Crude Oil Theft Crisis: NNPCL CEO Reveals 4,800 Illegal Connections Threatening Federal Projections

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, has sounded the alarm over the escalating crisis of crude oil theft and vandalism in the Niger Delta region. In a candid statement made during his appearance before the Senate Committee on Appropriation to discuss the 2024 budget, Kyari disclosed that there are over 4,800 illegal connections on crude oil pipelines in the area.

Kyari emphasized the gravity of the situation, asserting that the security challenges in the Niger Delta pose a significant threat to the Federal Government’s oil production projections. He described the rampant vandalism and oil theft as a calamity, deeming the current state of affairs in the region as abnormal.

“The situation we have in Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world. To engage non-state actors as the last resort as a solution is abnormal. But we have to respond abnormally,” Kyari stated.

Highlighting the impact of illegal connections on production, he explained, “You have over 4,800 illegal connections on our pipelines. That means, within every kilometer, you have an insertion. Even if you seal all the insertions, you can’t get what you want in terms of production.”

Addressing concerns about the disagreement between the Senate and NNPCL over the proposed increase in the crude oil production benchmark for the 2024 Appropriation Bill, Kyari reaffirmed the company’s commitment to the benchmark approved by President Bola Ahmed Tinubu. He emphasized that the crude oil price and production benchmarks are based on dynamics in the global oil market.

Kyari also provided insights into the company’s efforts to address the challenges, mentioning the engagement of locals to combat illegal refining activities. He highlighted the environmental and community damage caused by these activities.

In addition, Kyari updated the Senate on the status of refinery projects, stating that the Port Harcourt refineries would come online in December, the Warri Refinery would resume production in the first quarter of 2024, and the Kaduna Refinery is targeted for production in December 2024.

The session included discussions on fuel subsidy removal, with Kyari asserting that the company would have collapsed if not for President Tinubu’s decisive intervention. He denied the payment of any subsidy by the company and emphasized the positive financial impact of subsidy removal, allowing the company to stand on a solid financial footing.

Despite Kyari’s explanations, senators expressed dissatisfaction with the N406 billion dividend to the Federation Account between July and November, urging the oil giant to strive for global competitiveness comparable to companies like Saudi Aramco and Petrobas of Brazil. Kyari defended the company’s historical approach, noting that it operated differently before the passage of the Petroleum Industry Bill into law, transforming into a profit-driven enterprise.