TheCable

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it has set up a panel to audit activities of operators in the upstream sector to ascertain the actual volume of oil lost to theft.

NUPRC said the audit process would cover the last two years.

In a statement on Tuesday, Gbenga Komolafe, chief executive officer (CEO), NUPRC, said the development was against recent allegations by some industry operators regarding the volume of crude stolen daily from their operations.

In January, NUPRC had said the country loses more than 115,000 barrels per day to oil theft and vandalism.

According to NUPRC, the panel is to carry out a forensic investigation to cover the technical and commercial operations of oil companies involved in the drilling and selling of crude oil. 

“The commission is not unaware of the tragedy of oil theft which has been a plague on the industry and had last year triggered an industry-wide initiative aimed at curbing it and increasing crude production levels; a development which followed an express presidential directive,” the statement reads. 

According to Komolafe, President Muhammadu Buhari had instructed that oil theft should be contained and actions were taken in response to the directive. 

“Worried by incessant acts of sabotage by criminals and some unscrupulous persons within the industry, President Muhammadu Buhari had directed that all necessary mechanisms should be activated to curb oil theft in particular and immediately end other forms of economic sabotage in the oil and gas industry,” he said.

“Action on the directive commenced immediately and is ongoing.” 

He added that the purported oil spill figures by some operators were ‘worrisome’ given the steps taken so far on the issue. 

“The Commission thus considers worrisome, the crude loss figures recently being quoted in the media by some operators, given actions taken so far on the issue.

“To ascertain the veracity of these claims, the Commission has activated all the necessary mechanisms to get to the root of the matter and establish the actual volume of crude stolen as against the volumes claimed.

“While stepping up efforts to deal with the issue of oil theft in collaboration with the military and other relevant agencies, the Commission has mandated the newly constituted panel to investigate the claims regarding the volume of theft from the various oils fields and establish the actual operational capacities of the operators; to find out if the volumes being touted are actual; and if so, what additional measures need to be put in place to effectively address the issue.”

“While a stakeholders’ meeting has been called to discuss the matter with a view to jointly address the situation, the Commission, at a meeting of its management meeting on Monday 21, activated its technical and commercial mandate to demand for the statement of financial accounts of the operators and reservoir accounts of productive oil wells for the last two years. 

“This will entail both sales audit and reservoir audit to establish correlations between their technical and commercial activities vis-a-vis the monitoring and evaluation records available to regulatory agencies.”

Oil producers in Nigeria had said the negative impact of illegal oil bunkering is eroding gains, saying oil thieves were raking in ‘petrodollars’.

Austin Avuru, former chief executive officer of Seplat Energy Plc, had said 80 percent of Nigeria’s oil production fell into the hands of illegal bunkers.