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Nigeria lost $42bn to crude oil and products theft in 10 years – NEITI

Nigeria lost $42bn to crude oil and products theft in 10 years – NEITI

Crude oil and refined products worth $41.9 billion were stolen from Nigeria in the last 10 years (2009 – 2018), the Nigeria Extractive Industries Transparency Initiative (NEITI) said in a report released yesterday in Abuja.
In the report, which is a policy brief titled ‘Stemming the Increasing Cost of Oil Theft to Nigeria’,  NEITI urged government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities, and other creative strategies to combat the growing menace of theft of Nigeria’s crude oil and refined petroleum products.
A breakdown of the report made available by NEITI’s spokesman Dr. Orji Ogbonnaya Orji, showed that the nation lost $38.5 billion on crude theft alone, $1.56 billion on domestic crude and another $1.8 billion on refined petroleum products between 2009 and 2018.
The agency further expressed concern that in the face of current dwindling revenues, paying priority attention to curb oil theft in the country’s oil and gas industry has become both necessary and urgent to expand revenue generation. The NEITI report further disclosed that Nigeria losses an average of $11 million daily which translates to $349 million a month and about $4.2 billion annually to crude and product losses arising from stealing, process lapses and pipeline vandalism.
“While figures from government put the loss at between 150,000-250,000 bpd, data from private studies estimate the figure to be between 200,000-400,000 bpd. This implies that Nigeria may be losing up to a fifth of its daily crude oil production to oil thieves and pipeline vandals,” the report said. On comparative analysis of the size and implication of the losses to the country’s current dwindling revenue profile, NEITI renewed its appeal to government to curb oil theft to reduce budget deficits and external borrowing. The transparency agency stated that the value of crude oil and allied products so far lost was equal to the size of Nigeria’s entire foreign reserves.

“Stemming this haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs,” the report stressed According to the NEITI report, what the country lost in 20 months in fiscal terms is “Enough to finance the proposed budget deficit for 2020; in 15 months to cover total proposed borrowing or increase capital budget by 100% and in five months to cover pensions, gratuities and retirees’ benefits for 2020.” NEITI added that “In terms of volume, 138.000 barrels of crude oil was lost every day for the past 10 years, representing 7% of average production of two million bpd. “Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009-2018. What is stolen, spilled or shut-in represents lost revenue, which ultimately translates to services that government cannot provide for citizens already in dire need of critical public goods.” The report further identified other effects of oil theft to the nation to include: pipeline vandalism, criminal sabotage, illegal refineries in oil producing communities, which threatens the safety and livelihoods of the environment where the illegal refineries operate.

On the environment, the NEITI policy brief stated that the impact and implication of oil spills was monumental; as they degrade the environment and negatively affect the livelihoods of host communities. The report examined the reasons for increase in incidence of crude and product theft and reviewed current containment strategies. These include, inadequate legal sanctions to serve as deterrent, stringent laws, deployment of technology designed to swiftly detect, localise and cut off flows to specific pipelines as soon as leakage occurs.

Source: https://www.dailytrust.com.ng/nigeria-lost-42bn-to-crude-oil-and-products-theft-in-10-years-neiti.html