The Chief Executive of the Nigerian National Petroleum Co. Ltd. (NNPC), Mele Kyari, revealed that the company has destroyed more than 5,500 unauthorized refineries and almost 4,500 illegal pipeline connections in the past three years.
Addressing a university guest lecture in Ile-Ife, Osun, Kyari identified pipeline vandalism, crude oil theft, and rapid population growth as the primary challenges to energy security in Nigeria, as reported by the NNPC.
During his speech at the Obafemi Awolowo University, Kyari urged Nigeria to respond to these challenges by diversifying its energy sources and implementing measures for energy efficiency and conservation.
He emphasized the role of the NNPC’s Command and Control Center in detecting illegal oil facilities.
According to him,
- “The center provides live streaming of surveillance data to security forces, contributing to the detection and destruction of over 5,686 Illegal Refinery sites and the removal of 4,480 Illegal Connections from 2021 to the present”
Strategies for coping with crude oil theft
Speaking on the impact of vandalism and oil theft, Kyari suggested a strategic adjustment, emphasizing a heightened emphasis on product trucking and storage in underground tankages at NNPC filling stations across the country.
He noted the expanded retail assets of NNPC Ltd., positioning it as the largest individual downstream company in sub-Saharan Africa. This status was achieved following the acquisition of OVH retail stations and related downstream infrastructure in 2021.
Nigeria’s crude oil theft problem
Nigeria has been contending with crude oil theft in the Niger Delta, resulting in a decline in government revenues, environmental degradation, and divestment by International Oil Companies (IOCs) in onshore operations.
The National Security Adviser (NSA) to the President reported in August that the country experiences a daily loss of approximately 400,000barrels of crude oil to theft during a visit to oil-producing communities in the Niger Delta.
The NNPCL reported 157 cases of crude oil theft between December 30, 2023, and January 5, 2024, across the Niger Delta.
The exit of oil multinationals
Shell, one of Nigeria’s longstanding international oil companies, recently disclosed the sale of its onshore oil assets to a consortium named Renaissance for $1.3 billion.
Besides Shell, other oil majors such as Exxon Mobilewhich saw its planned offshore divestment of some of its assets to Seplat halted by regulatory hurdles from the NURPC.
Last year, another oil major Equinor with almost three decades of history in Nigeria’s oil and gas industry exited Nigeria citing a “strategy to optimize its international oil and gas portfolio and focus on core areas”
