The Senate Committee on Petroleum (Upstream) has backed the N48bn oil pipeline surveillance contract awarded to a former Niger Delta militant leader, Government Ekpemupolo, also known as Tompolo, by the Federal Government.
The Nigerian National Petroleum Corporation Limited (NNPCL) had in September awarded the contract to Tantita Security Services Nigeria Limited (TSSNL), a company media report said linked to Tompolo.
The N4bn per month contract, which covers Delta, Ondo, Imo and Rivers and some parts of Bayelsa, attracted oppositions from some stakeholders in the sector.
But Sen.Albert Bassey Akpan (YPP-Akwa Ibom), who is Chairman of the committee, said there was nothing wrong engaging non-state actors to secure oil pipelines in as much as the contract was yielding desired results.
He said this on Tuesday in Abuja, while briefing Journalist shortly after presenting the report of the Senate ad hoc committee to investigate oil lifting, theft and the impact on petroleum production and oil revenues at plenary.
He said oil theft had reduced the country’s oil production capacity and had resulted in the loss of about two billion dollars since the year began .
He said major export facilities, like the Bonny and Forcados Terminals, were shut down for a over seven months due to pipeline vandalism and oil theft.
He, however, said the recent pipeline surveillance contract to address oil theft was yielding positive results as the country’s oil production capacity has increased.
“There are both formal and informal approaches to solving the issue. If that contract was contracted duly and processed, we don’t have any issue with it and if it yields desired outcomes, I don’t think there is anything wrong in it
“We commend the NNPCL for the action,as we speak, the Forcado terminals have restored 500,000 barrels a day to our national production.
“Just about five days ago, the first 87,000 barrels a day was received at the Bonny terminals. So, things are getting better.
“This means that the abridged intervention done recently by government have yielded positive results because the production would have been shortened and you could imagine the effect on investment because investors will hold back if they cannot derive maximum profits from their investments.
“The government has not attracted desired investment in the oil and gas industry despite the PIA because what is being produced is being stolen.”
Earlier Senate at plenary adopted recommendations of the committee.
Part of the recommendations included that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) should resume full regulatory oversight of all existing crude oil terminals in Nigeria.
The terminals according to the report include integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.
It also adopted that the
Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)statutorily should concentrate fully on regulating the midstream and downstream activities.
This, it said includes refineries, midstream and downstream gas infrastructure, supply, storage and distribution of refined petroleum products, petrochemicals, virtual pipelines and retailing facilities, in line with the provisions of the PIA.
It also adopted that there should be an immediate streamlining of the agencies present at the terminals in line with the relevance of PIA delineated upstream and midstream and downstream statutory functions .
It further adopted that NUPRC should strengthen deployment of digital accounting procedures, such as advance cargo declaration, digital integration of units at all crude oil terminals for transparent hydrocarbon accounting.
It adopted that NUPRC should fast track the upgrade of the National Production Monitoring Systems (NPMS) to enable Real Time monitoring of Flow station and Terminal activities among other recommendations.