Nigeria Loses $5.9 billion to Oil Theft

0 310

Waziri Adio, the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), has revealed that Nigeria has lost over USD5.9billion in 2013 to oil theft.

According to him, USD4.7billion was lost to oil theft and pipeline vandalism from the USD5.9billion and N20 billion was lost due to delay in payment made by NNPC and its subsidiaries. “NNPC and its subsidiaries were given 90 days to pay N20 billion, though they paid the amount but could not meet up with the credit grace period given to them by the government. If we calculate all the money that the country lost and put in fixed deposit at 12 per cent rate, on one transaction, the country lost N13 billion and N7 billion on the other hand,” he said.

[Also Read] Nigeria Lost $41.9bn In 10yrs To Oil Theft – NEITI

Adio said that USD600million was underpaid due to under-assessment, owing to non-renewal of the expired MOU with some oil companies.

“We signed MOUs with some oil companies that expired and because we did not renew them, the oil companies used a particular pricing methodology called realizable price. Government wanted oil companies to use official selling price; if we calculate the difference between official selling price and realizable price, the country lost 599 million dollars in one year,” he disclosed.

Adio also recalled that the country lost 5.18 billion dollars to crude oil for Product Swap and Oil Shore Processing arrangement in one year.

“It means that we give them crude and they give us products, and then calculate the value of the product received, processing allowance and cost of freighting, clearing, demurrage. We calculated the value of products received and compared to crude given to them, and then we realized that USD518million was lost,” he said lamentably.

[Also Read] Nigeria lost billions of dollars to sharp practices in oil, gas in 2013- NEITI boss

“Based on our recommendations, the present government has cancelled the arrangement to save money,” he added.

On non-remittance of USD3.8billion by NNPC, Adio noted that the company divested eight assets owned by the country.

He said: “The country owned 55 per cent of the assets and Shell owned 45 per cent; the country’s assets were valued at USD1.8billion from it 55 per cent and Shell USD2.72billion from its 45 per cent. As if that was not bad enough, they divested the assets to NPDC and it paid USD100million out of the USD1.8billion.”

[Also Read] NEITI urges review of oil producing agreements

“The proper value of what Shell got from its own 45 per cent would have been USD3.4 billion, meaning the assets were valued at discounted price at a loss of almost 50 per cent. And USD100million out of USD1.8billion was paid and NPDC took full ownership of the assets,” he stated

Adio recalled that NNPC collected USD1.29billion outstanding from NLNG in 2013 and acknowledged receipt but did not remit the fund into government coffers.

However, he said that NEITI was not keen in embarrassing and sending people to jail but urged things to be done in transparent manner.

More Nigeria Oil and Gas Industry News on Orient Energy Review.

Leave a Reply