Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPCL, justified the use of private security contractors to protect oil and gas pipelines and installations, particularly in the Niger Delta, yesterday, saying their efforts were yielding positive results.
According to Kyari, who stated this in his keynote address at the House of Representatives Anti-Corruption Committee’s legislative transparency and accountability summit titled “Enhancing Transparency and Accountability in the Oil and Gas Sector,” the country could not have continued to lose over 200,000 barrels of oil through theft on a daily basis.
He said thousands of illegal refineries had been destroyed, adding that the company made a discovery of over 295 illegal connections to national trunk pipelines.
Kyari, however, said two national lines had since been restored, while efforts were being sustained to root out oil thieves and other unwholesome activities.
The NNPCL boss also said he had received many threats to his life in his drive to curb the menace in the oil extractive industry.
Speaking on the finances and remittances of the company, he said NNPCL was open to forensic auditing, even as he underscored the reality of fuel subsidy.
He said: “The energy sector remains very critical to national development. There’s no country that has developed without energy. You can’t do this if you’re not able to harness your resources for the benefit of the people.
”It’s important to see a situation where the energy sector becomes completely transparent and accountable. I congratulate the National Assembly for passing the Petroleum Industry Act, PIA.
”The law was very clear about many things we can’t no longer do. As we continue to improve on this, you will see that this industry will serve its purpose, to provide energy for today and tomorrow.
“We are making sure that systems are automated, systems and processes respect policies. No doubt, abilities need to be upgraded. I agree with Prof that confidentiality clauses in agreement are always a root cause of some of the challenges twe have.
”Can we have timeframe within which we can disclose it? On the average time is that no contract should be private after one year. That way, you can preserve the commercial interest and at the same time make it known to all stakeholders who are Nigerians.
“Can government companies make profit, yes, I can share data with you, also published in our data statement of account.
“In 2018, we made loss of N803 billion, we reduced the losses to N1.3 billion. By 2021, we made profit of N687 billion. So, it’s possible to make profit. We can do better than what we are doing today.
“Dealing with multinational oil companies, the strength of any agreement is the capacity of active members who negotiate these contracts. Partners do take advantage of their partners, it happens. But there’s a common rule in the oil and gas industry that when you take advantage of your partner, you will come to realize it years later and it pays back at you.
“For us, we make sure that there are systems and processes that enable your active members not to do certain things. Every level of authority has what they can or cannot do.
“The issue of crude oil theft we discovered, was not expected. We didn’t know that this is happening but the scale is enormous, we have seen pipelines taken from our main trunk lines to abandon platforms.
”We have thousands of illegal refineries that we have taken down in the past 45 months.
We have seen over 295 illegal connections to our pipelines. Many of them have been there for years.
”That you have a situation where your production came down to 1.1 million barrels, from 1.8, the reason is that not all of them are stolen. Let me clear about that misconception that the remaining balance is stolen.
“Companies will stop injecting oil into the pipeline the moment they discover it can’t get to the terminal. Therefore, at the peak of production, you lose over two hundred thousand barrels per day. But once companies discover this production won’t get to the terminal, they will terminate it. So, we are losing up to 700,000 barrels of opportunity. It’s opportunity lost.
“In terms of stealing, we have been able to restore two of our trunk lines after the discoveries we have made. We were left with no choice than to involve private security contractors and it works, they are complementing our government security agencies and they have done great work. The navy, army and etc everyone has made contributions.
“This industry is in shortfall of a change. I have several death threats to myself. This is the cost of change. When people walk away from things they are used to, to something that’s new, something that will take away value and benefit from them, they will react.That reaction is beneficial to us for all of us that will work together to make sure that this works.”
In his presentation, the chairman of the Economic and Financial Crimes Commission, EFFC Abdurasheed Bawa, who was represented by the Head of Operations, Micheal Wetcas, pledged to work together with the relevant authorities to enhance transparency in the oil and gas sector.
“For us in the EFCC, we are determined to continue to work closely with stakeholders in the extractive sector to enforce accountability. We will continue to hold accountable those who breach the public trust in the sector whether they are corporations or individuals, whether local or foreign.
”The laws enforce by the commission target contravention of legal stipulations on transparency and accountability in both public and private sectors. As far as the extractive industry is concerned, the most critical challenge is how to achieve a pro Nigerian meeting of minds on the platform of extant laws and regulations between investors and regulators. ”Throwing transparency and accountability in petroleum industry might seems an arduous task but we believe in the EFCC that whatever we are determined to achieve is doable.
”Lets us all join hands together to rescue the Nigerian extractive industry from the grips of unscrupulous prayers in the quest of seeing a Nigeria that free of economic and financial crimes”, he said.
Similarly, the Chairman of the Independent Corrupt Practices and Other Related Offences Commission, ICPC, Prof. Bolaji Owasanoye, cautioned Nigerian against signing agreements that were counterproductive.
“ICPC serves as secretariat for the inter-agency committee on IFF. We have focused on building capacity of line officers from the member agencies in particular and other MDAs on negotiation of agreements (if you sign a bad agreement, you will feel the consequences of such bad agreement and the evidence on ground right now is that Nigeria currently loses about 60 per cent of her revenue to bad agreements),” he said.
On his part, the Executive Secretary, Nigerian Extractive Industry Transparency Initiative, NEITI, Ogbonnaya Orji, reeled out recent earnings from oil, pleading the National Assembly to always use their report for data purposes.