Naval Chief Contests Oil Theft Statistics From Petroleum Ministry, NNPC

Nigeria's Chief of Naval Staff (CNS), Vice Admiral Awwal Gambo on Monday challenged the oil theft statistics provided by the Nigerian National Petroleum Company Limited (NNPC Ltd.) and the ministry of petroleum, adamant that it was impossible to take so much oil in a single day.

The NNPC Ltd. and the ministry have variously estimated the overall number of barrels stolen daily to be between 200,000 and 400,000 barrels, while the numbers are typically estimations.

But Gambo maintained on Monday night on Channels Television that the data might not just be from oil theft and that the government officials were mistaken in classifying losses from force majeure and shut-ins as oil theft losses.

“In as much as there is no perfect system, the phenomenon of oil theft and losses must be properly de-conflicted to proffer lasting solutions to the malaise which is currently bedevilling our economic resources.

“Here, we need to understand the differences between oil theft and of course, oil loss.

"While oil theft is siphoning oil from vandalised pipes into barges, oil losses occur when there is non-production, especially during shut-ins and force majeure as the federal government does not earn the desired revenue it should,” he argued.

 He emphasised that the volume of crude oil shut-ins from non-production is frequently added to oil theft data instead of being recognised by the authorities as oil losses and that oil losses may be the result of metering errors on the operational platforms.

“This should not be. Some sources also claim that about 20,000 to 200,000 barrels per day are being considered stolen.

"Most of these claims are definitely outrageous and they are unrealistic,” he added.

According to Gambo, a detailed examination of the data pertaining to the suspected oil theft revealed that it would be impossible to steal that amount of oil without being discovered.

“Let us even briefly analyse this. For instance, 100,000 barrels of crude oil is equivalent to 15,800,000 litres of crude, which requires a five-ton barge making 3,160 trips per day to convey this product out of the creeks.

“How do you pass the estuaries with this? So, let’s assume now you even have many barges because of the time required to carry out this product.

"That means you entirely close the navigable waters heading out to sea, through the estuaries, to embark on them or to transmit them into a mother vessel that will eventually take them out of the country.

“Of course, this is most unlikely considering the heightened presence of security agencies in the maritime environment as well as the launch of the subsisting operations by the Nigerian Navy, including, of course, the deployment of the maritime domain awareness facilities,” Gambo maintained.

Nigerians have recently accused the navy of participating in the theft of their country's crude, which has left it only able to produce 65% of its Organisation of Petroleum Exporting Countries (OPEC) quota.

Nigeria was only able to produce a pitiful 1.083 million barrels per day, despite receiving a daily allocation of 1.8 million barrels in July.

"The value of the naira has decreased to a level that is likely an all-time low of over N700 as a result, significantly affecting the Nigerian economy."

The CNS, however, said that during the past four weeks, a number of vessels had been discovered by Navy facilities trying to load crude oil and liquefied natural gas into offshore terminals without the required paperwork or authorisation from the NNPC Ltd. or other relevant authorities.

He claims that after a vessel of this type has been apprehended, the Navy is sent updated documentation regarding the vessel in order to accomplish a release when they are properly programmed to carry liquids within Nigeria's maritime territory.

Gambo cited a number of incidents that have happened in the previous four to five weeks, including the detention of the LNG supertanker MT Arabia, which arrived in the nation on July 12th to load liquefied natural gas without the necessary documentation.

He continued by saying that MT Trinity Arrow, which was also detained for entering without the proper authorization, was only permitted to carry LNG on July 12 after having its paperwork amended.

The most recent, according to him, is the supertanker MT HEROIC, which is 336 metres long and 60 metres broad.

“Imagine the size of three football fields and 1/3 more. It has the capacity of carrying 3 million barrels,” he reiterated.

Gambo emphasised that negotiations were ongoing to facilitate the asset's transfer so that a thorough examination into its acts and the reasons for its accusations against the Nigerian Navy as pirates could be conducted.