Leadership (Abuja)

Nigeria, UK Discuss Crude Oil Theft

Worried by the alarming rate of crude oil theft, a loss estimated at over $6 billion annually, President Goodluck Jonathan has begun soliciting the support of the global community to help address the challenge.

Minister of Petroleum, Mrs. Diezani Alison-Madueke disclosed, yesterday, during her presentation at the on-going 2013 Nigeria Oil and Gas (NOG) conference and exhibition in Abuja, that Jonathan met with the British Prime Minister, David Cameron, last week on the issue.

She said that Nigeria was championing the crude oil finger print to detect crude oil theft as purchased by other nations but declined to mention the states involved.

"I cannot mention the states because the issue of vandalism and bunkering are major security issues and the security services will be working on these issues hand in hand with us; the President of course will be the one to begin to call on his colleagues from other countries who could assist us in phasing out this menace.

"We already have Mr. President meeting with David Cameron a week ago and it came up there and they pledged to assist us fully in dealing with this and as the structures are put in place, they will begin to come on board, they are very ardent at joining us to actually rid ourselves of these particular scourge but I cannot begin to list the countries right now," she said.

She said although her ministry was working on addressing the issue of vandalism along with the service chiefs, government is still seeking support of international communities, and noted that "the expectation is that within the next 12-18 months, we will see a very significant decrease in oil theft."

She, however, noted that in the last 12 months the country has maintained an oil production of 2.4 million barrels per day (bpd) with increased gas production from 6.3 to 7.8mscuf/d while it has achieved a decrease in gas flare to less than 11 per cent compared to 20 per cent in 2010, which is expected to further drop to two per cent by 2017.

She also disclosed plans to further increase power generation by additional 40 per cent to at least six gigawatts with the addition of another 450mscuf/d of gas supplied to power generation.

The minister noted that the US shale gas technology was already affecting Nigeria's oil export and expressed the need for the nation's oil industry to improve its efficiency and technical creativity to ensure an increase in levels of proficiency.

"I must say that the world is now becoming more competitive, the US shale oil and increase in their gas production is already affecting our oil export to that country bearing in mind that she was one of our major trade partners in this sector," she said.

Throwing more light on the shale gas threat, the Group Managing Director of the NNPC, Engr. Andrew Yakubu, in his presentation, said Nigeria that was mindful of the threat that shale gas now poses on the energy mix, and pointed out that the country was not trapped on the negative side of the game.

So far, he said that there was about 6.6 trillion cubic feet (tcf) of shale gas, with China contributing the largest chunk of about 20 per cent while the US is next on the radar.

Giving details of shale gas impact on the energy mix, Yakubu said, "there is no doubt that shale gas has come and is with us, we also know that it is posing a challenge to the oil and gas activities in Nigeria. With the coming up of shale gas there has been a drop of pipeline imports from 16 to 12 per cent while shale gas has grown from 8 to 32 per cent, and LNG import has dropped from 3 to 1 per cent, which is mainly Nigerian LNG.

"So there is no doubt that shale gas is a challenge to us. With the various energy mix and shale gas continuing to grow and contribute significantly to the global oil supply as we have seen, of course, it will challenge our own oil and gas. Currently US is leading with about 33 per cent of onshore oil production which is expected to grow to 51 per cent by 2040."

He stated that while there hasn't been any targeted exploration for shale gas in Nigeria, there is scientific proof that Nigeria has about 600tcf of gas along which is expected to be shale gas. He also added that Nigeria still has significant potential of being part of the global energy mix should shale gas decide to pose a threat.

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