220 million barrels of oil unaccounted for in 10 years

A total of 222,437,870 barrels of crude oil was unaccounted for by the Nigerian government in the period between 2004 and 2014, a report by the watchdog , Nigeria Extractive Industry Transparency Initiative (NEITI) has revealed.

At an average cost of $100 per barrel over the period, the country is estimated to have lost a total sum of $22 .04 billion, owing to her inability to account for the said volume of oil between 2004 and 2013.

This revelation is coming on the heels of the rejection by Austin Avuru , managing   director of Seplat Petroleum Nigeria, of claims made by  multinational oil  companies on the volume of crude oil lost to theft.

Avuru said the  independent oil producers believe that the volume of  crude oil lost to theft daily,  could not be more than 20,000 barrels. He added that the big time operators in the country were taking Nigeria for a ride, hence the outrageous figures they put forward as stolen.

Zanaib Ahmed, the NEITI executive secretary, who spoke at a management workshop,  with the theme, “Fluid Accounting and Metering Issues in the Nigerian Oil and Gas  industry” organised by the  Nigerian Association of Petroleum Explorationist (NAPE) said that the agency is  confronted   with  different production   figures, as it  gets  different figures from both  the  Department of   Petroleum Resources (DPR) and oil  companies.

 Ahmed, who was represented by Tariye George, general manager, Technical Services, however said efforts were currently being made to reconcile areas where these differences existed.

She further said crude oil losses also occurred through the meters at the terminals, and therefore   called on government to pay urgent attention to the need to have functional meters at the export   terminals.

She further said that the agency was doubtful about the figures of losses alleged by oil companies, and expressed the opinion that it would be difficult for some of the companies to sustain their businesses if the figures were factual.

She stressed that good hydrocarbon measurement was hinged on three legs – fiscal regime, metering infrastructure and regulation. “Crude oil production figures from the producing entities need to be tied to the volume that passed through available metering infrastructure for proper accountability,” she said.

Commenting on the losses recorded  either on account of crude oil  theft, or  losses  through faulty metering in the industry in the  last 10  years, Austin Avuru,  said the huge losses started in 2009 when third  party producers infiltrated the industry and that since that  time,  the  volume of crude lost   has been on the  increase.

Avuru said even so, the independent oil  producers  did not believe  in the figures  churned  out  by multinational oil  companies as being the volume of  crude oil  lost on account of stealing.

“We have tried to look at certain parameters and have concluded that the volume of crude oil lost to oil theft is not more than 20,000 barrels per day”.

He bemoaned the way some  government agencies  have taken  over the functions of  DPR , observing  that it was  only  DPR  that was empowered by law to give  account of anything that has to do with crude  oil.

He was of the view that for proper accounting for crude  oil production, the  fiscalisation  of the  commodity should start  from the flow  stations, and that operators must distinguish between stolen products and lost ones.

Also speaking, Ebi Omatsola, group managing  director of  Conoil, warned  that the government should  not succumb  to the  suggestion that measurement of crude  oil  should be done at the wellhead, because  the volume of  crude oil cannot be captured at that point.

 Efforts of the Federal Government to fight crude oil theft were said to have helped  to reduce the volume lost daily  by about 50 per cent,  according to  Delta State governor, Emmanuel Uduaghan, recently.

  This indicates that the country currently loses about $4 million (N640 million) daily to crude oil thieves in the Niger Delta;

“There has been a reduction in oil theft from about 80,000 barrels per day to the current 40,000 barrels per day,” he said. “I can tell you that the crude that is being stolen has reduced to about 40,000 barrels per day.”

 The governor also admitted that despite the reduction in crude theft, the current figure was still ‘too high.’

Olusola Bello