$2bn lost to oil theft in one year – NEITI

Nigeria lost over $2bn to crude oil theft and vandalism in 2020, prompting the federal government’s revenue from the oil and gas industry to plunge by 40 per cent, the Nigeria Extractive Industries Transparency Initiative has said.

NEITI disclosed this in its latest oil and gas industry report made public by its executive secretary, Orji Ogbonnaya Orji, in Abuja on Monday.

The report revealed that Nigeria earned $20.43 billion from the oil and gas sector in 2020, representing a decline of 40 percent compared to the 34.22 billion realised from the sector in 2019.

On remittances to the federation account from the sector, NEITI disclosed that $14.65 billion, representing 71.17 percent of the total earnings in 2020, was remitted to the account, while total aggregate financial flows from the sector to government in 10 years (2011-2020) was $394.029 billion.

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According to the report, total crude oil production in 2020 was 646.7 million barrels (mmbls), representing a 12 percent decrease when compared to the 735.24mmbls produced in 2019.

It said out of the total production in 2020, 648.48mmbls were lifted, and this was 11.85 percent lower than the 735.66mmbbls lifted in 2019.

On domestic crude allocation and consumption, NEITI said 107.746mmbls was managed by the NNPC under the Direct Sale Direct Purchase arrangement.

It also revealed that the value of the crude exchanged under the DSDP arrangement was $6.7 billion, while the value of the refined products received for local consumption was $6.03 billion, indicating a variance of $134.78 million.

On oil theft and crude losses, the organisation said it made an assessment based on the data provided to it by 22 of the 69 covered companies.

According to the result of the assessment, 39.16mmbls of crude valued at $44.73 million (N15.71 billion) was stolen with 349 cases of pipeline vandalism recorded in 2020, compared to the 1,387 cases of vandalism reported in 2019.

On gas production, the gas sub-sector contributed over $1.5 billion to the federation account while the total gas production in 2020 was 3.01 million cubic feet.

The report said 64 percent of the gas produced was sold, eight percent was flared and four percent unaccounted for.

NEITI said the oil and gas sector contributed only 8.16 percent to the total GDP in 2020, representing a decline of 0.46 percent when compared to the 8.62 percent recorded in 2019.

The report also showed that the sector dominated the country’s exports in 2020, contributing about 75 percent (N9.44 trillion) of the total export value of N12.52 trillion.