—- NIMASA never prosecuted infractions
The Executive Secretary, Nigerian Extractive Industry Transparency Initiative (NEITI), Mr. Waziri Adio, Wednesday disclosed that a whopping $15.9 billion in crude oil was either lost or not accounted for between 2011 and 2014.
According to him, the sum of $4.3 billion; $2.7 billion; $4.7 billion and $4.1 billion were unaccounted for in 2011, 2012, 2013 and 2014 respectively.
He said the losses could have stemmed from deliberate under-declarations by indigenous oil companies as well as outright theft at production terminals.
It further emerged that the Nigerian Maritime Administration and Safety Agency (NIMASA) had never taken any individual or entity to court to serve as deterrence to infractions in the oil industry.
Even when there were clear infractions by oil vessels, the agency had always chosen to “negotiate” and resolve the issue without considering prosecution even for once since it was established.
Speaking when he appeared before the House of Representatives Ad-hoc Committee which is investigating the $17 billion undeclared oil and gas proceeds between 2011 to 2014, which is chaired by Hon. Abdulrazak Namdas, the NEITI Executive Secretary, partly blamed the recurring cases of crude oil theft on the absence of a mechanism for monitoring and measuring the precise volume of oil production.
He lamented that all along government agencies have had to rely on the goodwill of operators to determine the amount of lifting that were carried out. “This is not good,” he said.
He said between 1999 and 2004, the country lacked adequate metering system as well as surveillance infrastructure to monitor crude oil theft.
Citing success stories in other climes, he stressed the need to invest in innovative command center that monitors oil production to the last drop.
He said: “It’s a shame that after over 60 years, we can’t have a mechanism to determine what is produced. “
Waziri also noted that government is currently losing money by its failure to renew expired memorandum of understandings (MoU) with oil companies on account of waiting for the passage of the Petroleum Industry Bill (PIB).
He said the Nigerian Liquefied Natural Gas (NLNG) had received a total of $51.8 billion in payments but had not remitted same to the federation account.
He added that both the Nigerian National Petroleum Corporation (NNPC) and NPDC were yet to remit $21.7 billion to federal coffers.
While further arguing that some of the offshore processing agreement was detrimental to government, he said the country loses about $600 million annually.
Meanwhile, NIMASA’s reluctance to prosecute defaulters caught the committee by surprise given that the agency had immense powers to prosecute with regards to its Act.
A NIMASA Director, Mr. Akanni Pious told the committee that it often considered the huge demurrage and other associated costs which defaulting vessels and companies had to pay as a result of prosecution and therefore, resorted to out of court settlement all the time.
However, Namdas, who expressed the disappointment of the lawmakers said though the agency had good intentions to rid the oil industry of sharp practices, its mode of operation was unimpressive.