Nigeria navy chief says oil law will curb theft, sabotage

Nigeria's navy chief said Thursday that a controversial bill to overhaul the country's energy sector would help curb criminality in the oil-rich Niger Delta and urged lawmakers to pass it.

Legislation to overhaul Africa's largest oil industry has been in the works since 2008, with the president sending the latest draft to lawmakers in July 2012.

The Petroleum Industry Bill has powerful critics, including foreign oil majors like Shell and ExxonMobil who say its fiscal terms are too tough, but top security chiefs have previously stayed out of the debate.

"We appeal to our senators to pass the Petroleum Industry Bill," Vice Admiral Dele Joseph Ezeoba told a conference of industry leaders in Lagos.

"This law has the capacity to solve the problem of pipeline vandalism, crude oil thefts as well as illegal refineries in the country," he said.

He later specified that provisions which seek to boost revenue channelled to communities in the Niger Delta would reduce the incentive to steal.

The federal government has defended the terms of the bill, including the tax regime, but has said it will try to address some of the concerns voiced by oil majors.

All key industry players agree that a new law is needed to create more certainty in the sector, but a compromise has been elusive.

"The bill may not be a perfect document ... but every stakeholder, including the multinational oil companies, government and host communities have one thing or the other to benefit from the law," Ezeoba said.

The navy is one of the security agencies responsible for patrolling the Niger Delta's creeks, where much of the pipeline sabotage and theft occurs.

Some estimates say that Nigeria looses roughly $6 billion a year through oil theft.

A number of multinationals have recently announced asset sales in Nigeria, specifically onshore facilities, where theft and pipeline sabotage has cut into production.

Nigeria currently pumps roughly 2 million barrels per day, down from an all-time high of 2.7 mbd one year ago, with the theft and sabotage threatening to knock Nigeria from its position as Africa's top oil producer.

The Niger Delta has been devastated by decades of oil-related pollution, crippling local industries like agriculture and breeding huge resentment among the population.

A 2009 amnesty deal with rebels in the region led to a sharp decline in unrest but criminal activity has flourished.

Despite its vast resource wealth, most Nigerians live on less than $2 a day.