FG Considers Crude Oil Transportation via Trucks to Curb Pipeline Vandalism

FG To Handover Pipeline Assets To Private Investors

Amid persistent challenges posed by pipeline vandalism and crude oil theft, the Federal Government is contemplating a shift towards alternative methods for evacuating crude oil, which may involve the use of barges and trucks for transportation.

This initiative, known as the Alternative Crude Oil Evacuation Systems (ACOES), aims to mitigate production losses and revenue decline resulting from pipeline disruptions.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) outlined this strategy in a recent presentation titled “Stability in the Nigerian Energy Sector: Integrated Strategies for Infrastructure, Transportation, and Security.” The commission emphasized the need for innovative approaches to address the rampant crude oil theft and pipeline vandalism plaguing the country, causing significant economic losses.

According to data presented by Senator Ned Nwoko in October 2023, Nigeria incurred staggering losses amounting to trillions of naira due to oil theft, highlighting the urgency of tackling this issue. In response, the government has been exploring alternative evacuation methods to minimize disruptions caused by criminal activities targeting oil and gas installations.

The ACOES initiative primarily involves the use of barges and trucks to transport crude oil from production sites to injection/storage points, facilitating subsequent transportation to export terminals. By leveraging collaboration with industry stakeholders and deploying enhanced surveillance measures, the government aims to safeguard oil and gas infrastructure from criminal syndicates engaged in illegal activities.

The NUPRC highlighted the flexibility and cost-effectiveness of the ACOES, particularly for new entrants in the industry during Extended Well Test and early production phases. This temporary solution provides a vital lifeline for crude oil evacuation before the establishment of permanent infrastructure such as pipelines or export terminals.

Through stringent regulatory oversight and coordination with security agencies like the Nigerian Navy, the commission ensures the safety and security of barging and trucking operations in the upstream oil and gas sector. The success of the ACOES is evident in the reduction of production losses attributed to crude theft and the significant volume of crude oil evacuated and exported through virtual pipelines.

Chief Ukadike Chinedu, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, lauded the government’s efforts to combat oil theft. He stressed the importance of curbing this menace to protect Nigeria’s crucial revenue source derived from crude oil sales, emphasizing the need for sustained measures to address the challenge effectively.

As the government explores innovative solutions like ACOES, stakeholders remain hopeful that these initiatives will contribute to securing Nigeria’s oil and gas infrastructure and bolstering the country’s economic resilience amidst ongoing challenges in the energy sector.

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