The opposition party said the government has to act fast.
The Action Congress of Nigeria, ACN, has warned that escalating crude oil theft and pipeline vandalism in the Niger Delta will exacerbate the nation’s economic woes, if the government fails to deploy a timely and decisive response.
The party said it realized the situation was far worse than estimated with two companies, Shell and Eni, had to partially suspend production, and threats of restart of violence in the restive region.
“Today, we say the situation is actually worse than we had thought, exacerbated by pipeline vandalism and crude oil theft which have reached an unsustainable level,” ACN said in a statement on Sunday. “Add this to the resurgence of attacks by the Movement for the Emancipation of the Niger Delta, MEND, and we are compelled to cry out again.”
The party said the government should act fast as oil theft and pipeline vandalism, the cost of which has been put between 6 and 12 billion US dollars per annum, have now reverted to the pre-amnesty period, when oil theft peaked at about 350,000 barrels of per day – higher than the quantity of oil produced daily by Gabon or Equatorial Guinea.
”On Feb. 24th 2013, we raised the alarm that the country’s economy was heading for the rocks, citing the skyrocketing cost of oil production, from 4 dollars per barrel in 2002 to 35 dollars per barrel presently; the massive corruption in the oil sector; the sharp fall in the discovery of new oil and gas reserves due to the low investment in the sector, and the challenge posed by alternative sources of global supply of oil and gas,” ACN said.
The ACN said the action taken in recent times by two major oil companies, Shell Petroleum Development Company, SPDC and Nigerian Agip Oil Company, NAOC, is the clearest indication yet of the seriousness of the situation.
On Saturday, the Accountant General of the federation, Jonas Otunla, said the government had to withdraw N123.3 billion from the Excess Crude Account to raise March revenues for sharing between the three tiers of government, leaving a balance of $7 billion in the excess crude account.
The account, which provides a buffer from oil price shocks, held $9 billion at the end of last year. Crude oil production fell in March due to production outages at Royal Dutch Shell’s Qua Iboe terminal and the Eni operated Brass terminal, Mr. Otunla said.
The ACN said it is particularly worrisome that the relative peace witnessed in the Niger Delta following the amnesty programme for oil militants seems to have waned, going by available statistics.
“A total of 350,000 barrels per day was lost to illegal bunkering in the Niger Delta in 2012, representing an increase of 45% over the figure for 2011 and 67% over that of 2010.
”We are particularly concerned that the Nembe Creek axis seems to have been the worst hit by the criminal act, despite being the operating base of a key former militant who has cornered a lucrative Federal Government contract to protect Nigeria’s coastline from the same bunkering activities that are now getting out of control,” the party said.