Senate has failed to indict any individual or organisations involved in the crude oil theft in the country, saying that Nigeria as a country  has lost over $2 billion to oil theft in eight months, between January  and August 2022 which contributed to lost in  revenue that  would have supported Nigeria’s fiscal deficits and budget implementation. The Senate has also said that between April and September 2022, security interventions has led to the seizure and arrest of 11 crude oil Vessels, 30 speed boats, 179 wooden boats, 37 trucks as well as 122 arrested suspects of crude oil theft. According to the Senate, 959 metal tanks, 737 Ovens, 452 dugout Pits, 342 Reservoirs, and 355 Cooking Pots were destroyed, just as  207 pumping machines, 12 sophisticated Welding Machines, 6 power Generators and 2 Automatic Filling Machines were recovered. 

Giving an overview of the Oil sector, the Senate said, “The country’s average technically allowable rate of oil and condensate production stands at: Oil -1,907,493 (bopd); Condensates -324,624 (bopd). TOTAL PRODUCTION: 2,232,117 (bopd). The country’s OPEC quota for August/September 2022 is 1,826,000 (bopd) crude only. Average daily Production for crude stands at: Oil – 985,633 (bopd); Condensate – 246,597 (bopd). TOTAL CRUDE – 1,232,430 (bopd). Average daily Production for Gas  stands at: Associated Gas (AG) – 4.352 (bscf/d) – (61.9%) Non Associated Gas (NAG)  –  2.79 (bscf/d) – (38.1 %)  TOTAL GAS – 7.31(Bscf/d) The production by terrain are as follows: Deep Offshore- 37%, Shallow offshore – 29%, Swamp-12%,  Land -21%. As could be seen and established, only 66% of the country’s oil production can be effectively guaranteed while 33% is affected by oil theft and loss in production due to the third party easy access on land terrain.”

Resolutions of the Senate were sequel to the presentation and adoption of the Report of Ad- hoc Committee to investigate Oil Lifting, Theft and the Impact on Petroleum Production and Oil Revenues by Senator Albert Bassey Akpan. The Senate committee report said “the country has lost over $2billion to oil theft between January  and August 2022, which lost revenue ordinarily would have supported the country; fiscal deficits and budget implementation. Between April and September 2022, security interventions has led to the seizure and arrest of 11 crude oil Vessels, 30 speed boats, 179 wooden boats, 37 trucks as well as 122 arrested suspects of crude oil theft.  Also 959 metal tanks, 737 Ovens, 452 dugout Pits, 342 Reservoirs, and 355 Cooking Pots were destroyed. Also 207 pumping machines, 12 sophisticated Welding Machines, 6 power Generators and 2 Automatic Filling Machines were recovered. NNPC in collaboration with both industry regulators, other partners and government security agencies has deployed security architecture to help restore / guarantee production in eastern, central and western production corridors.”

The Senate has said that subsequently, directives by the Minister of Petroleum should be jettisoned against the backdrop that with the Petroleum Industry Act, PIA, that takes precedence over administrative directives which are inconsistent with its provisions. The Senate has asked the Nigerian Upstream Petroleum Regulatory Commission, NUPRC should immediately  should resume full regulatory oversight of all existing crude oil terminals in Nigeria including integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent. In the adopted 16- point recommendations, the Senate said that the crude oil theft and pipeline vandalism are limited to onshore and swamp operators due to their peculiar vulnerabilities, adding that there were plethora of Government entities or representatives present at Export Terminals with duplication of roles and responsibilities leading to conflicting figures being churned out. The government/other agencies include: CUSTOMS, IMMIGRATION, NDLEA, INCHCAPE, PORT HEALTH, TROBEL, ARLINGTON NIG. LTD., INSPECTORATE, SIFAX, among others.

The Senate called for an immediate streamlining of the  agencies present at the terminals in line with the coming on board of  PIA delineated upstream and midstream/downstream statutory functions while NUPRC should strengthen deployment of digital accounting procedures (such as advance cargo declaration, digital integration of LACT units) at all crude oil terminals for transparent hydrocarbon accounting. The adopted recommendations read, “The Hon. Minister’s letter dated 7^th July, 2022 (as attached) and the directives therein are in conflict with the extant provisions of the PIA, particularly sections 7(ee), 8(d), 32(ii) and 174(a) and should therefore be jettisoned as the law (PIA) takes precedence over administrative directives which are inconsistent with its provisions; The NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria including integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent; As intended in the PIA, the NMDPRA statutorily should concentrate fully on regulating the midstream and downstream activities i.e. from refineries, mid and downstream gas infrastructure, supply, storage and distribution of refined petroleum products, petrochemicals, virtual pipelines and retailing facilities,  in line with the provisions of the PIA, including future stand-alone crude oil and natural gas export terminals;

“There should be an immediate streamlining of the  agencies present at the terminals in line with the relevance of their PIA delineated upstream and midstream/downstream statutory functions while NUPRC should strengthen deployment of digital accounting procedures (such as advance cargo declaration, digital integration of LACT units) at all crude oil terminals for transparent hydrocarbon accounting. NUPRC should fast track the upgrade of the National Production Monitoring Systems (NPMS) to enable Real Time monitoring of Flow station and Terminal activities. NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for detection and mitigation of illegal movement of  vessels , to ensure adequate revenue generation and optimal crude oil accounting, thus  enhancing  revenue generation for the federation. NUPRC must ensure that all vessels coming into the Nigerian waters for the purpose of crude oil liftings adhere strictly with  Advance Cargo Declaration (ACD) in line with international best practices in collaboration with the Nigerian Navy and other relevant statutory agencies in line with presidential approval.

“The Ministry of transport should immediately withdraw its interference with Advance Cargo Declaration on wet petroleum cargoes in alignment with  the statutory mandates of the NUPRC under the PIA. NUPRC should summarily conclude engineering audits of existing LACT Units and Flow meters for efficient regulation and monitoring for integrity assurance and standardisation of crude oil measurement systems in the Nigerian upstream oil and gas operations. The Bureau of Public Procurement should expedite all processes of procurement for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC to ensure immediate deployment of an online realtime monitoring system by the Commission across all upstream oil and gas production platforms to ensure accurate measure of production volume by the producers. Curtailing crude oil theft should be a collective responsibility thereby well-meaning members of the public must be encouraged to report illegal activities and transactions in stolen crude oil that may come to their knowledge from any part of the world. Nigeria should seek international financial collaboration to check illegal Letters of Credit used to fund the sale and purchase of Nigeria stolen crude,  as such illegal crude sales can only be transacted  through the world financial system.

“The Senate Committee on Petroleum Resources (Upstream) must ensure effective and periodic oversights of the upstream petroleum sector. The Clerk of the Senate should communicate the resolutions herein to the Honourable Minister of Petroleum Resources, Honourable Minister of State for Petroleum Resources, Nigerian Upstream Petroleum Regulatory Commission, Nigeria Midstream and Downstream Petroleum Regulatory Authority, Nigerian National Petroleum Company Limited, international and indigenous operating oil companies, and other relevant agencies for immediate adoption and implementation.”