The Federal Government’s plan to track every barrel of crude oil produced and exported out of Nigeria and their destinations should be commended. The initiative, which will be implemented by the Department of Petroleum Resources (DPR) in collaboration with the Economic and Financial Crimes Commission (EFCC), must be supported by all stakeholders in the sector. This is the first time the Federal Government will track vessels lifting crude oil from the country
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed this recently at the Nigeria International Summit in Abuja. The tracking will involve a forensic analysis that will show every vessel that comes into Nigeria on a daily basis and their movements from the crude oil environment to the downstream sector.
The collaboration with the anti-graft agency, the minister explained, would involve gathering of data every month, and tracking specific vessels and their activities. According to the minister, there had been instances where vessels headed to Port Novo ended up in the United States. But now, government can see every vessel that comes into the country and monitor its activities.
It is hoped that accurate tracking of every crude oil produced and exported out of the country will bring sanity, accountability and transparency in the petroleum sector. The country has lost enormous revenue due to sharp practices in the oil sector.
Before now, tracking the quantity of crude oil produced in the country has been a daunting task. We, therefore, urge the DPR and indeed, the Ministry of Petroleum Resources to ensure that this noble objective is not sabotaged. It is important that those entrusted with this task should carry it out with patriotic zeal.
Nigeria has lost so much revenue on account of oil theft. Statistics from the Ministry of Petroleum Resources show that Nigeria loses more than 250,000 barrels of crude oil daily to oil thieves due to government’s inability to track vessels that lift crude. The loss to oil thieves is put at over $1.6bn annually, according to 2013 figures by the Shell Petroleum Development Company (SPDC). A recent report by Shell revealed that oil theft in Nigeria rose by 50 per cent in 2017. Similarly, a report by the Nigeria Natural Resource Charter (NNRC) put the loss in revenue as a result of oil theft between 2016 and 2017 at N2.6trillion.
Considering the huge revenue losses and volatility of the price of crude oil in the international market, the tracking of vessels lifting crude from Nigeria is a welcome development. This plan should complement a similar one developed locally to detect stolen oil products in the Niger Delta region and elsewhere in the country.
The diversion of oil vessels to other destinations other than where they were meant is an economic sabotage. Those involved in this exercise including the personnel of EFCC should be specially trained. It is high time all the leakages in the upstream and downstream arms of the oil sector were plugged. As a major oil-producing country, Nigeria must embrace innovations that will curb corruption in the sector. Some oil-producing countries like the US, Russia, Saudi Arabia, Brazil, Iran, Iraq and Venezuela have done so in their countries.
It is expected that the tracking of vessels should put an end to the present lack of accountability in the lifting of crude oil from Nigeria to other countries. There must be sincerity of purpose in carrying out the exercise. At the same time, we urge the government to commence without delay the implementation of the automated fuel management and censor network that would track the movement of petroleum products across the country.
Recall that the Federal Executive Council (FEC), last year, approved N17 billion for that plan. Therefore, all relevant government agencies should collaborate to ensure the success of the new initiative to track crude oil vessels.