Oil Theft: IOCs, big firms gradually divesting in downstream sector — NEITI

The Nigeria Extractive Industries Transparency Initiative (NEITI) has said the recurrent issues of oil theft and vandalism were some of the reasons responsible for the gradual divestment by International Oil Companies (IOCs) and big firms in the downstream sector.

Speaking to newsmen on Monday in Abuja, Executive Secretary of NEITI, Dr. Ogbonnaya Orji, who agreed the issue was difficult to manage, lamented that Nigeria lost 260.15mmbbls to crude theft in the last five years.

He said “This is a huge problem that is currently impacting very negatively and seriously especially on our downstream and midstream operations. For example, many IOCs and big firms are gradually divesting in the downstream sector because the problems of oil theft, vandalism, and deliberate sabotage have been quite difficult to manage.

“This is in spite of the efforts by various security agencies to secure these huge investments. Many that can afford it, because it is very capital intensive, are moving upstream. And that’s why you see revenues from PSCs outstripping returns from JV. Let me tell you from our reports in the last 5 years (2015 – 2019), Nigeria has lost about 260.15mmbbls to crude theft.

“NEITI, as part of our monitoring functions, is reviewing the situation very critically and will soon be sending our policy advice on this to the government. Our Board is already discussing the implications as well as possible short, medium and long term interventions. But for us, it is an issue of major concern,” he added.

On how NEITI can improve transparency and accountability in the management of revenue flows from the extractive sector, Dr. Orji called for widening of investigations and engagement with critical stakeholders as well as robust implementation of the Petroleum Industry Act

“We need to widen the scope of our investigations and engagement with the covered entities on process, physical and fiscal issues that underpin oil, gas and mining operations and governance value chain to enthrone honesty, competition, efficiency, cost effectiveness and value for money.

“We need to implement emerging issues with the letters and principles of EITI standards, broaden the spectrum of stakeholder’s engagement especially with companies, government, the civil society and the media with effective communication strategy. These stakeholders must understand that in transparency and accountability everyone wins.

“Robust implementation of the Petroleum Industry Act when the time comes is also key, because the PIA will create a new positive business environment for the sector if we allow consistency, trust and vision to drive the process,” he said.

(New Telegraph)