In response to the persistent challenge of pipeline vandalism and crude oil theft, the Federal Government of Nigeria is exploring alternative methods for the evacuation of crude oil. This strategy involves the utilization of barges and trucks for transporting crude from production points to storage facilities and eventually to export terminals.
The Alternative Crude Oil Evacuation Systems, as disclosed in a recent presentation by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) titled “Stability in the Nigerian Energy Sector: Integrated Strategies for Infrastructure, Transportation, and Security,” aims to mitigate production deferment, losses, and other adverse impacts resulting from pipeline disruptions.
Nigeria has been grappling with significant financial losses due to crude oil theft and pipeline vandalism, amounting to trillions of naira annually. A motion by Senator Ned Nwoko in October 2023 highlighted the staggering extent of these losses, revealing that Nigeria lost N2.3 trillion to oil theft in 2023 alone.
To address this issue, the government is promoting the adoption of Alternative Crude Oil Evacuation Systems, which involve transporting crude via trucks and barges instead of relying solely on pipelines. The NUPRC emphasizes the importance of collaboration with industry stakeholders to implement targeted initiatives and combat vandalism and oil theft effectively.
The commission underscores the benefits of the Alternative Crude Oil Evacuation Systems, particularly for new entrants into the industry during Extended Well Test and early production phases. By establishing regulatory requirements, permitting processes, and cooperation with security agencies, the NUPRC ensures the safety and security of barging and trucking operations in the upstream oil and gas sector.
According to the NUPRC, the implementation of these alternative evacuation systems has yielded positive results. Notably, the Nembe Creek Trunk Line (NCTL) saw a significant reduction in production losses due to crude theft, with over three million barrels of crude evacuated and exported through NCTL in the first quarter of 2024 alone.
Chief Ukadike Chinedu, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, commended the government’s efforts to combat oil theft. He stressed the importance of safeguarding Nigeria’s earnings from crude oil sales, emphasizing the need for continued measures to address the menace of oil theft effectively.
