Nigeria Lost $41.9bn In 10yrs To Oil Theft – NEITI
Nigeria Extractive Industries Transparency Initiative NEITI) has said that Nigeria lost over $41.9 billion to theft of crude oil and refined petroleum products between 2009 and 2018. A breakdown shows that Nigeria lost $38.5 billion on crude theft alone, $1.56 billion on domestic crude and another $1.8 billion on refined petroleum products within the period in review.
NEITI further disclosed that Nigeria losses an average of $11million daily which translates to $349 million in a month and about $4.2 billion annually to crude and product losses arising from stealing, process lapses and pipeline vandalism.
“While figures from government put the loss at between 150,000-250,000 bpd, data from private studies estimate the figure to be between 200,000-400,000 bpd. This implies that Nigeria may be losing up to a fifth of its daily crude oil production to oil thieves and pipeline vandals”, NEITI reported.
In its latest Policy Brief titled “Stemming the Increasing Cost of Oil Theft to Nigeria” released in Abuja on Tuesday, NEITI urged the federal government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities, and other creative strategies to combat oil theft in Nigeria.
The extractive agency stated that to curbing oil theft in the country’s oil and gas industry has become both necessary and urgent to expand revenue generation, given the current dwindling revenues.
On comparative analysis of the size and implication of the losses to the country’s current dwindling revenue profile, NEITI renewed its appeal to the government to curb oil theft to reduce budget deficits and external borrowing. The transparency agency stated that the value of crude oil and allied products so far lost are equal to the size of Nigeria’s entire foreign reserves. “Stemming this haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs”, the report stressed
What the country lost in 20 months in fiscal terms is enough to finance the proposed budget deficit for 2020; in 15 months to cover total proposed borrowing or increase capital budget by 100% and in five months to cover pensions, gratuities and retirees’ benefits for 2020, the agency noted.
“In terms of volume, 138.000 barrels of crude oil was lost every day for the past 10 years, representing 7% of average production of two million bpd. Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009-2018. What is stolen, spilled or shut-in represents lost revenue, which ultimately translates to services that government cannot provide for citizens already in dire need of critical public goods,” the agency said
The report examined the reasons for increase in incidence of crude and product theft and reviewed current containment strategies; These include, inadequate legal sanctions to serve as deterrent, stringent laws, deployment of technology designed to swiftly detect, localize and cut off flows to specific pipelines as soon as leakages occur.
The agency also recommended operational, security, legal and global governance instruments to combat crude theft. Among them is efficient response and containment time in checking oil theft and pipeline vandalism. NEITI called for forensic investigation into the activities of syndicates operating in the oil and gas industry, given the increasing rate of stealing and sophistication of the illicit trade.
By Chibisi Ohakah