Nigeria: Pipeline Runs Dry As Recurring Oil Theft Plagues Country￼
Oil theft and pipeline vandalism has become so rampant in Nigeria, and has affected the production status of the country. The situation has often forced operators to shut down crude links for repairs and even declare force majeure on crude loadings because oil couldn’t reach terminals on time.
In the report, Bloomberg said the pipeline targeted in the latest oil theft, Trans-Niger Pipeline, has not been formally shut yet, because they were sharing information that has not been made public yet.
By the agency’s estimates, the Trans-Niger Pipeline, with its capacity of transporting 180,000 barrels per day (bpd), accounts for around 15% of Nigeria’s latest daily average oil production.
Oil theft has been a never-ending issue in Nigeria’s oil industry for years, crippling supply and production and making international majors warier of investing in production assets in Nigeria’s onshore.
While international oil companies like ExxonMobil and Shell are divesting, lack of investment and capacity has prevented Nigeria from reaching its target production under the OPEC+ agreement for more than a year. Nigeria has been the biggest laggard in the production pact for several months.
As at June this year, Nigeria is recorded with pumping 500,000bpd below its OPEC+ target. Nigerian crude oil production averaged 1.238million bpd last month, according to OPEC’s latest Monthly Oil Market Report (MOMR), while Nigeria’s June quota was 1.772 million bpd.
Officials said unlike other crude oil producers, Nigeria has not been able to take advantage of the multi-year high oil prices this year. Nigerian oil revenues have come in 61% below target for the first four months of 2022.
That’s despite crude oil trading at highs not seen in years. Nigeria continues to battle oil theft, pipeline vandalism, and most critically, high gasoline prices, which the country subsidizes.