Crude Oil Theft: Navy-EFCC-NNPC And The Web Of Sordid Details – By Ifeanyi Izeze

In his 2017 budget defense at the House of Representatives, the Chief of Naval Staff, Vice Admiral Ibok-Ete Ibas, while presenting the operational scorecard for his service for 2016 disclosed that the Nigerian Navy confiscated crude oil and diesel worth about N420 billion from oil thieves and illegal refinery operators. According to him, the “specific quantity of crude oil and diesel stood at 810,725 and 1,078 metric tons, respectively.”

Using the OPEC conversion factor for Nigerian crude oil, one metric ton has about 7.420 barrels of crude oil while one metric ton of diesel would give 7.22 barrels. So the declared volume of crude oil seized by the Nigerian Navy in 2016 is about 6,015,579.5 barrels. Also for the diesel, one metric ton is approximately 1130 liters. So 1,078 metric tons would be about 1.23 million liters.

Now, as said by the Chief of Naval Staff, the combined proceeds from the sale of the seized crude oil and diesel are about N420 billion. This is just for 2016 alone where we are meant to believe that this administration through its security apparatuses has drastically curtailed the magnitude of the menace. So from 2015 backward, we will be talking of multiples of 6 N420 billion generated from the sale of recovered stolen oil from Nigeria.

Without a doubt, this disclosure is throwing up again very serious issues of accounting for the proceeds from sales of crude and products recovered from oil thieves and pipeline vandals. There is an obvious aberration in the transactions involving the warehousing and selling of recovered stocks.

First, who actually owns these recovered crude oil? This question is pertinent because most of the stolen crude were supposedly tapped from oil facilities, particularly trunk lines belonging to either a foreign international oil companies or a Nigerian indigenous operator or both. So when these crude oils are recovered, whose produced crude account does it go to?  Does it now belong to the government/NNPC or the Navy, or the Economic and Financial Crimes Commission (EFCC)? Are serious efforts actually made to ascribed whatever recovered volumes to the rightful owner – the producer(s)?

Secondly, when the Navy seizes stolen crude oil from oil thieves and pipeline vandals, where does the recovered stock go – to the Navy, NNPC, or EFCC?  Who are the buyers of these seized or rather recovered crude oil – the traditional government certified crude oil marketers, another group of contractors, or the same criminal cartels that also buy from oil thieves that escape the Navy?

If the mind-blowing figures of volumes of crude oil recovered by the Navy have been going to the NNPC, how has it been accounted for – as NNPC productions and from what well/field? These issues need to be explained because severally we have heard of conflicts of interests between the Navy, NNPC and the Economic and Financial Crimes Commission (EFCC) on whose responsibility it is to sell off recovered stolen crude oil.

It would be recalled that at the wake of the Salt Pond crude oil theft scandal, the company involved disclosed that it purchased crude oil legally from the Nigerian government’s Economic and Financial Crimes Commission (EFCC), the authority with primary responsibility for cracking down on financial crimes, as oil theft is classified as one. As said then in a statement issued in Ghana by the chief executive officer of the accused company, Fenix Impex, his company has been one of the official EFCC contractors that help the commission to dispose of (i.e., sell) crude oil consignments seized by the Nigerian military and law enforcement agencies from oil thieves and illegal bunkerers. His words: “The only crude we take from Nigeria…has been seized by the government. We have invoices that we pay to EFCC Nigeria.”

Does the EFCC have offshore or coastal receptor facilities (tank farms/floating storage facilities) where they warehouse recovered crude oil received from the Naval authorities? If yes, where are these facilities located in the entire stretch of the Nigerian coastline?

And if the Navy and the EFCC have no facility to store recovered stolen crude oil from Nigeria, how are the buyers (now the EFCC or Navy or even NNPC contractors) picking up the stock for disposal abroad – onboard naval ships, seized barges/ships/boats/drums in the custody of the Navy? Who ascertains the correct volumes and price before the contractors pick the consignments? We also need to know the actual volumes and dates of the consignment(s) lifted by the contractor(s) on behalf of the federal government (in this instance the EFCC).

Above all, how much has the EFCC, Navy or NNPC generated from the sale of crude oil recovered from oil thieves since this transaction started some years ago? The figure the Chief of Naval Staff dangled at the National Assembly, was it proceeds from sales by the Navy or the EFCC? The monies generated over time from these transactions, where were they lodged? Is the revenue with the anti-graft commission or handed over to the NNPC or transmitted directly to the Single Treasury Account (TSA)? Do we have records of these sales with the Revenue Mobilisation and Fiscal Commission (RMFC) or even the Federation Account?

The federal government seriously needs to address these issues in its efforts to convince Nigerians and even the international community that this administration is sincere in its fight against corruption in the country, especially as it affects the mismanagement of oil proceeds. We need more a serious and detailed explanation of the involvement, if at all, of the Navy, EFCC or NNPC in the serial sale of confiscated crude recovered from oil thieves in Nigeria. It is not enough to tell us that millions of metric tons of crude oil were intercepted and captured by the Navy and then we end the story there. The illegal bunkering economy bleeding Nigeria as ascertained by various respectable international financial and security agencies is estimated to have an average annual value of about $17 billion. So we need accountability and transparency organizations, particularly the Nigerian Extractive Industry Transparency Initiatives (NEITI), to actually live up to their mandates and do the needful. God bless Nigeria!!

 

Ifeanyi Izeze writes from Abuja. He can be reached at iizeze@yahoo.com