Economic Sabotage: Rescuing Oil Majors, Nigerian National Petroleum Corporation with HDD technology

The twin problems of pipeline vandalism and illegal oil bunkering have constituted major threats to optimal operations by the oil majors and the Nigerian National Petroleum Corporation in the Niger Delta region. In this report, SOLA ADEBAYO examines the prospective impact of the latest technology, Horizontal Directional Drilling Rig, imported by an indigenous oil servicing firm, Fenog Nigeria Limited (from Germany), as a key effort in tackling the menace

The General Manager, Production of the Anglo-Dutch oil giant, Shell Petroleum Development Company in the Western Zone, Mr. Cor Zeglar, ignited the emotions of the former Chief of Defence Staff, Gen. Owoye Azazi, and his lieutenants sometime in 2006, when he said over 5,000 kilometres of the company‘s oil pipelines had been vandalised and carted away by the Niger Delta militants. The Bayelsa State- born Azazi, who visited 3 Battalion, Effurun, Delta State, the headquarters of the Joint Task Force in the Niger Delta, Operation Restore Hope, shortly after he assumed the command of the armed forces, had paid a courtesy call on Zeglar apparently to ascertain how the federal security agency had been able to tame the economic saboteurs, especially pipeline vandals and oil thieves in the areas under its jurisdiction in the Niger Delta.

Zeglar told his visitors that the operation of the oil firm, particularly in the western axis, made up of field locations in Bayelsa and Delta states, had been grounded due to the menace of pipeline vandalism and crude oil theft. To wrap up his thought provoking lecture, the SPDC top brass said that the company was producing next to nothing in the western axis. He added that several millions of dollars would be required to replace the pipelines to pave the way for resumption of operations in the area. It was gathered that SPDC could not operate at all the production platforms located in the swamps of the Niger Delta for almost four years. Consequently, crude oil production by the company dropped sharply from 1.105million barrels per day in 2005 to 360,000 barrels per day in 2008.

The ugly development was not peculiar to SPDC alone. Other oil majors and the Nigerian National Petroleum Corporation experienced similar threats to their operations in the region. Specifically, findings have shown that Pipelines and Products Marketing Company, a subsidiary of NNPC, lost petroleum products valued at about N34bn and N62bn due to the vandalism of its Warri/Benin and Mosimi/Ibadan delivery lines respectively. The controversial Chanomi Creeks pipeline, which feeds Warri and Kaduna refineries with crude oil had also been ruptured on many occasions, resulting in stoppage of operations by the crude refining plants.

The managements of the American oil conglomerate, Chevron Nigeria Limited and the Nigerian Agip Oil Company also freely recounted similar tales of woes. Just in November 2008, Abiteye/Escravos pipeline of Chevron was blown up by some yet-to-be identified persons in the coastal area of Warri South West Local Government Area of Delta State. Consequently, the swamps operations of CNL were shut down, leading to production shut-in from six production platforms in the area. Barely a month after, the vandals struck again when they blew up a major delivery line belonging to NAOC in Burutu Local Government Area of Delta State.

Apparently worried by this recurrent trend of losses, including lives and colossal sum of money as a result of the unwholesome acts of sabotage, an indigenous oil servicing company, which operates in Warri, Delta State, Fenog Nigeria Limited, has imported Horizontal Directional Drilling technology from Germany to secure oil pipelines. Already, two HDD rigs have arrived at the company‘s premises along Airport Road, Warri, to put an end to the agonies of the oil multinationals and NNPC.

An expert in oil industry in the region said the arrival of the HDD rigs, kitted with technology to undertake horizontal drilling might have signalled the end of pipeline vandalism and crude oil theft in the Niger Delta. The rigs were designed to deal with the menace and secure oil pipelines.

According to the source, the HDD rigs could lay oil pipelines as far as 25-metre depth.

The industry source stated that the management of Fenog imported the rigs following the success of the innovation in the oil industry in the member nations of the Organisation of Petroleum Exporting Countries, adding that the rigs would assist the oil majors and the NNPC to salvage their oil pipelines which were vulnerable to incessant attacks by oil thieves and militants in the region.

It is needless restating that the activities of vandals and oil thieves had resulted in oil pipeline fire and the attendant loss of many lives in different parts of the country, especially in Delta and Lagos States.

Investigations revealed that vertical drilling by the oil companies facilitated access to their facilities by vandals and oil thieves. The oil pipelines are planted just one metre below, a development which encouraged the saboteurs to easily tamper with them.

The source added, ”The vulnerability of the oil pipelines, especially those belonging to NNPC has always encouraged vandalism of oil equipment and in the attendant fire outbreaks, many lives are lost. But with this machine, NNPC and the oil multinationals can operate unhindered and safeguard the pipelines against threat because this technology would take the pipelines to 25-metre depth as against one metre presently obtainable in the industry.

”This (HDD rig) is a very high technology equipment and it can drill horizontally as against the prevailing vertical drilling in the industry which merely laid pipelines on the surface. The oil majors, especially Shell and Chevron and NNPC can secure their pipelines, particularly the pipelines in the swamp locations, by making use of this rig which can bury oil pipes away from the prying eyes of the vandals and oil bunkerers.

”The oil majors have been spending almost half of their budgets on security in the Niger Delta and it is hoped in the oil industry in the region that HDD rig would reduce spending on security and repair of vandalised pipelines.

”Those pipelines that have been uprooted can be planted 25 metres below the surface level by the HDD rigs,” the source added.

Explaining the operation of the HDD rig, the Fenog‘s Material, Research and Equipment Manager, Dr. Pressy Jombo, said it could lay oil pipes without excavation or trenching.

Jombo, an engineer, said the technology was designed to tackle willful damage to oil pipelines by economic saboteurs.

He said, ”Fenog, which is one of the foremost indigenous oil servicing firms in the oil industry in Nigeria has blazed the trail again as it has brought in HDD Technology from Germany. This technology was designed to tackle pipeline vandalism and oil bunkering. The machine is meant to safeguard the pipelines.

”One of the major features of the machine is that it can lay pipelines as far as 25-metre depth on its own without excavation or trenching. We brought the machine into the country because the management of Fenog felt that it is a good technology to tackle pipeline vandalism and reduce the threat to oil and gas pipelines.

”This technology has been tested in so many oil producing countries and members of OPEC and the management of Fenog was compelled to introduce it in Nigeria because of its success story elsewhere.

”The visibility of the oil pipelines made them accessible to vandals and oil thieves. The HDD technology would curtail their antics.”

Jombo said that the machine would be deployed in the service of the majors and the Nigerian oil conglomerate, adding that crude oil theft and pipeline vandalism would soon become things of the past in the Niger Delta following the advent of the HDD rigs in the area.

The oil thieves and vandals are more daring and with the level of sophistication they have attained in carrying out their nefarious activities, time will tell if the HDD rigs could curtail their excesses.

The oil majors and NNPC can at least give the technology a trial to ascertain the veracity of the claims of its efficacy in dealing with pipeline vandalism and oil theft.

Its success story will at least lead to efficient operations by the oil multinationals and NNPC as well as reduce spending on security and repair of oil pipelines.