The Federal Government has set up a panel of experts to audit the activities of oil companies in the upstream petroleum industry in the last two years so as to ascertain the actual volume of crude oil stolen by vandals.
It said on Tuesday that the audit became necessary following allegations by some industry players about the high rate of oil theft in the sector, which had prevented Nigeria from meeting its production quota as approved by the Organisation of Petroleum Exporting Countries.
Last week, Nigeria’s billionaire businessman, Tony Elumelu, stated that the reason why the country had been unable to meet its oil production quota was not because of low investment but theft.
Elumelu’s position came as a sharp contrast to the recent comments of the Minister of State for Petroleum Resources, Chief Timipre Sylva, who had attributed Nigeria’s inability to meet its oil production quota to low investments.
Nigeria’s oil production quota as approved by OPEC is pegged at about 1.8 million barrels per day but in the last few years the country has struggled between 1.3 and 1.4 million barrels per day.
Elumelu had said, “How can we be losing over 95 per cent of oil production to thieves? Look at the Bonny Terminal that should be receiving over 200,000 barrels of crude oil daily, instead, it receives less than 3,000 barrels, leading the operator @Shell to declare force majeure.”
Also, the former Chief Executive Officer of Seplat Energy Plc, Austin Avuru, stated last week that up to 80 per cent of oil pumped in Nigeria, particularly in the East, was stolen.
Reacting to the claims on Tuesday, the Chief Executive, Nigeria Upstream Petroleum Regulatory Commission, Gbenga Komolafe, said in a statement that a panel had been set up to audit oil firms’ activities.
The statement read in part, “The NUPRC has empanelled a team of experts to carry out thorough auditing of the activities of operators in the upstream petroleum industry in the last two years.
“This is to ascertain the actual volume of crude oil stolen by vandals and saboteurs against recent allegations by some industry operators regarding the volume of crude stolen on a daily basis from their operations.
“The panel is to carry out a forensic investigation to cover the technical and commercial operations of oil companies involved in drilling and selling of crude oil.”
Komolafe said the commission was not unaware of the tragedy of oil theft, describing it as a plague on the industry.
He, however, stated that last year the NUPRC started an industry-wide initiative aimed at curbing oil theft and increasing crude production levels, a development that followed an express presidential directive.
He said the President, Major General Muhammadu Buhari (retd.), had directed that all necessary mechanisms should be activated to curb oil theft in particular and immediately end other forms of economic sabotage in the oil and gas industry.
“Action on the directive commenced immediately and is ongoing,” Komolafe stated.
He added, “The commission thus considers worrisome, the crude loss figures recently being quoted in the media by some operators, given actions taken so far on the issue.
“To ascertain the veracity of these claims, the commission has activated all the necessary mechanisms to get to the root of the matter and establish the actual volume of crude stolen as against the volumes claimed.”
Komolafe said the NUPRC had stepped up efforts to deal with the issue of oil theft in collaboration with the military and other relevant agencies.
“The commission has mandated the newly constituted panel to investigate the claims regarding the volume of theft from the various oils fields and establish the actual operational capacities of the operators; to find out if the volumes being touted are actual; and if so, what additional measures need to be put in place to effectively address the issue,” he stated.
The NUPRC boss said a stakeholders’ meeting had been called to discuss the matter with a view to jointly address the situation.
He further stated that the commission, at a meeting of its management on Monday, activated its technical and commercial mandate to demand for the statement of financial accounts of the operators and reservoir accounts of productive oil wells for the last two years.
“This will entail both sales audit and reservoir audit to establish correlations between their technical and commercial activities vis-a-vis the monitoring and evaluation records available to regulatory agencies.”