FG: Nigeria lost $3.27bn to crude oil theft in 14 months

FG: Nigeria lost $3.27bn to crude oil theft in 14 months

March 25, 2022 Uncategorized 0

The Federal Government has revealed that about $3.27 billion worth of crude oil has been lost to vandalism over the past 14 months, saying oil theft has become a threat to the country’s corporate and economic existence.

This was contained in a presentation by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) during a stakeholders’ engagement on oil theft in Abuja on Thursday.

Speaking at the event, the Chief Executive of NUPRC, Engr. Gbenga Komolafe, who said government was extremely worried about the tragic situation, noted that the industry was thinking of transporting crude oil from fields to export terminals by trucks.

Komolafe stated that most of the crude oil losses came from Bonny Terminal Network, Forcados Terminal Network and Brass Terminal Network.

He further listed factors that were aiding the criminal activities to include economic challenges, inadequate security, poor surveillance, poor community engagements, exposed facilities and stakeholder compromises.

The NUPRC boss, who noted that due to the high level of theft, the country has been unable to meet its OPEC production quota, said government was determined to end the menace so that the country could benefit from the rising price of oil and also protect the environment from oil spills.

He said: “The issue of oil theft has become a very worrisome issue to the government of Nigeria and I believe to you as investors too. It is important for government and the oil companies’ to work together and resolve the issue, especially on the agreed volume of oil lost to vandals as the issues strike at the heart of Federation revenue.

“You will recall that in the last one week we have set up a crack team for us to determine the accurate figure because as a government we cannot continue to act on the basis of an abstract or inaccurate figure in dealing with an important issue as crude oil theft because the issue goes to the heart of Federation revenue.

‘The concern of the government is to increase our national oil production. Basically, we are an oil economy and when the upstream is sick it affects the wellbeing and the health of the country.

“The situation that is happening in the upstream is getting to the level of threat to the existence and wellbeing of Nigeria. As a responsible regulator we are very concerned about it. We have been doing a lot and we are not relenting. We will do everything possible to increase oil production in a manner that will make the nation benefit from the upward swing in the international price of crude oil.”

On his part, the Chairman/Managing Director of ExxonMobil, Richard Laing, who represented the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce, noted that although the issue was not new, it has grown from just oil theft to organized criminality with sophisticated operation.

“As an industry, I know how hard my colleagues work to produce products that we need and to suffer the level of theft that we have is disheartening. But more importantly it is a threat to investments, a threat to the health of the industry and wealth of the nation.

“It is important that the stakeholders integrate their activities and their thoughts. As OPTS we have met with a number of stakeholders over the last several months and we want to make sure that whatever we do is joined up and effective.

“The language is very important and I think we use theft rather quickly. I don’t think this is theft, this is organized criminal activity. The level of sophistication in terms of tapping into the pipelines, the distributions, efforts required to move hundreds of thousands of barrels a day isn’t some guy coming along and taping into a pipeline and taking container crude oil. It is organized criminality”, Laing stressed.

Also speaking, the Independent Petroleum Producers Group (IPPG), represented by the Managing Director of Waltersmith Petroman, Chikeze Nwosu, disclosed that about 82 percent of its oil production was stolen in February 2022.

While expressing worry that independent producers were facing existential threat, Nwosu explained that the oil theft challenge has grown from what it used to be in the past of about 4 percent to a high of 91 percent in December, 2021, adding that the situation was getting worse despite all effort to curb it.

“The TNP (Trans Niger Pipeline) is the major issue. We have seen crude theft grow from single digit percentages to reports of 91 percent in December for some of the operators who produce into the TNP, 75 percent in January and the February report we got has an average of 82 percent.”

About the author

Jude Igbanoi:

0 Comments

Would you like to share your thoughts?

Your email address will not be published. Required fields are marked *

Leave a Reply