New report finds Nigeria has lost US$42 billion to crude oil theft in last decade

A report published by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that crude oil and refined products worth US$41.9 billion have been stolen in Nigeria since 2009.

The report, titled ‘Stemming the increasing cost of oil theft in Nigeria’, urges the federal government to embrace new technologies to combat oil theft and pipeline vandalism.

A breakdown of Nigeria’s losses in NEITI’s report shows that US$38.5 billion was lost on crude theft alone, US$1.56 billion on domestic crude, and another US$1.85 billion on refined petroleum products between 2009 and 2018.

NEITI says that as the country faces dwindling revenues from its oil industry, prevention of oil theft must become a priority in order to expand revenue generation.

The NEITI report calculates that Nigeria loses an average of US$11 million a day, around US$349 million a month, due to theft, process lapses and pipeline vandalism.

The report says: “While figures from government put the loss at between 150,000-250,000 barrels per day (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.”

“In terms of volume, 138,000 barrels of crude oil were lost every day for the past ten years, representing 7% of the 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,” the report continues.

NEITI also identifies several other effects from oil theft in Nigeria, including costly pipeline vandalism and criminal sabotage, as well as illegal refineries which endanger local communities.

Given the increasing amount of crude oil being stolen in Nigeria, as well as the continued sophistication of its illegal trade, NEITI has suggested the need for a forensic investigation of syndicates involved in the country’s oil and gas industry.

“Curiously, the volume of losses does not particularly reflect the rate of pipeline breaks for the corresponding years, suggesting either that the criminals are becoming more efficient, or crude theft is occurring increasingly elsewhere,” the report says.

The agency has also called for a special security task force to be created made up of oil companies and technical experts to help minimise theft and vandalism. NEITI has said the team should focus on improving response time to incidents and have access to real-time data provided by leak detection and localisation systems installed and operated by oil companies.

Nigeria is Africa’s largest crude oil producer and has been plagued for many years by theft, vandalism, piracy and corruption in the oil and gas industry.

Source: HazardEx