Oil Theft: The Federal Government Has Started An Investigation Into Operator Accounts To Verify Claims

Following claims of massive oil theft by operators, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has established a panel to investigate the activities of oil companies operating in the country.

Some upstream operators have recently claimed that as much as 80 percent to 95 percent of crude oil pumped is stolen from pipelines before reaching the export terminal.

Nigeria has been unable to increase its oil production volume to meet its prescribed Organization of Petroleum Exporting Countries (OPEC) quota of 1.8 million barrels per day, or even benefit from the high crude prices, due to massive oil theft reported by operators.

Engr. Gbenga Komolafe, the NUPRC’s chief executive, said in a statement yesterday that the panel will thoroughly audit the activities of upstream petroleum industry operators over the last two years.

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This is to compare recent allegations by some industry operators about the volume of crude stolen on a daily basis from their operations with the actual volume of crude stolen by vandals and saboteurs.

According to Komolafe, the panel must also determine whether the claimed volumes are accurate, and if so, what additional measures are needed to effectively address the problem.

“While a stakeholders’ meeting has been called to discuss the situation with a view to jointly addressing the situation, the Commission activated its technical and commercial mandate on Monday 21 at a meeting of its management meeting to demand the operators’ statement of financial accounts and reservoir accounts for productive oil wells for the previous two years.” This will include a sales audit as well as a reservoir audit in order to establish links between their technical and commercial activities and the monitoring and evaluation records available to regulatory agencies.”

According to him, the Commission is aware of the tragedy of oil theft, which has plagued the industry and prompted an industry-wide initiative last year aimed at curbing it and increasing crude production levels, as a result of an express presidential directive.

Concerned about the continuous acts of sabotage by criminals and some unscrupulous individuals within the industry, Komolafe said President Muhammadu Buhari had directed that all necessary mechanisms be activated to stop oil theft in particular and other forms of economic sabotage in the oil and gas industry immediately.

“Action on the directive began right away and is still ongoing. Given the actions taken thus far on the issue, the Commission finds the crude loss figures recently quoted in the media by some operators concerning.

“In order to verify the veracity of these claims, the Commission has activated all necessary mechanisms to get to the bottom of the matter and determine the actual volume of crude stolen versus the claimed volumes.”

“While stepping up efforts to combat oil theft in collaboration with the military and other relevant agencies,” he said, “the Commission has mandated the newly formed panel to investigate claims regarding the volume of theft from various oils fields and establish the actual operational capacities of the operators.”