The report some days ago that the Federal Government was contemplating the construction of pipelines covering over 1,000 kilometres from Agadem in Niger Republic to supply crude oil for refining at the Kaduna Refining and Petrochemical Company Limited (KRPC) appears an indication that resolving the problem of renewed militancy and destruction of oil infrastructure in the Niger Delta region has become an uphill task for the government.
Group Managing Director of Nigeria’s oil behemoth – the Nigerian National Petroleum Corporation (NNPC) – Dr. Maikanti Baru, was quoted as saying at a town-hall meeting with the management and staff of KRPC in Kaduna that the FG was commitment to the upgrade and expansion of the Kaduna refinery in line with the Corporation’s 12 key business focus areas in order to return it to the path of growth and profitability. Baru said: “Due to challenges with the aged refinery and crude oil pipelines that had been breached severally, the operations of the refinery have been epileptic. This we are determined to resolve through various intervention methods, including evaluation of alternative crude oil supply from Niger Republic through building of pipelines of over 1,000 kilometres from Agadem (Niger Republic) to Kaduna. The efforts are being championed by President Muhammadu Buhari”.
It is, however, common knowledge that the Buhari government has been grappling with the downturn in the nation’s economic fortunes occasioned by falling oil prices. This problem has been compounded early in the year with the renewed and persistent destruction of oil facilities by Niger Delta militants, a development that has adversely affected crude production and export. Last February, for example, a new militant group, the Niger Delta Avengers (NDA), unleashed what it called ‘Operation Red Economy’ campaign on the nation.
By the early days of the month of May 2016 alone, the damages wrought by NDA on oil infrastructure had denied the country revenues amounting to N58.5 billion ($295 million) as a result of the loss of 6.5 million barrels of crude, according to officials.
Between February and May, the Clough Creek Tebidaba Agip Pipeline Manifold in Bayelsa State was blown up by the group.
They did not spare Nigerian National Petroleum Corporation’s (NNPC) crude and gas pipelines that fed the Warri and Kaduna refineries, which destruction crippled the supply of crude to Warri and Kaduna refineries; as well as the feeding of gas to Lagos and Abuja for electric power supply. Blown up, too, were Well D25, a major gas facility belonging to Chevron Nigeria Limited in Abiteye, Warri South-West Local Government Area, the Swamp Headquarters of Chevron, including major pipelines in Abiteye, Alero, Dibi, Otunana and Makaraba flow stations that fed Chevron’s tank farm, thus stalling the latter’s operations, to mention just a few. At a stage, the Minister of Finance, Mrs. Kemi Adeosun, cried out that the country’s oil production had dropped to 1.65 million barrels per day (mb/d), described as the lowest in 22 years, when Royal Dutch Shell PLC declared a force majeure on Bonny Light (crude brand) as a result of pipeline vandalism.
The militants have not relented in their oil installations’ destruction campaign. Indeed, they are still destroying more of such infrastructure, notwithstanding the militarisation of parts of the Niger Delta; as well as purported negotiations between the FG and leaders from the Niger Delta region meant to foster peace.
President Buhari, in the middle of all these; and when critics fingered his government’s alleged bungling of the Niger Delta Amnesty Programme as one of the grouses of the militants, was credited as saying his government was studying the gazette on the amnesty programme with a view to determining what had been fulfilled; promising that whatever was left would be addressed.
As it stands presently, however, it is obvious that the government is yet to determine how best to manage the security challenge posed by Niger Delta militants to Nigeria’s oil wealth, hence the plan to pipe crude oil to Kaduna from Niger Republic for refining. For a country that is one of the foremost crude producing nations, this expensive decision is ‘penny wise pound foolish’, considering the prevailing economic crunch in the country. Charity begins at home.
It will be cheaper for the Buhari government to resolve Niger Delta militant’s crisis and have unfettered access to Nigerian crude than piping crude from Niger Republic. Indeed, who would secure the oil pipelines from Agadem? The grouses of the Niger Delta as a whole and the oil producing communities in particular should be sincerely addressed to guarantee lasting peace in the region.
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