Nigeria Destroyed Over 5,500 Illegal Refineries in Last Three Years: NNPC

The Nigerian National Petroleum Co. Ltd. (NNPC) destroyed more than 5,500 unauthorized refineries and nearly 4,500 illegal pipeline connections over the last three years, according to the national oil and gas company’s chief executive.

Speaking at a university guest lecture in Ile-Ife, Osun, Mele Kyari highlighted pipeline vandalism and crude oil theft, as well as rapid population growth, as the main challenges to energy security in the West African country, the NNPC said in a news report.

Kyari told his audience at the Obafemi Awolowo University that Nigeria should respond by diversifying its energy sources and implementing energy efficiency measures and energy conservation.

On the NNPC’s part Kyari highlighted the role of the company’s Command and Control Center in detecting illegal oil facilities.

“The center provides livestreaming of surveillance data to security forces, contributing to the detection and destruction of over 5,686 Illegal Refinery sites and the removal of 4,480 Illegal Connections from 2021 to the present”, Kyari was quoted as saying in the NNPC report.

The NNPC wrote, “Acknowledging the severity of vandalism and oil theft, Kyari hinted at a strategic shift, focusing on increased products trucking and storage in underground tankages at NNPC filling stations nationwide”.

The nagging problem of oil theft comes amid a shortage of refinery feedstock in Nigeria.

Last month the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it had met with the Nigerian Midstream Petroleum Regulatory Authority to seek stronger action to ensure domestic crude supply. The meeting sough to address “the prevailing shortage of feedstocks to the modular refineries operating within the shores of the country”, the NUPRC said in a press release.

Last November the government inaugurated a special committee to combat oil theft.

In the country’s annual oil and gas fair last year, the oil and gas regulatory body Nigerian Content Development and Monitoring Board (NCDMB) urged the government to address “wanton crude oil theft in the Niger Delta” to “enable the production of hydrocarbons at reasonable costs and profitability”.

“[M]ost indigenous operators were unable to evacuate their crude oil through pipelines for over one year and are now forced to explore alternative options at high costs”, the NCDMB said in a media statement last May.

Divestments by Energy Majors

Against this backdrop, Equinor ASA last year decided to exit the country, while Shell last week announced the divestment of its onshore subsidiary in Nigeria.

“This transaction realizes value and is in line with Equinor’s strategy to optimize its international oil and gas portfolio and focus on core areas”, Norway’s majority state-owned Equinor said in a statement November.

Meanwhile Shell in a statement January 16, 2024, said the sale of Shell Petroleum Development Company of Nigeria Ltd., “marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions”.

On September 4, 2023, Eni SPA announced an agreement divesting one of its units in Nigeria to Oando PLC, saying the move is part of efforts to refocus on more profitable assets. Nigerian Agip Oil Co. Ltd. is an onshore-focused oil and gas exploration and production subsidiary of the Italian energy major.

In 2022 Exxon Mobil Corp. announced an agreement to sell its equity stake in Mobil Producing Nigeria Unlimited to an independent local player. Mobil Producing Nigeria holds a 40 percent stake in four oil mining licenses including over 90 shallow-water and onshore platforms and 300 producing wells, according to ExxonMobil. ExxonMobil will maintain its deepwater assets in Nigeria.

To contact the author, email jov.onsat@rigzone.com