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The Nigerian Navy has called for the classification of crude oil theft as an international criminal offence similar to the case of stolen diamond in Sierra-Leone, which is referred to as blood diamond.          

The Navy has also resolved to mobilise all its arsenal to combat crude oil theft and pipeline vandalism in the country's maritime environment.

It made this declaration at a recent two-day retreat organised by the Navy for maritime stakeholders in Uyo, Akwa Ibom State.

Participants at the retreat, with the theme: "Deterring Crude Oil Theft and Pipeline Vandalism in Nigeria: A Panacea for National Economic prosperity," included the Chief of Naval Staff, Chairman of Senate Committee on Navy and her counterpart in the House of Representatives.

Others include, Minister of Defence, who was represented by the Permanent Secretary in the Ministry; the Chief of Defence Staff, who was also represented by Chief of Army Staff, and the Chief of Air staff.

The rest were, Inspector-General of Police (IG), Controller General of Nigerian Customs Service (NCS), Head of Companies, Nigerian National Petroleum Corporation (NNPC) and other maritime stakeholders.

At the end of the retreat, participants resolved that steps should be taken to establish campaign strategies to make crude oil theft an international criminal offence.               
 

In a communiqué issued at the end of the retreat, the participants stated that: "Efforts should also concentrate on the strategy of severance of links between crude oil thieves and buyers through greater collaboration and application of the instrument of diplomacy with the international community."  

The communiqué described as grossly inadequate, the resources made available for the Nigerian Navy to carry out the task of protecting the nation's territorial domain, which is about 84,000 square nautical miles.

The stakeholders therefore demanded an immediate increase in the financial allocation to the Navy for the purpose of fighting crude oil theft. They also demanded approval of a dedicated fund for the Navy to effectively police the waterways as well as acquisition of more appropriate equipment to combat crude oil theft and pipeline vandalism.  

"It is imperative and timely that a clearly defined policy of constructive engagement that encapsulates robust socio-economic imperatives that positively impact on the lives of the people in the Niger Delta area should be emplaced by the oil companies," said the communiqué.

The Nigerian National Petroleum Corporation (NNPC) has commenced the process of using Horizontal Directional Drilling (HDD) technology, to bury crude oil and petroleum products pipelines across the country.

Commenting on the new technology while on a one day working visit to ascertain the extent of work done by the Nigerian Army Engineering Corps on the clearance of the Pipeline Right of Way (ROW) at Arepo in Ogun State, the Group Managing Director of NNPC, Mr. Andrew Yakubu, said the technology, which is the latest in the industry would bury the pipelines very deep below the surface.  

He stated that an indigenous engineering firm, ENIKKOM, had been mobilised to redirect the pipeline from the reach of vandals with the modern technology.

He said the new technology would be used to bury the pipelines from the Atlas Cove depot in Lagos, through Mosimi depot in Ogun State, up to Ibadan depot in Oyo State. Yakubu stated that the Port Harcourt-Aba axis had been secured, while the Benin-Warri axis had been inaugurated.

He noted that the project has a very high cost benefit to the NNPC, saying that the Corporation was recording a loss of N600million every week before the project was started.

The NNPC boss appealed to State Governments, Local Government, Communities and other stakeholders to join hands with the NNPC to stamp out pipeline vandalism for the growth of the economy.   

Speaking on behalf of the Chief of Army Staff, Brig. Gen. Emeka Okonkwo said it wass the duty of the army to support civil authority and that the army is in Arepo to re-establish the right of way of the NNPC pipeline from Mosimi to Ibadan within 90 days, assuring all that the military engineers would deliver on its mandate on time.

The Federal Government's Amnesty Programme for repentant militants in the Niger Delta is once again under threat as a fresh crisis looms in the oil-producing region due to the growing disaffection of the ex-fighters over the programme, NOGintelligence has gathered.

The ex-fighters, who were encouraged to surrender their weapons in exchange for amnesty and training programmes, have expressed their dissatisfaction over certain aspects of the implementation of the programme.

Since the amnesty programme was introduced by the administration of the late Umaru Musa Yar'Adua in 2009, the ex-militants had on various occasions taken to the streets in protest over the shortcomings of the programme. However, the protest took a violent turn recently when hundreds of ex-militants engaged men of the Joint Task Force (JTF), code-named Operation Pulo Shield in a gun battle that lasted over an hour on the streets of Yenagoa, Bayelsa State. Several vehicles were destroyed with some looting also taking place in certain roads in the state capital.

The ex-agitators were protesting against the administration of the third phase of the amnesty programme. The protest followed a disagreement between representatives of the Office of the Coordinator of the Inter-Agency Task Force and the ex-militants over the number of training slots allocated to the ex-militants. The Inter-Agency Task Force headed by Air Vice Marshal Gbum, which has the responsibility of collecting all the weapons submitted by the ex-militants under the amnesty programme had told them that each of the militant camps would be entitled to one amnesty training slot, for every 15 guns submitted by that particular camp. The ex-militants were said to be infuriated, maintaining that there should be a training slot for every two guns submitted.  

The position of the Agency is that the militants were submitting their guns several years after the amnesty period had expired and as such could not expect the government to maintain the same conditions for the amnesty when the amnesty period was over.  

Angered by this decision, the ex-militants took their protest to the streets of Yenagoa, where they engaged the JTF in a gun battle. A spokesman from the Presidential Amnesty Office, Mr. Daniel Alabrah, condemned the violent protest by the ex-militants. 

Mr Austin Avuru, Managing Director/Chief Executive Officer of Seplat Petroleum Development Company, has called for investment stimulation in the petroleum sector, saying that the need for investment cannot be over-emphasised. Mr Avuru was speaking at the February technical meeting of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos. He said that for an emerging economy in which the oil and gas industry contributes 90 per cent of total earnings from export, the significance of the appropriate policies to drive investment could not be overstated. He noted that one obvious reason why there has not been a lot of activity especially at the upstream end of the oil and gas sector in recent years is the lack of consistent and appropriate policy.

He observed that because oil and gas are non-renewable, rent generating resources, it is expected that a balance would have to be struck between appropriate policy and investment stimulation for the level of activity to be raised.

On the one hand, he said, is the government or host country with a policy that is only interested in the bulk of benefits accruing from the economic rent in form of taxes, royalties and fees while on the other hand is the investor with the fund and technology looking at the profits and return on his investment as the only incentive for participation in the highly risky industry.

He said: "We can't but appreciate the fact that we need a right balance between policy and investment for renewed vigor and activity in the petroleum sector. All along what we have had is the situation where the appropriate policy needed to drive investment particularly at the upstream sub sector has been lacking. One thing we must understand is that more investments would only come when there is a policy to complement it," he said.   

Mr Avuru said the issue has always been treated as a zero sum game - one party's loss has always been the gain of the other. He added that this has, in effect, made negotiations for the creation of an enabling investment environment more difficult. But with a compromise of appropriate policy and stimulation of investments and activity in the industry, he said the contending needs of these two parties could be met.

Commenting on the Petroleum Industry Bill (PIB), Avuru restated the need for "a strong, independent regulator" for the Bill to work. He noted, however, that controversy has dogged the reform process in the oil and gas sector because of a misalignment of priorities and reduction of the whole PIB process to "a debate about fiscal provisions."

The Seplat boss explained that the Bill for instance did not completely address sectoral reforms and that downstream problems will get worse.    

He noted that issues bedeviling the nation's refineries were not addressed in the PIB and so uncertainties were likely to trail the Midstream (Gas processing and Distribution) Plan.

Avuru, who is a fellow of NAPE said the PIB which is "the result of an elaborate institutional reform process for the oil & gas sector, initiated in 2000 is a legislative item that is expected to define the future of the oil and gas industry in particular and the country in general."

He cited examples from successful reform efforts in the telecoms, power, aviation and maritime industries where he pointed out that reforms have worked largely due to strong regulators like "the NCC for telecoms and NERC for power as well as a focus on the private sector as a source for new investments."

The recently beleaguered boss of Capital Oil and Gas Industries has reason to smile again after the Police at the Special Fraud Unit (SFU) asked the Co-ordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala to process Capital Oil's claims for payment of outstanding subsidies.   

Capital Oil's woes began following the indictment of the company for infractions in its oil subsidy claims by a Presidential Committee headed by Managing Director/CEO, Access Bank Plc, Mr Aigboje Aig-Imoukhuede set up for the Verification and Reconciliation of fuel subsidy payments.   The Federal Government thereafter suspended the payment of Capital Oil's outstanding subsidy claims and referred the matter to the SFU for the investigation.

The police have now revealed that in the course of their investigation they did not uncover any evidence of the wrongdoings that Capital Oil was accused of by the Aig-Imoukhuede-led Committee. The investigation thus laid to rest the 15 complaints made against Capital Oil and Gas by the Presidential Committee.

The report, which was, signed by the Commissioner of Police in charge of the SFU, Mr Tunde Ogunsakin said that the Police had ascertained that the products in question were actually bought and delivered by Capital oil, contrary to widespread accusation against the firm.

The team, the report said embarked on a wide range of verification of documents tendered by marketers and all relevant agencies to check if they were actually issued by the purported agencies.

According to the report, the investigations were extended to bank transactions with a view to determining whether products were actually paid for and received. The investigation, the report added, received reports from the Nigerian Ports Authorities, the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA) and the banks involved, indicating that the products in question were bought and delivered.

According to the detectives, the abuses noted by the Subsidy Committee emanated from the porous nature of the transactions and the failure of the PPPRA failed to insulate the subsidy process from fraud.

To prevent recurrence, the report suggested that the Federal Government should prevail on NNPC, the DPR, the PPPRA and other relevant agencies involved in the process to format appropriate checklists and templates that will protect the process from fraud.

The price of OPEC basket of twelve crudes stood at $108.62 dollars a barrel on Thursday, 28 February 2013 compared with $109.69 the previous day, according to OPEC Secretariat calculations. The OPEC basket price has been on a downward trend since Monday 25 February when it stood at $111.20, sliding down to $110.10 on Tuesday 26 February, and sliding further to $109.69 on Wednesday 27 February. The price of the OPEC basket has been under pressure since its year to date peak of $114.94 on the February 13. Analysts expect the price to stabilise over the course of the year at around the $100 mark.  

Oil & Gas North Africa | 18 - 20 March 2013 | Rome - http://www.thecwcgroup.com

5th African Petroleum Congress and Exhibition (CAPE V) | 26 - 28 March 2013 | Libreville - http://www.cape-africa.com