The Federal Government has adopted a virtual means of evacuation of crude oil that involves the utilisation of barges and trucks for the transportation of crude from the point of production to injection/storage points for eventual transportation to export terminals.
It said the Alternative Crude Oil Evacuation Systems was implemented to avoid production deferment, losses and other undesirable consequences as a result of pipeline disruption and outages.
This is contained in a new presentation by the Nigerian Upstream Petroleum Regulatory Commission on “Stability in the Nigerian Energy Sector: Integrated Strategies for Infrastructure, Transportation and Security,” obtained by our correspondent in Abuja on Sunday.
Nigeria loses trillions of naira to crude oil theft and pipeline vandalism annually, a development that made the government consider virtual means of transporting the commodity.
In October 2023, it was reported that the Senate ordered a comprehensive probe into the activities of security forces and organised groups employing sophisticated techniques to steal crude oil in the country.
The report stated that the decision was prompted by a motion put forth by Senator Ned Nwoko (PDP, Delta North), who reeled out data on what Nigeria loses to pipeline vandalism and oil bunkering.
Nwoko had pointed out that Nigeria lost N2.3tn to oil theft in 2023 alone.
“In March 2023, Nigeria incurred a substantial loss of 65.7 million barrels of crude oil, valued at $83 per barrel, translating to a staggering revenue loss of N2.3tn as a result of oil theft,” the senator stated.
To tackle this, the NUPRC said the government had to promote the Alternative Crude Oil Evacuation Systems by transporting the commodity through trucks and barges instead of pumping them through pipelines.
It stated that through collaboration with industry stakeholders, the Nigerian Upstream Petroleum Regulatory Commission had sustained its commitment in implementing targeted initiatives and various measures to combat vandalism and crude oil theft.
It said, “Through increased surveillance and deployment of security forces, the upstream industry has in recent times increasingly enhanced the protection of oil and gas infrastructure from criminal syndicates who often target oil and gas installations to siphon off crude oil for illegal sale.
“The activities of the syndicates has led to revenue losses for the government, oil companies and other stakeholders, increased cost of production, as well as far-reaching environmental consequences and demarketing of the nation’s global competitiveness.
“The commission has therefore promoted the implementation of Alternative Crude Oil Evacuation Systems to avoid production deferment and losses and other undesirable consequences as a result of pipeline disruption and outages.
“This virtual means of evacuation mainly involves the utilisation of barges and trucks for the transportation of crude oil from the point of production to injection/storage points for eventual transportation to export terminals,” the commission stated in the document.
According to the NUPRC, the ACOES provides a flexible and cost-effective crude oil transportation system for new entrants into the industry, such as the new PPL (Petroleum Prospecting Licence) holders, during Extended Well Test and early production phases.
It said, “For the new entrants, the ACOES provides a temporary solution for crude oil evacuation before the establishment of permanent evacuation infrastructure, such as pipelines or export terminals.
“Through properly laid down regulatory requirements, permitting and approval processes, documentation, accounting of produced volumes, synergy with the Nigerian Navy and other relevant security agencies, the commission has ensured safe and secured barging and trucking operations in the upstream oil and gas industry.
“Indeed, a lot of gains have been achieved through the alternative evacuation systems. The most evident is the NCTL line which recorded as much as 90 per vent production loss last year due to crue theft. In Q1 2024 alone, over three million barrels of crude was evacuated and exported through NCTL as a direct impact of proper deployment of the virtual pipelines.”
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, commended the government for coming up with measures to tackle oil theft.
He noted that the revenue loss from oil theft was humongous, adding that any measure being adopted to halt this would go a long way in shoring up Nigeria’s earnings from crude oil.
“Nigeria earns a bulk of its foreign exchange from the sale of crude oil, so it is important for the government to continue to come up with ways to tackle the menace of oil theft and we encourage them in this,” he stated.