How Nigeria can improve oil infrastructure surveillance

The Nigerian National Petroleum Company has confirmed a staggering 149 incidents of crude oil theft across the Niger Delta region in just one week. This alarming revelation has raised significant concerns about the security of oil infrastructure in Nigeria. The oil thieves have been employing sophisticated tactics, including mounting CCTV cameras in trees to evade security authorities. Oyeyemi Oke, a Partner at AO2 Law, sheds light on the implications of these developments and the challenges faced by security operatives in combating oil theft. Oke emphasizes the lucrative nature of the oil theft industry, citing reports of products valued at $1 billion being stolen in Q1 of last year alone. The increasing sophistication of oil thieves, such as the use of directional drilling equipment for horizontal drilling, poses a major challenge for security forces. As the NNPC ramps up its efforts to combat oil theft, Oke underscores the need for enhanced technological capabilities and ground-level efforts to effectively tackle this menace. The establishment of a control center by NNPCR, akin to Saudi Aramco's, signals a positive step towards bolstering surveillance and monitoring of oil pipelines. By utilizing drones, IoT meters, and other advanced technologies, security operatives can swiftly detect and respond to vandalism and theft incidents. While NNPCR's control center is a promising development, Oke stresses the importance of continuous improvement and investment in cutting-edge technology to stay ahead of sophisticated oil thieves. In addition to addressing oil theft, Oke delves into the contentious issue of the 3% host community fund under the Petroleum Industry Act (PIA). The NUPRC has refuted claims of shrinking the 3% contribution, clarifying the regulator's role in overseeing the utilization of the fund. Oke points out that while the 3% allocation remains unchanged, there are debates surrounding the financial responsibilities related to the host community fund's management. The question of who should cover the costs for initiatives like the host comply portal, aimed at ensuring transparency in fund deployment, remains a point of discussion between regulators and stakeholders. Furthermore, Oke highlights the distinction between regulatory oversight and operational control, emphasizing that operational matters fall within the purview of stakeholders, subject to regulatory scrutiny. Issues such as needs assessment and board appointments are considered operational decisions that should be handled by stakeholders, with regulatory bodies focusing on ensuring compliance and effective fund utilization. As discussions continue around optimizing the management of the host community fund, stakeholders are urged to collaborate and clarify responsibilities to enhance transparency and accountability. The challenges posed by oil theft and fund management underscore the critical need for collaboration, innovation, and adherence to regulatory frameworks to safeguard Nigeria's oil industry and promote sustainable development.