Nigeria lost N4.3 trillion due to oil theft over a span of five years – FG

During a five-year period, 7,143 pipeline vandalism incidents resulted in the theft of nearly N4.3 trillion worth of crude oil, according to a Federal Government study released on Monday.

Breaking news on “Bolstering Regulations, Technology, and Security for Growth” at the Nigeria International Pipeline Technology and Security Conference, held in Abuja, was announced. Organisation of the meeting was the Nigerian Pipeline Professionals Association.

Oil theft and losses in Nigeria have turned into a national emergency, according to information disclosed during the conference by the Nigeria Extractive Industries Transparency Initiative, an organisation within the Federal Government.

Oil theft is an urgent problem that poses a serious threat to oil exploration and exploitation and has a significant negative impact on economic growth, business opportunities, and oil companies’ profit margins, according to Ogbonnaya Orji, Executive Secretary of NEITI.

He supported his statements with data from the agency’s reports, saying: “NERTI revealed that during the previous five years, from 2017 to 2021, Nigeria recorded 7,143 cases of pipeline breaks and intentional vandalism, resulting in the theft of crude and product losses of 208.639 million barrels valued at $12.74 million or N4.325 trillion.

“Nigeria spent N471.493 billion on pipeline maintenance and repairs during the same period, according to NEITI reports.”

Orji noted that the industry produced 19,171 employment, accounted for 72.26 percent of Nigeria’s total exports and foreign exchange earnings, and generated 40.55 percent of government revenue, according to NEITI’s 2021 Oil and Gas Industry Report, which was published in September.

“But for us at NEITI, it is undeniable that, in spite of the strategic contributions, the nation has not yet reaped the full benefits of its natural gas and oil resources because of oil theft, losses resulting from pipeline vandalism, breaches in pipeline integrity, overt sabotage, and overall localised insecurity.”

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“Oil theft is carried out primarily by pipeline clamping, illegal connections on major pipelines, exploitation of abandoned oil wellheads, pipeline breakages, and vandalism of key national assets to illegally syphon crude into waiting vessels stationed in strategic terminals, according to NEITI’s reports over the years and our most recent insights from our membership in the Special Investigative Panel on Oil Theft and Losses.”

“These illicit activities typically occur in an environment of collective cooperation and a plot of silence,” the head of NEITI said.

He emphasised that a large number of pipeline association members were in fact directly or indirectly involved in supplying the expertise needed to commit oil theft.

You understand that not just anybody can establish illicit links or clamp down on pipelines, for example. As a result, by neglecting to impose strict guidelines and suitable penalties to monitor member participation, your association has become mainly complicit.

As an illustration, NEITI has made empirical data on oil theft and losses in the public domain. Between 2009 and 2020, 619.7 million barrels of petroleum were valued at $46.16 billion, or N16.25 trillion.

Additionally, from 2009 to 2018, Nigeria lost 4.2 billion litres of petroleum products from refineries, which is equivalent to $1.84 billion at a rate of 140,000 barrels per day.

Hence, according to Orji, “the total value of crude losses between 2009 and 2020 is higher than the size of the country’s foreign reserves and nearly ten times Nigeria’s oil savings in Excess Crude Account.”

In an environment where pipeline vandalism, oil theft, and overall insecurity prevail in the oil-producing towns, he warned conference attendees, Nigeria’s economy cannot expand.