Nigeria lost about $42 billion to crude theft as well as domestic and refined petroleum products losses between 2009 and 2018, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.
In the latest edition of its Policy Brief titled “Stemming the Increasing Cost of Oil Theft to Nigeria” published Wednesday in Abuja, NEITI alerted the nation that crude oil and refined product valued at about $41.9 billion were stolen from Nigeria during the period.
The brief contains graphic information and data on the cost of oil theft to the country as well as other far-reaching recommendations in the areas of security overhaul, country engagements, diplomatic approach, enforcement, etcThe report gave the breakdown of the losses to include about $38.5 billion on crude theft alone, $1.6 billion on domestic crude and another $1.8 billion on refined petroleum products.

NEITI blamed the losses to the government not embracing oil fingerprinting technology, absence of comprehensive metering infrastructure of all oil facilities, and other creative strategies to combat the growing menace of theft of Nigeria’s crude oil and refined petroleum products.

The transparency agency said in the face of current dwindling revenues, paying priority attention to oil theft in the country’s oil and gas industry has become necessary to expand revenue generation.

In addition, the report said Nigeria loses an average of $11 million daily, $349 million in 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 barrels per day (bpd), data from private studies give an estimate of between 200,000 and 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. Stemming the haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs,” the report said.

‘Loss equivalent to foreign reserves’

The transparency agency put the value of crude oil and allied products so far lost are equal to the size of Nigeria’s entire foreign reserves.

In comparison, the report said the size and implication of the losses to the country’s current dwindling revenue profile have heightened the need for government to take steps to curb oil theft to reduce budget deficits and external borrowing.

“What the country lost in 20 months in fiscal terms is enough to finance the proposed budget deficit for 2020, while in 15 months, it will cover total proposed borrowing, or increase capital budget by 100 per cent, and in five months to cover pensions, gratuities and retirees’ benefits for 2020,” the report said.

In terms of volume, NEITI said about 138,000 barrels of crude oil were lost every day for the past 10 years, representing 7 per cent of the average production of two million bpd.

Besides, it said Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009 and 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,” it added.

Effects

The report further identified other effects of oil theft to include pipeline vandalism, criminal sabotage, illegal refineries in oil-producing communities, which threatens the safety and livelihoods of the environment where these illegal refineries operate.

On the environment, the NEITI brief said the impact of oil spills ”is monumental, downgrading the environment and negatively affects the livelihoods of host communities”.

The report examined the reasons for the upsurge in the theft while reviewing current containment strategies.

These include inadequate legal sanctions to serve as a deterrent, stringent laws, deployment of technology designed to swiftly detect, localise and cut off flows to specific pipelines as soon as leakages occur.

NEITI’s recommendations included operational, security, legal and global governance instruments to combat crude theft.

These include an efficient response and containment time in checking oil theft and pipeline vandalism, an urgent review of the status of various security organizations currently involved in the crude pipeline and product surveillance.

The report demanded a forensic investigation into the activities of syndicates operating in the oil and gas industry, given the increasing rate of stealing and sophistication of the illicit trade.

“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. This may require further probing,” the report said.

NEITI suggested the reconstitution of a special security task team, consisting the oil companies and technical expertise in relevant fields, for Nigeria’s oil and gas assets, with a specific mandate to minimise crude theft and vandalism.

http://c.newsnow.co.uk/A/1007617494?-395:737
Lalasticlala, mynd44

Hmmmn...

What has this government done differently or better?