…NEITI reveals that Nigeria has lost $42 billion worth of crude theft.
…Undetected illegal pipeline which technically export around 250,000 barrels of oil per day was in operation for nine years.
-By Felix Douglas
Nigeria is unable to meet its production quota due to crude oil theft, OPEC data for instance shows Nigeria produced 1.3 9 million barrels per day as against its allocation of 1.735 barrels per day.
Apart from the period of the Niger Delta militants, the losses sustained are not worst as it is now, whereas the Buhari administration has failed to stop the menace even although efforts have been made by the government.
The Speaker of Nigeria’s House of Representatives, Femi Gbajabiamila, put it bluntly on Friday, after President Mohammadu Buhari presented his 2023 budget bill at the National Assembly, that “Nigerians no longer want to hear about crude oil theft. The question has now become what are we doing about it?
Therefore, we are urging a swift and systemic overhaul of the systems in place to protect the country’s oil and gas resources.”
Record available shows the menace of crude oil has grown in proportion impacting the availability of foreign exchange. The 2023 budget has a deficit amounting to N10.78 trillion.
To understand the extent of the losses, Nigeria oil price of $103 per barrel, as against the benchmark of $73 per barrel, implies the country without any additional $30 in savings on a projected production in monetary terms, this prediction means the country would have generated an extraordinary annual $8.568 million.
According to Nigeria’s Minister of Finance, Zainab Ahmed, “The draft enters for 2023 to 2025, Nigeria could only release about N799 billion in the first quarter of 2022 with N10 billion in crude oil revenue in the first six months of 2022 and the country would have had a deficit budget or the increase in oil prices. There would be no need of borrowing or selling any national assets.
Reacting to the situation, a Petroleum Economist, Professor Wumi Iledare made it known that “When the country is not able to get the type of revenue that it has been used to, the implication for the future oil and gas management is scary and oil and gas to me continue to be the engine that we can depend on to drive our economy.”
On his part, the Minister of State for Petroleum Resources, Chief Timipre Sylva, admitted that about 350 to 400,000 barrels of crude oil are stolen on a daily basis during the period under review.
Similar statistics presented by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), shows Nigeria lost $3.2 billion in crude oil theft between January 2020 to February 2022.
In his words, Sylva said: “Nigeria has lost $42 billion worth of crude theft. This is what Nigeria Extractive Industry Transparency Initiative (NEITI) was able to extract from data supplied by six big companies because some companies are even afraid to disclose what they have lost or they are no longer in position to disclose what they have lost. Nigeria was producing 2.5 million barrels daily at the moment, we are able to produce less than a million barrels.”
The extent of the theft was confirmed recently when the discovery of pipeline illegally connected to one of Nigeria’s major oil export terminals into the sea. The illegal pipeline which technically export around 250,000 barrels of oil per day, stretches kilometres and it has been operating undetected for nine years.
The Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL), revealed, “We found a connection by the help of these private contractors that were put in place, running four kilometres from our major trunk Forcados line, four kilometres into the sea and with a loading port that has probably operated in the last nine years.”
For many, Nigeria economic and financial woes as seen in the massive theft of its major foreign exchange resources as evidence of the high level of corruption and mismanagement of the country.
Gbajabiamila asserted that it is an attack on the sovereignty and continued survival of the Nigerian state.
However, the recent discovery of four kilometre illegal crude oil pipeline in Forcados area of Delta State, Niger Delta residents have expressed optimism that the war against crude oil theft can be won but necessary support from the military and government is needed to make the process work.
Notwithstanding the menace of crude oil theft has been a major problem in the Niger Delta region. The discovery of illegal the pipeline in the Forcados area of Delta State is one of such nefarious activities that has been ongoing for almost a decade before it was uncovered.
Giving an insight to the ugly situation, Governent Ekpemupolo, also known as Tompolo, who was awarded a pipeline surveillance contract by the Federal Government, was of the view that the discovery was joint efforts of the Nigerian security agencies and in spite of rain, they were able to trace the pipeline. “We have found over 58 points that have been tapped in Delta and Bayelsa states.”
With this breakthrough, stakeholders in the region are optimistic that the war against crude oil theft will be won.
In his words; Tompolo said, “With the way we are going, we are getting cooperation from all the security agencies both from Federal and states governments, by the grace of God in no distance time, we will be able to stop the menace.”
Majority of residents living in communities whose environment have been polluted by the activities of pipelines vandals and oil theft, yearn for an end to the menace of oil theft.
While some were wondering how the crude oil theft was possible with high technology involved for almost a decade, without being detected posing severe threat on the country’s resources at a time when it should be earning more proceeds owing to the crisis between Russia and Ukraine.
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