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Nigeria - We Lose N2.47bn Daily To Crude Oil Thieves, Says NNPC

Nigeria’s current crude oil loss as a result of illegal activities that include bunkering and pipeline tapping on major oil facilities i...


Nigeria’s current crude oil loss as a result of illegal activities that include bunkering and pipeline tapping on major oil facilities in the Niger Delta has risen from 150,000 barrels per day (bpd) as revealed in February this year by Shell Petroleum Development Company (SPDC) to over 180,000bpd within four months, the Nigeria National Petroleum Corporation (NNPC) has said.
Given that Nigeria’s sweet crude went for $91 per barrel yesterday at the spot market, 180,000 barrels of the same product translates to $16.3 million or N2.47 billion.

NNPC stated yesterday in Abuja that the country’s current total crude oil loss had outstripped the current crude oil production capacity of Ghana which is pegged at 120,000bpd, adding that high-profile criminals had taken over illegal oil trading activities from militants who hitherto engaged in such.
The crude oil production loss claim by the corporation was also corroborated by the National Task Force on Petroleum Revenue headed by former Chairman of the Economic and Financial Crimes Commission (EFCC), Mallam Nuhu Ribadu, who said sustained security challenges in the petroleum sector were contributing about 30 per cent of total revenue loss from the industry.
While addressing members of the House of Representatives Committee on Petroleum (Upstream) who were led by their Chairman, Hon. Ajibola Muraina, on an oversight visit to the NNPC, Group Managing Director (GMD) of the corporation, Mr. Austen Oniwon, said the implication of such illegal activities in the creeks was much more than revenue loss but also included a huge environmental crisis.
Oniwon explained that the situation was becoming so hazardous that if left unchecked, it might create huge environmental degradation that could outweigh what obtains in the Ogoniland considering that over 75 per cent of stolen crude was often wasted on the environment while being refined unethically.
“We lose today almost 180,000 barrels of crude oil per day to criminals. If you reflect back, the total amount of crude oil produced per day in Ghana that sustains the whole country is about 120,000 barrels per day, yet as a nation we lose about 180,000 bpd to criminals.
“The implications of this are many folds; because these people carry out their activities in a most unprofessional manner, they cause huge environmental degradation. We had a major incident in Ogoniland which we are still coping with but what we are seeing today maybe more than double what exists in Ogoniland because they drill into the pipeline, take what they want, leaving the crude oil running out from the pipelines into the environment,” Oniwon said.
He further stated: “This is causing huge environmental problems for us because hydrocarbon can stay in the ground for centuries; it means to recover that land will take generations before it can become productive again. United Nations study indicated that oil has penetrated 30 metres into the ground and so even if you want to remediate, we cannot scrape 30 metres of top soil and replace; we are looking near permanent damage to that environment.”
The GMD called for support from the legislature in enacting far-reaching measures to curtail the incidence as well as in the passage of the Petroleum Industry Bill (PIB) when it eventually gets sent by President Goodluck Jonathan to the National Assembly.
Meanwhile, Ribadu has said that insecurity in Nigeria’s oil and gas installations contributes to about 30 per cent of total loss of revenue due to the Federal Government from the sector.
In a response to questions from journalists at a stakeholders’ workshop on developments in Nigeria’s petroleum sector, Ribadu stated: “Security is the reason why we are not getting the maximum out of this industry; security is responsible for up to 30 per cent of loss of revenue to the country one way or the order.
"And right now, we are being told by so many of the players that we are losing close to 200,000 barrels of crude oil per day to insecurity and if you put that into arithmetic, you know how much we are losing.”
In corroborating NNPC’s claims, Ribadu noted that figures relating to Nigeria’s crude oil loss through illegal activities in the creeks might not be so accurate considering poor metering mechanisms employed in the sector, adding that the country was also losing out in investments due to the sector.
“Not only that, we are also losing investments in the industry. This is an investment that relies solely on people continuously investing in the sector and if you don’t invest today, you are not going to get results. This is affecting that seriously. There is so much loss going on and Nigeria is about the only country where crude oil is being stolen and we need to address this issue seriously,” he said
According to him, “What we are aiming at is to see how we can open up this industry and make it transparent for Nigerians to own it for their benefit and of course this will involve metering, real time reporting which will start from first and foremost giving Nigerians the confidence of what they have and as they know it, they will be able to follow it from production to the flow stations, export terminal and to the end of the process, whether it is going to refineries in Nigeria or outside, Nigerians deserve to know this because the law says we should make it public.”
Ribadu added that the task force was working assiduously to submit its report on time. The workshop was organised by the taskforce.
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