As stakeholders continue to explore resolution to a myriad of problems associated with pipeline vandalism and associated crude oil stealing in the Niger Delta, Petroleum Technology Association of Nigeria (PETAN) insists that only socio-economic approach to the problem would yield the desired results.
Chairman of the association, Mr. Emeka Ene, an engineer, insists that government should deliberately create a downstream industry hub in the Niger Delta to bring illegal operations and activities under regulation and also absorb the creative skills that service illegal refining, He declared that the menace of crude oil theft in the Niger Delta has advanced beyond use of force in arresting the situation, pointing out that lucre of the illegal activity and huge investments sunk by the sponsors of the business must be displaced with genuine opportunities that can equally absorb the same level of resources in clean enterprises.
However, The UNION reports that government had in the past floated economic development programmes that were conceived to ensure provision of social and economic infrastructure as well as empowerment programmes to pacify local youths and communities that protest neglect and underdevelopment.
Apart from creation of industry funded Niger Delta Development Commission charged with development of infrastructure and amenities in the region, allocation of 13 percent of oil revenue, creation of a ministry specifically to ensure steady development of the region and creation of capacity development programme through the Amnesty Programme, government has proposed 10 percent equity allocation in the petroleum industry operations to communities and states that host the industry.
Despite the fiscal provisions and development initiatives, pipeline vandalism and crude oil theft have continued to worsen, leading to sharp rise in operations cost, steep fall in production volumes and associated revenue losses, frequent disruptions and protracted down time. According to the Managing Director of indigenous Seplat Petroleum Development Company, Mr. Austin Avuru, security issues in the upstream sector of the industry have remained persistent drain to the profits of operating companies in the country. He said the industry has been subjected to the menace of pipeline vandalism and sabotage on an ongoing basis for at least a decade, adding that the problem has become much more prevalent in the last few years.
In 2013 alone, he pointed out, all the major crude oil export pipeline systems, including the Trans-Forcados Line; Obangbiri – TemiDaba – Brass; Nembe Creek Trunkline; and the Trans-Niger Pipeline were severely vandalized. Erstwhile Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Joseph Dawha, also confirmed that the Bonny and Escravos lines that convey crude oil to the NNPC refineries were not spared either, saying that pipeline vandalism and sabotage create significant losses, for the industry and the country.
The losses, according to him, include direct and indirect costs for the provision of security, crude oil and petroleum product losses, loss of production, environmental pollution, degradation and associated remediation costs and resulting escalation of project implementation costs.
“These losses in turn put pressure on the adequacy of budgetary provision for oil and gas projects,” Mr. Avuru pointed out in a separate chat with The UNION. According to Mr. Austin Avuru, rising operations cost and falling production mean that revenue receipts from the industry would drastically reduce, leading to the prevailing accounting dispute and allegations of misappropriation.
In proffering industry solution to the problem, Chairman of PETAN, Mr. Emeka Ene, stated that deployment of security personnel and industry technology might continue to yield limited results if socio-economic alternatives are not evolved to provide cleaner sources of income to those already established in the crime. According to him, it has become an unfortunate reality that pipeline vandalism, crude oil theft and illegal refining have become well established as businesses with ancillary units that exist along its cycle.
“The point here is that there are people who feed off it; and in this study done by one of the IOCs, some of the culprits interviewed confessed that they depend on stealing crude oil through vandalism to run their families and train their children in colleges. Now the question is whether this pipeline attacks could be stopped by stopping crude oil theft without creating alternative economic structure to sustain the people,” he pointed out.
“We believe that there should be a petrochemical corridor in the Niger Delta where you are not just looking at oil as a commodity but to see how you can convert it to multiples that can create the kind of transformation we are looking for because Nigerians are ingenious. “Imagine, and I am not trying to suggest that, a situation where these hundreds of micro-refiners are clustered into industrial zones where they can do it for real. Can you imagine the kind of economic impact that we will have?
I want us to be pragmatic and realistic about the way we look at it. If the solution is to simply shoot all of them and shut them down, it will escalate the problem. “So, it is a problem that requires a little bit of thought that goes beyond looking at it as a security problem. I beg to disagree. It is not a security issue per se. It is a socio-economic issue, and unless we address it from that perspective, it will not stop.”