• Thursday, December 07, 2023
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Oil theft costs Nigeria N4.3tn in five years, NEITI reveals

How security operators save Nigeria $43.2m daily from fighting oil theft

The Nigerian government has revealed that over N4.3 trillion worth of crude oil was lost to oil theft in 7,143 pipeline vandalism cases within five years.

This startling figure was disclosed at the Nigeria International Pipeline Technology and Security Conference in Abuja, highlighting the severe impact of oil theft on the nation’s economy.

In a presentation at the conference, the Nigeria Extractive Industries Transparency Initiative (NEITI), a government agency, painted a grim picture of the oil theft situation, labeling it a “national emergency.”

NEITI Executive Secretary Ogbonnaya Orji emphasized the grave consequences of oil theft, stressing its detrimental impact on oil exploration, exploitation, economic growth, business prospects, and oil company profits.

Orji provided staggering data from NEITI’s reports, revealing that between 2017 and 2021, Nigeria recorded 7,143 cases of pipeline breakages and deliberate vandalism, resulting in the theft of 208.639 million barrels of crude oil, valued at $12.74 million or N4.325 trillion.

Furthermore, Orji disclosed that during the same period, Nigeria spent a staggering N471.493 billion to either repair or maintain damaged pipelines. These figures underscore the immense financial burden that oil theft places on the country’s resources.

Despite the oil and gas industry’s significant contributions to Nigeria’s economy, accounting for 72.26% of total exports, 40.55% of government revenue, and providing 19,171 jobs, NEITI lamented that the country has yet to fully realize the potential benefits of its oil and gas resources due to rampant oil theft.

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Orji pointed to NEITI’s investigations, which have uncovered a range of methods employed by oil thieves, including pipeline clamping, illegal connections, exploitation of abandoned oil wellheads, pipeline breakages, and the use of waiting vessels to siphon stolen crude.

The NEITI boss also highlighted the complicity of pipeline communities in these criminal activities, pointing to a “conspiracy of silence” that facilitates oil theft. Additionally, he accused members of the pipeline association of indirect involvement in oil theft, stating that their failure to implement stringent regulations and appropriate sanctions has allowed for the perpetuation of these illegal activities.

Orji emphasized the severity of the situation, stating that NEITI’s data reveals that between 2009 and 2020, Nigeria lost 619.7 million barrels of crude oil, valued at $46.16 billion or N16.25 trillion.

He further revealed that Nigeria lost an additional 4.2 billion liters of petroleum products from refineries, valued at $1.84 billion, between 2009 and 2018.

The combined value of these losses, according to Orji, exceeds the size of Nigeria’s foreign reserves and is almost ten times the country’s oil savings in the Excess Crude Account.

Orji concluded his address by issuing a stark warning, stating that Nigeria’s economy cannot thrive in an environment plagued by oil theft, pipeline vandalism, and insecurity in oil-producing communities. He urged for urgent and decisive action to address these issues and safeguard the nation’s oil and gas resources.