Nigeria lost 22.6 million barrels of oil to petroleum pipeline vandalism and crude oil theft in the first half of this year, the National Economic Council (NEC) heard on Thursday.
The value was estimated at $1.35 billion (about N481.95 billion), according to Edo State Governor Godwin Obaseki, who briefed State House reporters at the end of the 97th NEC meeting in Abuja. He was with Governors Dave Umahi (Ebonyi) and Inuwa Yahaya (Gombe).
Thursday’s NEC meeting was chaired by Vice President Yemi Osinbajo.
If the loss is not checked, Obaseki said Nigeria would lose $2.7 billion by the end of the year. And to check the trend, he said his committee recommended to the Council the need to restructure the maintenance and ownership of pipelines across the country.
The recommendations, he said, also include the prosecution of criminals and training of special judges to handle the cases.
He said the committee also recommended that the Nigerian National Petroleum Corporation (NNPC) should endeavour to engage the National Intelligence Agency (NIA) to track the countries benefiting from the stolen crude oil.
According to him, the Council resolved that the recommendations should be forwarded to President Muhammadu Buhari, who is the Minister of Petroleum.
Obaseki said: “The 13-member ad-Hoc Committee, which is chaired by me, submitted its report to the NEC today. The committee was constituted to address the impact of vandalism, oil theft, illegal bunkering on oil production. It was also to check the effectiveness of the activities of the joint task force and other security agencies in curbing the menace of oil theft; and also to consider the setting up of a special court to prosecute offenders amongst others.
“The terms of reference of the ad hoc committee include restoring and sustaining the four major trunk pipelines, which moves crude oil to the terminals, to access the challenges and draw up a road map to guide further actions towards finding a lasting solution towards the problem.
“The committee could co-opt individuals to facilitate its work and we are supposed to update council regularly.”
On the findings of the committee, he said: “The committee discovered that there were huge losses. In fact, the NNPC reported to the committee that the 22.6 million barrels of crude oil valued at approximately $1.35 billion was lost during the first half of this year.
“And if this situation is not contained by the end of the year, we would have lost in excess of $2.7 billion.
“The losses that were recorded in the first half of the year were broken down as follows: The Nembe creek trunk-line lost 9.2 million barrel, the Trans-Niger pipeline lost 8.6 million barrel, the Trans-Focadoes Pipeline lost 3.9 million barrel, Trans-Escravos pipe we lost 877,000 barrel.”
He said the committee decried the prevailing governance structure of the pipeline in which no one is held accountable whenever breaches and losses occur.
“The slow and inadequate prosecution of thieves, despite numerous arrests and seizures”, he noted, “have continued to encourage the menace.”
He also said that the absence of petroleum products’ filling stations in most of the oil-producing communities around the Niger Delta have made them resort to illegal bunkering and illegal refineries.
Obaseki also said that huge internal and external market of stolen products exist across the west coast of Africa and the sub-region.
- He added: “Therefore, the ad-hoc committee made the following recommendations:
- That there is need to restructure the maintenance and ownership of oil pipelines as a way of tackling the perpetrators of crude and other products.
- That we should have a legal framework that will ensure that criminals are duly prosecuted, imprisoned and their assets confiscated.
- That there should be special courts to try offenders and also have a special legal task force to coordinate the prosecution of arrested offenders as well as train special judges to handle cases of oil theft.
- That NNPC should be encouraged to engage with the National Intelligence agency (NIA) to identify the markets for stolen petroleum products across the continent.
- That the governors of the oil-producing states should set up actions to develop the communities that are most prone and through which these pipelines run with their 13 per cent derivation allocation as well as implement programmes that will be impactful and make life easy for the people.
“It noted that the NDDC (Niger Delta Development Commission), which has the mandate to undertake development in the region, should be restructured to perform its role better.
“That they should emphasis creating employment opportunities for youths in the region.
“That the proposed funding arrangement to be jointly funded by the federal, states and the oil companies to ensure the communities through which these pipeline traverse get some benefits to encourage them to protect these lines.”
On resolutions, he said: “Therefore, council resolved as follows: That recommendations should be presented to the president, who is also the minister of petroleum, for the final decision for implementation.
“The chairman of council also asked the NNPC to make a presentation to council on the state of PMS and other products which are smuggled across the borders.”
Umahi, who is chair of the committee on the herders/farmers crisis, said that his panel proposed a N100 billion budget for the National Livestock Transformation Plan (NLTP) in the report it submitted to the Council.
While participation by states is voluntary, Umahi said the Federal Government would contribute 80 per cent of the budget and interested states would provide 20 of the budget, the land and other logistics.
He said: “As the chairman sub-committee on herders/farmers crisis, NEC was today (yesterday) briefed. The committee presented a National Livestock Transformation Plan (NLTP) 2019-2028 today.
“The plan is not targeted only on cows, but a holistic strategy to address animal husbandry. The plan has six pillars through which it aims to transform the livestock production system in Nigeria along market oriented value chain while ensuring an atmosphere of peace and justice.
“The six key pillars include: economic development (investment), conflict resolution, justice and peace, humanitarian relief and early recovery (that is to IDPs), human capital development and cross-cutting issues such as gender, youth, research and information and strategic communication.”
The committee, he said, proposed the implementation of guidelines to guide the Federal Government and states.
“N100 billion budget was proposed to support the project. Federal Government is to contribute 80 percent in grant to support the project while states will contribute land, project implementation structure, personnel and 20 percent cost of the project.
“Council resolved today that there is need to look at the trans-human West African protocol. You cannot allow such movement of cattle without registration and monitoring.
“Council emphasised the need to continue to establish the National Livestock Transformation Plan (NLTP), a creation of NEC and state governors and, of course, minister of agriculture is also a member of this committee and minister of interior is also a member, and it is entirely distinct from RUGA.
“NEC adopted the National Livestock Transformation Plan (NLTP) January 18, 2019 and it is a creation of national economic council of course in liaison with the federal government.
“States will determine whether or not to participate. Federal government did not impose this plan, participation remains voluntary. What we are talking about is National Livestock Transformation Plan (NLTP) which is a product of NEC in liaison with federal government.”
Ruling out foreigners from benefiting from the plan, he said: “Our budget did not include non-Nigerians and so, I am not aware if the governor said so and It’s possible you did not hear the governor very well, but there is no way we can make our programme which the Federal Government will put eighty percent and the States will put twenty percent and then we are now going to accommodate non Nigerians, it’s not part of the programme.
“And of course, what we have said here is that they would have to review our ECOWAS protocol and see what we can do about that.
“Of fact, we commend the Federal Government for any reason they closed the borders, and this is the kind of thing we are looking for. While we are trying to reposition this programme, there will be temporary restrain for such. NEC did not make any budget to accommodate non Nigerians. This is very important.”
Inuwa said that governors requested for clarification from the Council chair (vice president), on the relationship between NEC and the newly formed Economic Advisory Council (NEC).
According to him, Prof Osinbajo explained that those councils are advisory for the benefit of Mr. President and that while NEC is established by the constitution, they are to complement one another.
“He (Osinbajo) added that NEC could be briefed regularly on the activities of the Economic Advisory Council with the permission of Mr. President”, Inuwa said.
The Secretary to the Presidential Enabling Business Environment Council (PEBEC), Dr Jumoke Oduwole, according to Gombe State Governor, gave an update on the enabling business environment and informed the council that the current reforms in African countries as contained in the African Development Bank Economic Outlook report released in January 2019 and in the World Bank Ease of Doing Business 2019.
He said Nigeria is ranked 146 with micro, small and medium enterprises making up to 90 percent of businesses in Nigeria.
“And that the economic recovery and growth plan 2017-2020, which has three broad objectives which includes restoring growth, investing in people and building a competitive economy, has positioned Nigeria as a force in building a competitive economy.
“The committee was mandated to take Nigeria to top 100 in the 2020 World Bank ease of doing business index.
“It is also mandated to achieve the required political buy-ins across all arms and levels of government. PEBEC in the past three years achieved the following:
- Moved up 24 places in the World Bank ease of doing business ranking
- 32 states, led by Kaduna, Enugu, Abia, Lagos and Anambra have improved in their ease of doing business environment.
- Independent survey adjudged Nigeria as impactful in terms of procedures and time of doing businesses.”