Stakeholders in the upstream segment of the nation’s petroleum industry under the aegis of the Nigerian Association of Petroleum Explorationists have raised the alarm over the spate of oil theft and illegal crude refining in the country, saying they are more devastating than falling oil prices.
Attributing the current low oil prices to an over-supply in the world market, the stakeholders said it was important for the Federal Government to refortify its security apparatus so that the massive leakage in the sector was curtailed in the shortest possible time.
To this end, the President, NAPE, Mr. Chikwendu Edoziem, said insecurity and pipeline vandalism were due to poor government policies and governance, stressing, “Insecurity, oil theft and illegal refining are bigger threats to the oil and gas industry in Nigeria than the declining price of oil.”
He said about N200bn had been lost to the menace of oil theft in addition to the loss of assets due to fire outbreaks, impact on the environment, loss of lives and the reputation of Nigeria as a mature oil and gas producing country.
Edoziem said Nigeria was at risk of long-term disruption to oil and gas supplies, power generation, collapse of industries and significant loss of revenue due to continued reduction in hydrocarbon exploration activities.
According to the NAPE president, fiscal instability, significant gaps and uncertainties in the oil and gas regulatory policies and laws have resulted in loss of investor confidence and preferential investment in other countries in West Africa and other regions by the International Oil Companies.
“There are concerns that value may be further eroded through attempts by the executive arm of government to open fresh debates in the National Assembly in attempts to pass the Petroleum Industry Bill into law,” he said.
Edoziem maintained that the absence of coherent policies on gas to power had significantly hindered the integration and long-term investments required to ensure the supply of gas to the power plants.
Aside this, he said pipeline vandalism, non-cost reflective tariff, lack of adequate capacity to process gas and transport it to plants were directly responsible for the low power generation in the country.
The President-elect of NAPE, Mr. Nosa Omorodion, said it was essential that the government provided an enabling environment and incentives to increase exploration opportunities, especially in high-risk frontier basins and under-explored deep high pressure/high temperature environments.