Nigeria Lost N1.4tn To Crude Oil Theft In 14 Months—FG

Between January 2021 and February 2022, Nigeria lost a whopping sum of $3.2bn to crude oil theft, the Federal Government has said.

The amount when converted by the official N416.25 to a dollar exchange rate translates to about N1.36trn.

The figure was revealed during a meeting on crude oil theft between the Nigerian Upstream Petroleum Regulatory Commission and Oil Producers Trade Section, as well as the Independent Petroleum Producers Group in Abuja.

OPTS is a body comprising IOCs operating in Nigeria, while IPPG is an association of indigenous exploration and production companies.

In the presentation by the Commission, it was revealed that oil theft rose significantly between 2021 and 2022, with over 90 per cent of total crude produced at the Bonny Terminal stolen in January 2022.

In its report on the trend in oil theft, the NUPRC said that based on its findings, average monthly value loss for the period is about $233.99m, while the average daily value loss for the period is about $7.72m.

According to the Report, losses are recorded mainly from Bonny Terminal Network, Forcados Terminal Network (and) Brass Terminal Network.

It stated, “Total value loss for the period January 2021 to February 2022 is about $3.27bn.

“Average monthly value loss for the period is about $233.99m. Average daily value loss for the period is about $7.72m.

“Losses are mainly from Bonny Terminal Network, Forcados Terminal Network (and) Brass Terminal Network.”

It explained the factors that aided crude oil theft to include inadequate security, poor community engagement, economic challenges, poor surveillance, stakeholder compromises and exposed facilities.

On the impact of this menace, the NUPRC in its report stated that government revenue was adversely affected, as revenue accruing to the operators had been impacted negatively
The NUPRC said there had been a loss of value arising from surging costs due to frequent repairs of damaged facilities.

It stated that spillages and leakages were mostly caused by activities of saboteurs leading to environmental degradation and deprivation of source of livelihood to indigent people.

It, however, stated that actions were being taken to mitigate crude oil theft and pipeline vandalism, as a work team comprising the regulator and operators was set up in August 2021.

“The work team was set up to deliberate on workable solutions to mitigate crude oil losses, identify various responsible parties along the crude oil loss value chain and propose improvement areas for effective surveillance,” the NUPRC stated.

In his comment at the event, the OPTS Chairman, Rick Kennedy, who is also the Managing Director, Chevron Nigeria Limited, and represented IOCs at the meeting, described the oil theft across the country as an organised criminal activity.

Kennedy, who was represented by the Managing Director, ExxonMobil Nigeria, Richard Laing, said, “When I say it is an organised criminality, the sophistication of the engineering involved points towards a high degree of sophistication and technology, as well as the distribution.

“I think we’ve just got to be honest and accept that this is not theft but more than that.”

The IOCs called for a quick solution to the menace, stressing that the development posed a serious threat to their existence.

The Chief Executive, NUPRC, Gbenga Komolafe, said the meeting was organised by the commission to hear what the IOCs and their counterparts in Nigeria had to say about the recent menace of oil theft.

He said, “The meeting was convened to get the opinion of stakeholders, especially the investors, which include the OPTS and IPPG. It is the concern of the government that we increase our oil production.

“Because when the upstream is sick, it affects the well-being and health of the country. The situation is happening in upstream and is a threat to the existence and wellbeing of the economy.

“So we are very concerned about this and we’ve been doing a lot and will ensure that we do everything possible to increase oil production in a manner that will make the nation benefit from the upward movement in the international prices of crude.”