Government losses N16.3trn to crude oil theft

Nigeria lost N16.3 trillion to crude oil theft between 2009 and 2020, the Executive Secretary, Nigerian Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya has disclosed.

He said with about 620 million barrels of crude oil lost within the period, curbing the twin menace of crude oil theft and pipeline vandalism has become a national emergency challenge.

The Executive Secretary made the disclosure while delivering his keynote address at the Nigeria International Pipeline & Security Conference in Abuja.

Speaking on the topic: “Pipeline Security, Oil Theft and the Implications for Economic Growth”, said strengthening security around the country’s oil and gas pipeline system was key to the ongoing search for solutions to the intractable scourge of crude oil theft and pipeline vandalism.

He stressed that solutions must be found for the challenge if investors’ confidence in the country’s oil and gas industry is to be restored and trust rebuilt, towards boosting national economic growth.

While making reference to the recently published NEITI 2021 Oil and Gas Industry Report, Orji said crude oil theft and losses through pipeline vandalism pose serious threats not only to oil and gas exploration and exploitation in the country but also have huge negative consequences on the country’s economic growth, business prospects, and profit earnings by oil companies.

“From NEITI’s 2021 Oil and Gas Industry Report released last month, the sector accounted for 72.26% of Nigeria’s total export, and the government’s foreign exchange, 40.55% of government revenue, and provided 19,171 jobs.

“However, it is not a matter for debate that despite the strategic contributions, the country is yet to derive optimal benefits from its oil and gas resources, due to oil theft and losses through pipeline vandalism, pipeline integrity compromise, outright sabotage, and general insecurity in the oil-producing region,” Orji said.

Apart from findings in NEITI’s Reports over the years, Dr Orji said recent insights from the agency’s membership of the Special Investigative Panel on Oil Theft and Losses revealed how crude oil theft was being carried out.

He said the crime was being perpetrated mainly through pipeline clamping, illegal connections (ICs) on major pipeline systems, exploitation of abandoned oil well-heads, pipeline breakages, and vandalism of key national assets to illegally siphon crude oil into waiting vessels stationed in strategic terminals.

These criminal exploits, the NEITI Chief noted, take place, most times, in an atmosphere of communities’ complicity and conspiracy of silence by officials of government agencies that have the responsibility to curb illegal activities.

Highlighting the level of losses the country was suffering as a result of the crime, Dr. Orji said in addition to the empirical data of oil theft and losses above, Nigeria also lost about 4.2 billion litres of refined petroleum products from refineries, valued at over $1.84 billion at an average rate of 140,000 barrels per day between 2009 and 2018.