Nigerian National Petroleum Co. Ltd. (NNPC) has dismantled dozens of unauthorized oil pipelines and refineries in different parts of Nigeria during a year-end week-long operation, the national oil and gas company said.
Authorities uncovered 42 refineries and 14 illegal pipelines operating in the Niger Delta between December 23 and 29, NNPC said in a video report Tuesday. One illegal oil storage site was also discovered.
Ten incidences of pipeline vandalism, eight cases of infraction of vessel automatic identification system and four oil spills were also recorded during the operation, under NNPC’s campaign to stop oil theft.
Eighteen persons have been arrested on suspicion of involvement in the incidents, which affected several companies not only NNPC. Also among the victims were Maton Engineering Nigeria Ltd., Pipeline Infrastructure Nigeria Ltd. and Shell Petroleum Development Co., according to the report released on social media platform X, formerly Twitter.
“For NNPC Ltd. there is no backing down on the war on crude oil theft until the menace is eradicated for good”, NNPC said in the report.
The lingering problem of oil theft comes amid a shortage of refinery feedstock in the West African country.
Last month the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it had met with the Nigerian Midstream Petroleum Regulatory Authority to seek stronger action to ensure domestic crude supply. The meeting “came on the heels of the prevailing shortage of feedstocks to the modular refineries operating within the shores of the country and formed the basis a meeting between the regulators”, the NUPRC said in a press release.
Last November the government inaugurated a special committee to combat oil theft.
In the country’s annual oil and gas fair last May, the oil and gas regulatory body Nigerian Content Development and Monitoring Board (NCDMB) urged the government to address “wanton crude oil theft in the Niger Delta” to “enable the production of hydrocarbons at reasonable costs and profitability”, stated a press statement from the NCDMB.
“[M]ost indigenous operators were unable to evacuate their crude oil through pipelines for over one year and are now forced to explore alternative options at high costs”, the NCDMB said then.
Equinor ASA announced November it was selling its stake in the Niger Delta’s Agbami oil field as it exits the country. Norway’s majority state-owned Equinor holds a 20.21 percent stake in Agbami, which is operated by Chevron Corp. with a 67.3 percent interest. Prime 127 Nigeria Ltd. holds the remaining 12.49 percent. The world’s biggest oil discovery in 1998, Agbami holds an estimated 900 million barrels of recoverable volumes, according to information from Chevron.
According to the latest report on oil theft by government agency the Nigeria Extractive Industries Transparency Initiative, the country lost over 505 million barrels of crude and 4.2 billion liters of petroleum products, or $40.06 billion and $1.84 billion respectively, between 2009 and 2018. “Cumulatively, total crude and product losses for the period amount to $41.9 billion. This is the size of Nigeria’s entire foreign reserves”, it said in the report published November 2019.
Oil has been among the top five sectors contributing to Nigeria’s economy. In the latest gross domestic product data by the National Bureau of Statistics, petroleum and natural gas comprised 5.48 percent of the nation’s economy in the third quarter of 2023, making this sector the fifth-largest contributor to the economy behind crop production, trade, telecommunication and information, and real estate.