More than N4.3 trillion worth of crude oil was taken in 7,143 incidences of pipeline vandalism over a period of five years, according to the Federal Government.
Monday’s Nigeria International Pipeline Technology and Security Conference in Abuja had the topic “Bolstering Regulations, Technology, and Security for Growth,” and that’s where the news broke.
The Pipeline Professionals Association of Nigeria hosted the event.
The Nigeria Extractive Industries Transparency Initiative (NEITI), a Federal Government organization, disclosed oil theft and losses in Nigeria had become a national emergency in a presentation given at the conference.
In a press release, NEITI Executive Secretary Ogbonnaya Orji called oil theft a “emergency” that had devastating effects on economic growth, business opportunities, and oil corporations’ bottom lines.
He cited the agency’s reports in support of his claims, saying things like: “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.”
During that same time period, “NEITI reports also disclosed that Nigeria spent N471.493bn to either repair or maintain pipelines.”
In his speech, Orji cited data from the NEITI’s 2021 Oil and Gas Industry Report, which was published in September. According to this report, the oil and gas industry is responsible for 72.26 percent of Nigeria’s total export and government’s foreign exchange, 40.55 percent of government revenue, and the creation of 19,171 employment.
For us at NEITI, however, it is not up for debate that despite the strategic contributions, the country has yet to derive optimal benefits from its oil and gas resources due to oil theft and losses caused by pipeline vandalism, pipeline integrity compromise, outright sabotage, and general insecurity in the region.
Oil theft is committed through pipeline clamping, illegal connections on major pipelines, exploitation of abandoned oil wellheads, pipeline breakages, and vandalism of key national assets, as we know from NEITI’s reports over the years and from our recent membership on the Special Investigative Panel on Oil Theft and Losses.
“This criminal exploits take place most times in atmosphere of communities’ complicity and conspiracy of silence,” the NEITI director said.
He emphasized that numerous pipelines association members were directly and indirectly involved in supplying the expertise needed to commit oil theft.
“As you are aware, unauthorized connections, pipeline clamps, etc, cannot be done by just anybody. By failing to implement strict regulation and adequate consequences to check involvement of your members, your association is mainly complicit.
For instance, between 2009 and 2020, oil theft and losses were estimated by NEITI to total 619.7 million barrels of petroleum, with a monetary worth of $46.16 billion or N16.25 trillion.
In addition, between 2009 and 2018, Nigeria lost 4.2 billion liters of petroleum products from refineries, at a pace of 140,000 barrels per day, which is equivalent to a loss of $1.84 billion.
According to Orji, “thus, the total value of crude losses between 2009 and 2020 is greater than the size of the country’s foreign reserves and almost 10 times Nigeria’s oil savings in Excess Crude Account.”