Nigerian Pipeline Operator Partners with LiveEO to Tackle Oil Theft Challenges

A prominent oil pipeline operator in Nigeria engaged in the storage, generation, and transportation of oil is facing a persistent and pressing threat: the rampant vandalism and illegal activities targeting its critical pipeline infrastructure.

This issue is not isolated to the company but reflects a systemic crisis within Nigeria, one of the world’s largest crude oil exporters. 

The magnitude of this problem is staggering, with data from the Nigeria Extractive Industries Transparency Initiative (NEITI) revealing that between 2009 to 2020, approximately 619 million barrels of crude oil, valued at N16.25 trillion or $46.16 billion, were stolen or lost. This translates to an annual loss of $4.2 billion, underscoring the immense economic impact of such criminal activities.

NEITI's findings indicate that the cumulative losses during this period exceed the country's foreign reserves and are nearly tenfold the size of Nigeria's oil savings.

Beyond the financial toll, this illicit trade causes severe environmental degradation, endangering both human health and natural habitats. The risks escalate with the proliferation of illegal artisanal crude oil refining, which is highly susceptible to explosions and fires, leading to loss of human lives.

This is exemplified by the devastating incident in 2022 in southern Nigeria, where a blast at an illegal oil refinery resulted in over 100 casualties.

Pipeline monitoring challenges

The company has usually relied on conventional methods such as ground patrols and drones for pipeline monitoring as well as many other means such as community involvement.

However, these approaches alone have proven insufficient in addressing the widespread illicit activities the company is facing.

Ground patrols pose significant safety risks to personnel due to the presence of organized crime surrounding these operations, while drones struggle to adequately cover the company’s vast pipeline network in short lead times.

Consequently, both methods lack the scalability required for effective monitoring, often resulting in delayed detection of illegal activities. By the time breaches are identified, oil theft has already occurred, and the infrastructure has been damaged.

This prompted the company to seek a complementary solution to fill the scalability gap, enhance its risk monitoring capabilities, and ultimately prevent illegal activities that pose significant risks to its operations.

Game-changing solution: satellite-based monitoring 

In a strategic move, the company has partnered with LiveEO to address these challenges by implementing SurfaceScout Monitoring, a satellite- and AI-powered technology designed for monitoring oil and gas pipelines to protect them against third-party risks.

This collaboration enables the company to detect instances of vandalisms and unauthorized encroachments on its pipelines with greater frequency and efficiency. The company benefits from the following:

• Timely threat detection: SurfaceScout Monitoring conducts comprehensive inspections within the area of interest (AOI) every two weeks, ensuring the rapid detection of potential threats. Subsequently, the company promptly receives the insights within an average of 63 hours. Depending on the criticality of the identified risks, drones may be deployed for further inspection, thus allowing for swift on-ground intervention, if necessary. In emergency situations, the lead time is further reduced to 24 hours. 
• Actionable insights: Leveraging advanced analytics capabilities, SurfaceScout Monitoring facilitates the identification of potential threats by detecting suspicious objects, materials, and/or activities associated with illegal intrusion on key infrastructure and pipeline corridors. Equipped with this actionable intelligence, the company can promptly mitigate risks and minimize, if not prevent, damage to its infrastructure.‍
• Streamlined workflows: The insights provided are complemented by an end-to-end work management system, featuring automated work order generation and prioritization, delivered through an intuitive web app. Tasks are accessible via the mobile app, which offers an offline functionality ideal for remote and internet-deficient areas. This feature ensures seamless communication between supervisors and field crews operating in the most challenging environments.

Key result: Detection of three cases of illegal oil operations

To date, the company has successfully identified over 450 instances of third-party interferences over a three-month period, averaging 75 interferences per inspection cycle, through the use of LiveEO’s SurfaceScout Monitoring solution.

Notably, over 50% of these cases were associated with agricultural changes (Figure 1). 

The importance of detecting such changes cannot be overstated, especially given the tactics typically employed by perpetrators who operate covertly in remote and secluded areas such as forests, away from the scrutiny of authorities.

The clearing of vegetation in these areas serves as a clear indicator of preparatory actions undertaken by intruders for their operations, often involving the establishment of makeshift illegal oil refineries or oil bunkering sites, marked by excavated pits for temporary crude oil storage prior to transportation and refining.

Through SurfaceScout Monitoring, the company identified at least three cases linked to oil theft, allowing for timely intervention to address the issue before it escalated.

This underscores how SurfaceScout Monitoring empowers oil pipeline companies to detect suspicious activities at their inception, even during the initial phases of vegetation clearance, effectively thwarting potential theft attempts.

Through the adoption of this technology, they strengthen their ability to safeguard pipeline assets against these illicit activities, preventing infrastructure damages and financial losses. For instance, cost savings from preventing illegal tapping operations are estimated at $800,000 per connection point.

These findings underscore the crucial role of LiveEO’s SurfaceScout Monitoring solution in enhancing pipeline safety and integrity across the industry, highlighting its potential to contribute significantly to a more secure and reliable energy ecosystem in Nigeria.

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