPC), Mr Babajide Soyode, bears his mind on the rot in the oil sector and why the magnitude of corruption being perpetrated continues unchecked. Our reporter, JAMIU AFOLAYAN monitored the interview on Arise Television

Why have we not been able to crack this connivance between probably government officials, international thieves, and everybody in this ecosystem?
You said it now, including everybody in the system, that’s why we have not been able to. I think we have been diverting our attention by saying that the artisanal refiners are the ones responsible but that’s most unlikely because if artisanal refineries were responsible and they were stealing several hundred thousand of crude a day, all the people in the Niger Delta would have died. Now it’s just a small thing but in any case, we now see first-hand who part of the problem or the game is. The Federal Government of Nigeria has always been claiming that it would reveal the identity of those behind oil theft in Nigeria. $40m worth of crude oil daily is being illegally diverted and Government seems to be handicapped. But Government Ekpomupolo, popularly known as Tompolo has also been quoted as saying that indeed Government knows those behind crude oil theft, If everybody is involved so who is the government going to name as Garba Shehu alleges?

Do you think that government can summon the will to name, identify and punish those behind crude oil theft or it’s just talking to please the public?

I don’t think government can summon the will, this thing has been on for many years. Let me tell you the people who must have been involved or should have known in this case, first of all before a Very Large Crude Carriers (VLCC), the largest shipping can come into the country; Somebody must have registered it at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) or Nigerian Upstream Petroleum Regulatory Commission (NUPRC), who is the owner of the field. The owner of the field must have had somebody in charge of that field, the customs should have known, the navy should have known, and just a few people but we didn’t know until the ship got to Equatorial Guinea before we raised alarm and were able to arrest it. It is also a shame that our navy could not stop a ship that is coming into our water to steal and had to be Equatorial Guinea. I don’t think the Government can summon the will because if they wanted to they’d have stopped it a long time ago.

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In the past, a name has always popped up, no pun intended. The name is Government Ekpomupolo, popularly known as Tompolo. Over the weekend, there was a video circulating that a surveillance contract had been given to him again like it was given to him at some point. Is this the way to go giving Tompolo a contract for surveillance of pipelines, is this is the way to go?

No, I don’t think so. It is like asking the kingpin of the called kidnappers to be monitoring kidnappers. We have an army, it can be better to give the community chiefs to monitor. We’ve been in the oil industry since 1954. Why now we are going to ask just one man and his gang, then what happened if the next administration fails to renew the contract, what happened? They will go into stealing themselves. I don’t know the man but I think for a nation of Nigeria to be having one man, you leave the Navy, you leave the Army, and you leave the Nigerian Air Force. Gentlemen this is the age of drones, we can use drones. It’s much cheaper and more effective. The point is that too many people are involved in this thing and I don’t care. If Tompolo can do it fine, maybe, but what is the contract, how is it going to cut down the stealing, how much stealing is being done what will it reduce to, in how much time, how long is the contract but to me, it’s a disgrace to us in the Oil and Gas Industry in Nigeria and to Nigeria in general.

Why is it so easy for people to steal Nigeria’s crude oil?
This has something to do with refineries, let me give you some figures. Now we got about three million barrel tankers, multiply that by $100/barrel which is about $300m per tanker. Now you tell me if our people supposed to be in charge are inclined to corruption, how many of them can’t you bribe with $300m and that is just one tanker? Now with all the crude theft they claimed, they’ve been stealing, at least they may have about four to six tankers in operation at any time because if you listen to our oil company, they said they have been losing a large quantity of oil. So, we will say, roughly between 400 to 600 thousand barrels a day, how many tankers would that be? Now you have Lloyd’s register, you can monitor ships on our coast at 24 hours from the regulatory office, from the office of NAPIMS you can monitor. Not a lot of tankers are involved, they don’t have to be. It is just that for some reason they choose not or they are silenced, I don’t know.

We need to understand this, is it that you’re saying the commissions, for instance, don’t even have that programme of Lloyd’s register, so, they can even know how many ships are on our waters and what they are doing, what they are taking out in the first place, and is it that we don’t even know all of that?

I don’t think they do but, I stand to be corrected

You don’t think they know about Lloyd’s register?
Look what has happened. They should have it now, the media should insist and let us all know when they have it. They should have it now. The National Petroleum Investment Management Services (NAPIMS) which is responsible for monitoring the production of all the joint ventures should also have it, at least we would know who is coming in and who is coming out

But if crude oil theft is as lucrative as it is said to be, and given Nigeria’s penchant for primitive accumulation, corruption, and collusion; do you think that this problem can be solved anytime soon?

I think so.

How?
First of all, if you see this ship that has been arrested, you will make an example of it. And you will strictly inform our navy that any ship that trespasses without the approval of our regulated authority should be disabled and they know how to disable the ship, any. And anybody that is involved, in the first place in the oil industry we have what they call PACT unit, its stands for Lease Automatic Custody Transfer. Production Automatic Custody Transfer (PACT) in other words, when you have crude that you have produced, you want to transfer it. You have to go through the LACT unit or PACT unit. It is a very precise measurement instrument and is monitored or calibrated by the Regulatory Authority, the sender, and the receiver. So a man who says he’s losing 300,000 barrels a month, 10,000 a day. By the time he had lost two or three days, he should have known and discontinued production and if you know, you shut up. People would ask what is wrong, this problem can be solved. It is not only in Nigeria that they are producing oil.

So, this PACT unit you talked about, to my understanding and correct me if I’m wrong. It sort of looks like the Kimberley process with diamonds, where you can pretty much track what is going on, so is it that we’re not even aware of this?

Because the last time we remembered it took Mr Tony Elumelu that had to cry out and said we’re not even getting anything from our wealth. So, is it that we’re just oblivious or it’s like a top to bottom corruption we’re doing and we’re trying to act brand new? I think it’s the latter, it is the latter, top to bottom. I just gave you a sum of $300m in one instance, and you have a society that is prone to corruption. In this day when the Foreign Exchange (FOREX) is so scarce and I’m talking, this is just one tanker. There may be two or three or four tankers a month, so, who can’t they bribe? It is just too much money. I think, first of all, we’ll start at the top where is our National Assembly? They must bear responsibility for this, where is the Petroleum Committee of the Assembly? They should be held responsible for whatever is happening in the oil sector. It’s obvious that what we’re dealing with is organised crime and that’s why I was asking whether there is a way forward out of this, the Buhari Administration, the lawmakers you talked about, the Committees you mentioned, everybody makes the right noises about the need to check crude oil theft but nobody has been able to move the needle in any positive direction.

By next year, we’ll have a new government in place. What in specific terms will you be advising that new government that will come next year to do to check this malady?
You’ve heard of mission impossible in the United States. That’s where the FBI organised to tackle the mafia in the 20s and the 30s and so on in the United States. Unfortunately, we may have to organize something like that, an armed division, a very well-trained division of the Police and Army whatever security to tackle this thing. Talking will not do it but first and foremost, the government should develop Niger Delta in a meaningful way. All these commissions and whatsoever they are doing is just a waste of time. They have not done anything because if the people of Niger Delta are enjoying if they are benefiting. Because they are dying you may not know it now, 10, 15, or 20 years from now you will see what is going to happen because you must develop the region otherwise turn their oil over to them. Let those who have gold, mind your gold. If you have silver mind your silver, If you have cocoa mind your cocoa, and let’s just stay for all to share offshore oil which is plenty of it for the Federal Government but what I would say to the government coming in next year, must organize firmly to stop this thing. It’s not going to be easy but it can be done.

Talking about Crude oil theft, NNPC has been commercialised, yes, but these are part of some of the things that they’re supposed to have in revenue that’s been stolen through crude oil theft. And why is it that nobody’s saying anything about the NNPC? And secondly, I see you have stellar records I should say, of the Warri, Kaduna refineries and all of that, why can’t our refineries produce oil?

Our refineries can work, there’s nothing wrong with them. I don’t want to go into that, but quote me, our refineries can work. Nothing wrong with the whole refinery. Our refineries are relatively new. There are refineries built in 1920 in Texas, they are still working. What we do with all refineries in the industry, is upgrade them and update them and that is what Turn Around Maintenance (TAM), is supposed to be doing. Now I don’t know the exact programme… what they are doing now with NNPC, I hope they are doing some upgrading but in any case, I tell you, our refineries can work but if the people in government do not want the refinery to work, they will not work. Who got the refinery to this stage, it’s not the NNPC. If you award the Turn Around Maintenance (TAM) contract to a political person that doesn’t know, a fishmonger, a trader; what will happen? In any case, our refineries can work if they want it to work and it’s not NNPC that will make it work unless they force NNPC to do it.

Earlier this month, the NNPC had an event at which the organization launched what they called an app that can be used to track the movement of vessels, and that app is also supposed to enable community members to report Crude Oil theft, do you see the possibility of community members in these oil bearing communities rushing to NNPC or a government agency to report crude oil theft. Do you see that kind of possibility?

Community involvement is the key. After all, Tompolo that you have just commissioned, he’s going to use community members. His team will be taken from the community. They don’t have to come, we have regional offices of the regulatory commission, they can report there, they have a referral office of security if you take good care of the community and it does not mean you should just take care of one kingpin. With all the money we are producing from oil, go and look at the Niger Delta, is it fair? Let me give you an example, you know …Petrochemical. At one-time people were stealing from it, when the new owners got the community involved, not one drop of petrochemical has been stolen for almost 10 years or more now because the community members say if you dare tap into this plant, you will not live a life. So community members must be involved.

The NNPC was recently commercialised and most of their commercial assets or what is supposed to bring revenue to them that is being filtered away in crude oil thefts. What are they doing about this, what should they be doing about this?

No, let’s get something cleared most of the oil production NNPC has a percentage, 60 per cent but they have operators who are 100 per cent responsible. The Joint Venture Partners are the operators, they are fully responsible, they are getting paid for it and I mean getting paid operating fee per barrel, so you don’t blame NNPC for that, you cannot blame them. This one we have is being operated by Total, they are 100 per cent responsible. NNPC cannot even go there without telling Total. That’s the arrangement all over the world, you have an operator, you are a partner, a silent partner you don’t go and disturb him. He’s responsible for everything from exploration, to production, to security, everything.

So, why can’t their operation guarantee us security, why is it beyond them?
That is the thing that is what is amazing to me. You know what I’ve told you, we’ve got somebody now, Total to explain what is their ship doing in the field, the ship should not be in the field, it should be at a terminal. What was the ship doing in the field, it’s a very simple question. Now, I would hold NNPC responsible and the Regulatory Authority if they don’t hold Total responsible to answer that question. That ship does not belong to the sea, it must go to a terminal. It must go to a terminal.

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Well, Nigeria cannot meet its OPEC crude oil production quota, and we even cannot provide enough electricity, the same argument that is put up is either crude oil theft or pipeline vandalism either concerning gas or a finished product, Do you think the crude oil theft crisis and pipeline vandalism both explain all the problems we have in the oil and gas sector? The expectation is that perhaps when the Dangote refinery comes on stream, all these problems will be mitigated, is that argument correct?

No, you cannot hold Dangote responsible for what is happening in the production field. It’s silly in fact, Dangote will be getting his oil from the field or several fields so you cannot hold Dangote responsible. Dangote refinery is here in Lekki. The oil operator and the Joint Venture Partners are responsible, NNPC is responsible through NAPIMS, security agents are responsible and this is just a relatively small part of the country, it is not too much.

What should Saudi Arabia do, they have many times the acreage we have in Nigeria. We have to adopt this new technology, it is not beyond that, but if you have corrupt people in charge it does not matter especially if everybody involved is corrupt. There’s absolutely nothing you can do and please don’t hold Dangote responsible, it has nothing to do with him. He will buy crude, refine and sell it to the public. He’s not going beyond the Dangote Refinery, there’s nothing he can do unless he claims he can do it but I don’t think he has claimed. So, it goes back to this talk about corruption, then how do we hold people accountable for this? The other day we saw some NSCDC officials caught in river states for crude oil theft, how do we hold people accountable when the entire ecosystem is corrupt? The grace of God (grace of God). Yes the grace of God and then you need to choose a leader who will lead by example. After all, we used to have one in 1984-85. What happened, in any case, it has to be done by Nigeria, are we going to bring the British back today for us or the Americans? Nigerians can do it. We will have to use strong arms, and we may have to eliminate some people as I said before, in this particular oil industry you need to set up armed security groups and you will incentivize them properly but before you do it, please, take care of the community. When you have our National Assembly making so much money and they let the injustice in the Niger Delta go on, why do you expect the community to cooperate with the authorities? There must be justice and equity, it is fundamental and you the media must take a front role in this fight.

I’d like to ask you what you think of the transition of NNPC to NNPC Limited, a Limited Liability company.

We tried it in 1988, it can work. It’s been done all over the world it can work but who owns NNPC Limited, who are the shareholders, just answer that question then you’ll know whether it will work or not.

Cut-in: Ministry of Finance Incorporated

And who owns the Ministry or who controls the Ministry of Finance Incorporated?

Cut-in: I guess that would be Nigerians

No, it’s not Nigerians, it’s the Federal Government. The Federal Government of Nigeria used to also control NNPC directly. It can work, it’s not that it cannot work. We have very good people in Nigeria, I don’t care what people will say, we can get good people to be in charge of NNPC Limited.