Petroleum Minister says efforts to recover funds from illegal bunkering and crude oil theft have commenced.
President Goodluck Jonathan is so worried about crude oil theft in the Niger Delta and the billions of naira Nigeria loses by the trade of such crude that he is already seeking foreign assistance to resolve the menace.
This was stated by the Minister of Petroleum, Diezani Alison-Madueke, on Tuesday at the opening of the 2013 Nigeria Oil and Gas, NOG, conference and exhibition in Abuja.
Mrs. Alison-Madueke said the Federal Government has commenced efforts to recover huge oil revenues laundered abroad by companies involved in the growing incidents of illegal bunkering and crude oil theft in the Niger Delta region.
She said Mr. Jonathan is worried about the negative impact of the losses on the country’s economy, hence, he raised the issue with the British Prime Minister, David Cameron; and French President, Francois Hollande, during his recent visit to the United Kingdom and France.
The Minister said vandalism of crude supply and distribution pipeline networks has been of grave concern to the government. She said that the progress of the downstream sector is being negatively affected by activities of these criminal syndicates.
“The president is so worried that he has started reaching out to some of his counterparts in various countries where government feels some of Nigeria’s crudes are being refined in, and where these entities are laundering the funds made as a result of the illegal bunkering,” she said.
“The products from oil bunkering are not sold in ECOWAS waters, neither are the financial earnings from them laundered through West African banks. They actually end up in far-flung international fiscal institutions. That is why government is soliciting the assistance of these foreign governments to help recover them,” she added
The Group Chief Executive, Oando PLC, Wale Tinubu, said, at the event, that the industry loses an average of 50,000 barrels of crude oil every day to crude oil theft and other criminal activities that sabotage oil and gas facilities; including crude oil and petroleum products pipelines vandalism across Nigeria.
The Country Chair, Shell Companies in Nigeria, SCiN, and Managing Director, Shell Petroleum Development Company, SPDC, Mutiu Sumonu, said the estimated loss in revenue is about $6 billion (N900 billion) annually for crude oil theft alone.
Progress in oil sector
Mrs. Alison-Madueke, who reviewed the progress recorded in the last one year in the industry, said that the transformation agenda is on course, adding that the upstream sector has maintained a production capacity of 2.4 million barrels of oil per day, while gas production has increased from 6.3 billion standard cubic feet per day, SCF/D, to 7.8 billion.
She said gas flaring has been reduced to less than 11 per cent during the year from 30 per cent in 2010, adding that on-going plans through the gas industrialisation is aimed at reducing gas flares to about 2 per cent by 2017.
The minister said, in the last two years, the Nigerian Petroleum Development Company, NPDC, has grown into a medium-sized oil and gas company with its equity production rising from 50,000 barrels per day, BPD, to 140,000 BPD by last year.
To promote government’s power supply agenda, the minister said the supply of 230 million SCF/D to various power projects accounted for about by 30 per cent increase in national power supply, adding that the plan is to raise gas supply from 400 million SCF/D to about 450 million to raise power generation by about 40 per cent.
On petroleum products supply, she said the capacity from the refineries has improved significantly from 12 million litres to 21 million litres daily, adding that fuel importation is expected to reduce when the turnaround maintenance is completed.
Mrs. Alison-Madueke said commercial and technical bids have been received from the original builders of the Port Harcourt refineries for the turnaround maintenance to commence in April, while that of Warri would follow next year.