Strategies NNPCL Implemented To Curtail Pipeline Vandalism, Oil Theft, Improved Crude Oil Production And Refining Capacity, By Prof. U. A Danbatta

NNPC Ltd Production Monitoring Centre (PMCC).
INTRODUCTION

The Nigerian National Petroleum Corporation (NNPC), now known as the Nigerian National Petroleum Company Limited (NNPC Limited), was founded in 1977 by the Federal Government of Nigeria. Its establishment was driven by the need to harness and manage the country’s vast petroleum resources for economic development and sustainability. Before the establishment of NNPC, petroleum exploration and production in Nigeria were dominated by international oil companies (IOCs) such as Shell Plc, ExxonMobil, TotalEnergy, and Chevron, etc.

The Nigerian government began to engage in joint ventures with these IOCs in the late 1960s, seeking greater control over the nation’s oil resources. In 1971, Nigeria became a member of the Organization of the Petroleum Exporting Countries (OPEC), aligning with OPEC’s push for member states to nationalize their oil industries. The NNPC was established by the NNPC Act No. 33 of 1977, which merged the then Nigerian National Oil Corporation (NNOC) with the Federal Ministry of Mines and Power. This act granted the corporation the dual role of regulating the oil and gas sector and engaging in commercial operations.

In 2021, the Petroleum Industry Act (PIA) was passed, leading to the transformation of NNPC into a commercially oriented, profit-driven company, officially incorporated as the Nigerian National Petroleum Company Limited (NNPC Limited) in 2022. NNPC Limited is now a Nigerian state oil company and has been instrumental in managing Nigeria’s oil and gas industry. Its activities can be categorized into exploration, production, regulation, and corporate social responsibility. Nigeria has the reserves and to help boost production NNPC Limited holds joint ventures and production-sharing contracts with international oil companies to leverage expertise and technology, aiming to boost production levels and operational efficiency.

In recent years, Nigeria faces significant losses from large-scale oil theft sabotage, and the exit of oil majors from land fields to focus on offshore exploration. Reports indicate the country lost substantial amounts in recent years due to broader systemic issues, such as political and economic factors that facilitate oil theft. NNPC Limited has already stated it is committed to reversing declining crude production and will replace partners that fail to fulfil their joint venture commitments on output.

The recent increase in Nigeria’s oil production from 1.43 million barrels per day in June to 1.808 million barrels per day in November 2024, can be attributed to a combination of broader strategies put in place by NNPC Limited to address pipeline vandalism and oil theft, in order to enhance oil output and to grow production. These strategies include heightened security architecture and operational efficiency, community engagement and partnerships for development, and collaboration and use of technological innovations.

2.0 SECURITY ARCHITECTURE AND OPERATIONAL EFFICIENCY

NNPC Limited implements an enhanced security architecture to contend with significant security challenges, including oil theft and vandalism. It engages the Armed Forces and other security agencies (including private contractors and local community surveillance groups), to monitor and protect pipelines and report any suspicious activities. An example of such an initiative is the deployment of local surveillance groups with strong community ties, such as Tantita Security Services NNPC Limited., to complement the efforts of state security agencies, ensuring a more comprehensive approach to monitoring and securing pipelines in Niger Delta.

These surveillance groups often work in tandem with government security forces, providing valuable insights and support that enhance surveillance and rapid response to potential theft incidents. By integrating local knowledge of the local terrain and community dynamics with formal deployment of security measures like gunboats, these groups have enhanced the effectiveness of broader security operations to combat crude oil theft and pipeline vandalism in the Niger region. They work closely with local stakeholders to ensure the protection of vital oil infrastructure and resources. This complementary security approach aims to protect critical oil infrastructure by increasing the physical presence of security personnel along pipelines, deterring potential vandals and oil thieves.

NNPC Limited has also intensified its engagement with the Armed Forces, Civil Defense, and the Economic and Financial Crimes Commission (EFCC), to combat oil theft, pipeline vandalism, and protect other oil facilities. This partnership aims to strengthen enforcement measures and reduce illegal activities affecting pipeline integrity. The challenges this approach face includes logistical issues, complex terrains, ad hoc arrangements, and lack of strategic guidance, all of which can hinder seamless cooperation. Effective engagement requires coordination among the different security agencies, and this necessitates a coordinated approach under the able leadership of the Chief Security Officer (CSO) of NNPC Limited and his team to bolster surveillance and enforcement that will enhance the overall strategy to protect Nigeria’s vital oil resources.

This centralized approach streamlines communication and coordination among local

communities, private surveillance firms, and conventional security agencies, ensuring a more efficient and timely response to security incidents. The measure has been successful in reducing incidents of oil theft and pipeline vandalism in the region. Their efforts have led to a significant reduction in oil theft incidents, as ships involved in illegal activities such as sophisticated oil theft operations, are now hesitant to enter the region. This approach has been instrumental the overall strategy to protect Nigeria’s vital oil resources with single accountability for national critical infrastructure.

NNPC Limited also focuses on optimizing the efficiency of its operational processes to maximize production output from existing fields by efficiently managing and modernizing its operations. It has been actively working to improve transparency in its operations to align with global best practices, by implementing more transparent sales processes.In addition, the company is also working on rehabilitating of existing refineries to improve domestic refining capacity and reduce dependence on imported petroleum products.

It does this by adhering to the Domestic Crude Oil Supply Obligation Regulations (DCSO), which mandate that operators allocate a portion of their crude oil production to domestic refineries to ensure crude oil is supplied to licensed refineries operating within Nigeria. The company ensures that international refineries validate the credibility of Nigerian crude sources by assigning a unique registration number to every product leaving the country, which is validated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Such structured allocation mechanism enhances the traceability and credibility of Nigerian crude oil, providing assurance to international refineries regarding its legitimate sourcing.

3.0 COMMUNITY ENGAGEMENT AND PARTNERSHIPS FOR DEVELOPMENT

NNPC Limited engages with host communities and other stakeholders to prevent pipeline vandalism and oil theft by community engagement and collaborative efforts with local surveillance groups. Community members involved in local surveillance groups monitor oil infrastructure effectively, by gathering real-time intelligence on suspicious activities and promptly reporting to relevant authorities.

The company also emphasizes the importance of engaging with local leaders and traditional rulers to build trust and encourage community participation in anti-theft efforts. This is done through regular dialogue to understand their needs and concerns, as they often lack economic opportunities, leading some to engage in oil theft. Traditional leaders also play a significant role by discouraging community members from engaging in illegal activities of oil theft.

The NNPC Limited addresses underlying systemic social issues like poverty and unemployment

that are contributing to oil theft in host oil-producing local communities, by engaging in consistent dialogue and providing economic incentives, the company aims to reduce sabotage and encourage community-led monitoring. This includes providing economic opportunities for alternative livelihoods, and social services to reduce poverty and dependency on illegal activities, on the basis of partnerships for development.

As part of this strategy, the company has also established several community partnerships to curb pipeline vandalism, and these include i) adopting the host community model which involves engaging with local communities to ensure their active participation in securing pipelines and preventing illegal activities; ii) entering into Global Memoranda of Understanding (GMOU) with host communities, which outline mutual responsibilities and benefits designed to foster cooperation and reduce conflicts; iii) adopting the Host Community Model which involve members of local communities in safeguarding pipeline infrastructure, and encourages them to take ownership of the pipelines passing through their territories. Through these community partnerships, NNPC Limited aims to foster local involvement, promote a safer operating environment, enhance the protection of its pipeline infrastructure, and reduce environmental pollution.

These partnerships can encourage communal participation in safeguarding oil infrastructure, fostering a collective sense of responsibility. Engaging local youths in community policing and surveillance activities helps in identifying and deterring potential threats to oil installations. It also provides employment opportunities to the youths, reducing the economic incentives that might otherwise lead individuals toward participating in oil theft, further stabilizing the region.

NNPC Limited also promotes sustainable alternatives by providing vocational training and capacity-building programs to educate and enhance the skill gaps in security, environmental management, and entrepreneurship programs within local communities. This can foster a sense of ownership and responsibility among community members to protect oil facilities.

The involvement and empowering of local stakeholders as part of broader efforts by the Crude Oil Theft and Management Committee is a positive development. It has significantly impacted the success of oil theft prevention efforts in the Niger Delta by supporting community development projects, creating employment opportunities, and offering incentives to community members (e.g., financial rewards) who report oil theft incidents or provide information leading to the arrest of oil thieves and prevention of incidents of oil theft or vandalism.

The company also supports the development of private refineries, including the Dangote Petroleum Refinery, by facilitating crude oil supply agreements and creating an enabling

environment for private sector participation in refining activities. It has also encouraged the licensing of modular refineries to discourage illegal artisanal refining, providing a legal alternative for community members involved in oil theft.

NNPC Limited has restored and enhanced the operational capacities of its existing refineries at Warri and Port Harcourt. These efforts are part of a broader strategy to achieve self-sufficiency in refined petroleum products. In addition, it supports the conduct of public awareness campaigns to educate locals about the negative impacts of oil theft and the dangers of illegal refining on their environment and livelihoods, to discourage participation in such activities.

4.0 COLLABORATION AND TECHNOLOGICAL INNOVATIONS

NNPC Limited collaborates with various stakeholders and uses advanced technology innovations to monitor and secure pipelines. It works with government agencies to implement policies that benefit host communities, such as the derivation allocation, to improve living conditions and reduce incentives for oil theft. The company collaborates with regulatory bodies and law enforcement agencies, such as the EFCC, to combat pipeline vandalism, sophisticated crude oil theft and curb illegal refining activities.

This collaboration has led to increased arrests and deterrence of illegal criminal activities due to the implementation of stronger legal frameworks against oil theft, as proposed by the National Assembly, which is playing a crucial role in prosecuting offenders and enforcing stronger legal measures against theft and against economic saboteurs. It also allows for the sharing of intelligence between NNPC Limited and law enforcement agencies, enabling more effective identification and disruption of illegal operations. This includes the deployment of the “Detect, Deter, Destroy, and Recover” strategy, inspired by international best practices to combat oil theft.

NNPC Limited is actively involved in the deployment of state-of-the-art technology, to ensure efficient and safe surveillance and monitoring in tackling pipeline vandalism and oil theft. This strategy involves the adoption of advanced technologies, such as “Crude Theft Monitoring Applications”, video surveillance technologies, in-line inspection tools and satellite surveillance, drones’ surveillance with infrared capabilities (especially at night when most illegal activities occur), to monitor pipelines and secure infrastructure.

NNPC Limited has developed and implemented the “Crude Theft Monitoring Applications (CTMA)” tools as part of a broader strategy to combat crude oil theft and pipeline vandalism. This is a standalone initiative with enhanced video surveillance and community engagement tools, which enables community members and stakeholders to report incidents in real-time and receive rewards.

The CTMA applications tools can be accessed via the portal ‘www.stopcrudetheft.com’, for reporting incidents to enhance the monitoring of pipeline integrity and real-time detection of breaches, enabling swift responses to potential threats. These tools provide intelligence on oil theft that facilitates prompt real-time monitoring, tracking, detection, and prevention of illegal oil theft activities, to validate the origin of crude oil and ensure that only legitimate crude oil is exported by tracking stolen oil across borders.

The company has also adopted and implemented Saudi Aramco’s model of using video surveillance technologies to monitor pipelines and secure infrastructure. This involves setting up control centers to monitor oil assets in real-time, enhancing detection and response to theft incidents. The NNPC’s control Centre utilizes a cutting-edge technology to monitor and manage its vast oil infrastructure across the country, leveraging real-time data to optimize production and security operations. However, NNPC Limited‘s Centre faces challenges related to infrastructure and systemic issues due to the sophisticated nature of the crime and the involvement of various stakeholders, including corrupt officials and local participants.

As such, the use of AI and advanced surveillance systems, similar to those employed by Saudi Aramco, is being explored to replicate similar capabilities and high operational efficiency of the Aramco’s control Centre. Deploying AI-powered advanced analytics can improve predictive modeling and incident response times, and its implementation could allow proactive measures in predicting potential theft hotspots and identifying patterns in oil theft activities.

NNPC Limited is also integrating high-resolution video surveillance, similar to the Central Coordination, Data Integration and Activation Control Room, to provide comprehensive oversight of its operations and enhance its security operations. This integrated system improves response times by providing a centralized platform for real-time monitoring of pipelines and facilities, data integration to enhance situational awareness and decision-making, and automated rapid response activation that reduces the time between incident detection and response initiation.

The use of advanced surveillance systems, such as satellite monitoring or drone surveillance, could also enhance monitoring capabilities and reduce oil theft. In addition, leveraging Internet of Things (IoT) technologies like leak detection sensors and acoustic sensors could provide real-time data on pipeline integrity. It utilizes sensors to detect potential leak and prevent oil theft more effectively by sending real-time alerts via an internet connection to a user, allowing for prompt action to prevent further damage. This IoT Solution is essential in detecting and securing vulnerable areas to prevent crude oil theft in the Niger Delta.

5.0 CONCLUSION

The Nigerian National Petroleum Company Limited (NNPC Limited) has implemented a multifaceted strategy to address challenges in the oil sector, focusing on curbing crude oil theft and pipeline vandalism, while enhancing crude oil production and refining capacity. It employs several strategies to address the economic and environmental impacts of crude oil theft and vandalism, while improving Nigeria’s energy security. This vital component of prevention efforts is part of a broader strategy that requires enhanced security measures, community engagement, deployment of “Crude Theft Monitoring Applications”, setting up control centers using video surveillance technologies to monitor oil assets in real-time and secure infrastructure, through enhanced detection and response to theft and vandalization incidents.

The effectiveness of these strategies in reducing oil theft in Nigeria is mixed due to the scale and complexity of pipeline vandalism and crude oil theft. That is why the coordination work of CSO of NNPC and his team is crucial in fostering trust and cooperation between security agencies, oil companies, and the oil-producing communities. They do this through effective engagement between the communities, government, and armed forces, which is essential in combating crime and preventing any likely emerging security threats that will sabotage Nigeria’s vital oil resources. Through these initiatives, NNPC Limited strives to improve crude oil production and domestic refining capacity, as well as maintain the integrity of Nigerian crude oil in the global market, ensuring that international refineries can confidently validate its credibility.

Prof. U. A. Danbatta is the current Director of the NNPCL funded

Centre of Inland Basins Studies (CIBS), Phase II Site,

Ahmadu Bello University Zaria, Nigeria.

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