Managing Director of Aiteo Exploration and Production Limited, Mr Victor Okoronkwo, yesterday, expressed concern over the rising spate of crude oil theft in the country, stating that the activities of vandals are posing serious security risks to oil assets across the country.
Speaking in Bayelsa, at the ongoing 9th Practical Nigerian Content, Okoronkwo lamented that oil pipelines and flowlines, especially its 600,000 barrels per day Nembe Creek Trunkline, NCTL, were constantly vandalized by unscrupulous elements, who are hell-bent on sabotaging the company and the country.
He disclosed that despite efforts to increase crude oil production, oil companies had continuously suffered more shutdown in its operations, leading to a significant loss of revenue for the companies and the government.
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For Aiteo, he said: “One of the biggest challenges we face in our operations is the security of our pipelines and oil facilities. Our pipelines and flowlines are constantly vandalised by unscrupulous elements tagged ‘crude oil thieves’ attempting to cause economic sabotage to our company and the people of this great country.
“Despite our efforts in raising NCTL uptime from 60 per cent to over 80 per cent since the acquisition, we have recorded more shutdown days in operations due to third party infractions for over two months this year compared to previous years.
“This has resulted in a loss of revenue and deferments estimated at about four million barrels so far this year. Also worrying is the amount of crude loss recorded even when the pipeline is operational, usually in the range of 25 per cent to 35 per cent.
“More worrying is that even when the perpetrators of these acts are caught and handed over to security agencies, we are yet to witness any convictions.
“Remember, Aiteo operates the NCTL which also serves four other oil companies (Eroton, Newcross, Belema Oil and Shell) injecting into the pipeline, hence, when there are infractions on the line, these companies are also forced to shut-down; resulting in economic losses for these companies also and the Federal Government by and large.”
He, however, noted that despite all these challenges, Aiteo had kept its commitment to the Nigerian Content Development Monitoring Board, NCDMB paying up to N1.52 billion in NCDMB fees and N1.5 billion as NDDC levies.
“In addition, Aiteo has spent over N3.6 billion in community support programs and projects; offered jobs to thousands of Nigerians and intentionally led inclusive participation of indigenous contractors in our business operations, from EPCM provisions, provision of marine equipment, civil works and manpower provisions,” he explained.
Furthermore, Okoronkwo disclosed that for oil and gas companies to stay relevant and retain their license to operate, they must reinvent their purpose and compete more effectively in the emerging energy economy.
According to him, up until recently, technological evolution in the upstream environment had been progressively linear, leading to the matured business landscape, noting, however, that in recent times, the once stable oil and gas industry had been dealing with massive disruption on multiple fronts.
“Increasing oil price volatility is adding complexity to a fast-changing energy sector where digital technologies and the drive for greener energy and demand are putting shareholder returns at risk while creating major re-evaluation of future commodity prices and energy value chains.
“Digital is reinventing every aspect of the energy value chain, with new digital players and platforms disrupting the competitive landscape,” Okoronkwo explained.
He advised that companies must learn to focus on the essence of their business, re-think their operating models, embraces new technologies and adopts new workforce strategies as they strive to become more agile and adaptable, connected and collaborative in the energy revolution.
The Aiteo boss explained that Nigerian oil companies must also begin to start building the workforce of the future, seeking to attract and equip a modern workforce as well as enhance labour proficiency and optimize productivity, using data and digital capabilities.