Nigeria Loses N4.3 Trillion To Oil Theft Over Five Years – FG

The Federal Government revealed on Monday that over five years, crude oil valued at more than N4.3 trillion was stolen through 7,143 cases of pipeline vandalism.

This revelation was made during the Nigeria International Pipeline Technology and Security Conference in Abuja, centring around the theme “Bolstering Regulations, Technology, and Security for Growth.” The event was organized by the Pipeline Professionals Association of Nigeria.

A presentation by the Nigeria Extractive Industries Transparency Initiative (NEITI), a federal government agency, emphasized that the issue of oil theft and losses in Nigeria had escalated into a national crisis.

Ogbonnaya Orji, the Executive Secretary of NEITI, stressed that oil theft represented an urgent and significant threat to the oil industry’s exploration and exploitation, with severe negative repercussions on economic growth, business opportunities, and the profit margins of oil companies.

Providing data from the agency’s reports to back his claims, he said: “NEITI disclosed that in the last five years, 2017 to 2021, Nigeria recorded 7,143 cases of pipeline breakages and deliberate vandalism resulting in crude theft and product losses of 208.639 million barrels valued at $12.74m or N4.325tn.

“NEITI reports also disclosed that during the same period, Nigeria spent N471.493bn to either repair or maintain pipelines.”

Orji pointed out that from NEITI’s 2021 Oil and Gas Industry Report released in September, the sector accounted for 72.26 per cent of Nigeria’s total export and government’s foreign exchange, 40.55 per cent of government revenue, and provided 19,171 jobs.

“However, for us in NEITI, it is not a matter of 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 region.

“From NEITI’s reports over the years, and recently insights from our membership of the Special Investigative Panel on Oil Theft and Losses, we are aware that oil theft is perpetrated mainly through pipeline clamping, illegal connections on major pipelines, exploitation of abandoned oil wellheads, pipeline breakages and vandalism of key national assets to illegally siphon crude into waiting vessels stationed in strategic terminals.

“These criminal exploits take place most times in an atmosphere of communities’ complicity and conspiracy of silence,” the NEITI boss stated.

He stressed that it was also a matter of fact that many members of the pipelines association were directly and indirectly involved in providing the skills and knowledge required to perpetrate oil theft.

“As you are aware, illegal connections, pipeline clamping, etc, cannot be done by anybody. And so, your association is largely complicit by failing to put in place stringent regulations and appropriate sanctions to check the involvement of your members.

“For instance, NEITI has put in the public domain empirical data of oil theft and losses at 619.7 million barrels of crude, valued at $46.16bn or N16.25tn between 2009 and 2020.

“In addition, Nigeria lost 4.2 billion litres of petroleum products from refineries, valued at $1.84bn at the rate of 140,000 barrels per day, from 2009 to 2018.

“Thus, the total value of crude losses between 2009 and 2020 is higher than the size of the country’s foreign reserves and almost 10 times Nigeria’s oil savings in Excess Crude Account,” Orji stated.

During the conference, he conveyed to the participants that the Nigerian economy could not thrive in an environment marred by oil theft, pipeline vandalism, and overall insecurity within the oil-producing communities.