Oil theft claims outrageous, says Navy chief

The majority of claims about oil theft are outrageous and unrealistic as other factors are responsible for oil losses in Nigeria, Awwal Gambo, Chief of Naval Staff, said on Wednesday.

“We need to distinguish between oil theft and oil losses,” he said during a programme on Channels Television.

“While oil theft involves siphoning crude oil from vandalised pipelines into barges, oil losses occur when there is known production, particularly during shut-ins and force majeures, because the Federal Government does not earn the revenue it should,” Gambo said.

Gambo added that “losses also occur as a result of metering errors on the operating platforms as read. But the volume of crude oil shot-ins from non-production is often added to figures for oil theft instead of declaring them as oil losses. This should not be.”

Nigeria has 36 billion barrels of crude oil reserves and 206 trillion cubic feet of proven gas reserves, but investment in the vital oil sector has declined dramatically in recent years.

For many years, crude theft and pipeline vandalism have plagued the sector, forcing international oil companies operating in the country to sell some of their onshore assets.

Crude oil production in Nigeria has plunged to its lowest in decades amid rising oil theft and pipeline vandalism, leading to the loss of its status as Africa’s top producer to Angola in May. The country produced 1.08 million barrels per day (bpd) of oil in July, down from 1.39 million bpd at the start of the year.

Gambo, in reference to reports that between 20,000 and 200,000 barrels of crude oil are stolen daily in Nigeria, said 100,000 barrels of crude oil is the equivalent of 15.8 million litres of crude oil, which would require a five-tonne barge to make 3,160 trips to convey to a mother vessel within a day.

“The majority of these claims are clearly outrageous and unrealistic,” he added. “Even if there were enough barges, it is highly unlikely given the increased presence of security forces in the creeks and estuaries, as well as the ongoing operations specifically targeting this type of criminal activity.”