• Wednesday, May 22, 2024
businessday logo

BusinessDay

N556bn crude oil lost to vandalism, others in three months – NNPC report

International crude oil price crucial to Nigeria’s stock market growth in 2015

Nigeria lost crude oil valued at about N556 billion between August and October this year due to pipeline vandalism, community interferences, sabotage of oil facilities, among others, the latest industry data obtained from the Nigerian National Petroleum Company Limited showed.

Data compiled from the Crude Oil Marketing Division report of events that affected oil production in August, September and October 2021 indicated that the country consistently posted losses during the period under review.

In August, September and October 2021, the average costs of a barrel of Brent, the crude against which Nigeria’s oil is priced, were $70.75, $74.49 and $83.54 respectively, according to data from Statistica, a global statistical firm.

Crude oil volumes lost due to various production shut-ins caused by vandalism, sabotage and other challenges in August, September and October were 6,680,620 barrels; 6,362,700 barrels; and 4,824,946 barrels respectively.

At the official exchange rate of N411.95 to the dollar, the worth of the crude volumes lost by the country in August, September and October were N194.71bn, N195.246bn and N166.05bn respectively.

This implies that the value of crude oil that was lost by Nigeria during the three-month period was about N556bn.

This came at a time when the country’s debts had been increasing, with the Federal Government sourcing for funds by borrowing several billions of dollars.

Read also: Oil holds near $80 a barrel as Omicron fears begin to ease

Also, humongous sums had been spent by the government in its bid to service the country’s debts and so much have also been budgeted for debt servicing in the coming year.

On December 16, 2021, for instance, BusinessDay reported that Nigeria spent N2.49tn on debt-servicing payments in the first nine months of this year, according to data from the Debt Management Office.

Meanwhile, further analysis of the reports from the NNPC showed that 20 incidents led to the loss of the 6,680,620 barrels of crude oil recorded in August this year due to various production shut-ins.

It was also observed that eight crude oil terminals were affected in August, as production was curtailed at the facilities during the period.

The affected terminals in the reviewed month include Forcados, Sea Eagle, Brass, Yoho, Qua Iboe, Escravos, Ajapa and Otakikpo.

Explaining some of the incidents that curtailed production in one of the terminals, for instance, the NNPC said, “Energia (an oil firm) injection into Brass line (was) suspended due to pipeline damage.

“Pillar injection into Brass (was) suspended due to third party interferences on NAOC (Nigeria A grip Oil Company) Akiri pipeline.”

For the month of September, it was observed that 18 incidents warranted the loss of 6,362,700 barrels crude oil, following production shut-ins recorded in the reviewed month.

A total of nine terminals were affected in September, including Forcados, Sea Eagle, Brass, Yoho, Qua Iboe, Escravos, Urha, Ajapa and Otakikpo.

On some of the incidents that led to the crude oil losses in September, the NNPC stated that “production (was) curtailed due to pipeline outages” at the Forcados Terminal.

It also noted that “Energia injection into Brass line (was) suspended from September 1 to 30, 2021 due to pipeline damage.”

Findings from the NNPC reports of events that affected production in October 2021, however, showed that the incidents that led to crude oil production shut-ins, reduced to 11 during the month.

But eight terminals were affected as the total loss recorded in October was 4,824,946 barrels of crude oil, which was the lowest among the figures posted during the three-month period.

The affected eight terminals include Forcados, Bonny, Odudu, Brass, Yoho, Urha, Ajapa and Aje.