Nigeria has about 265 illegal refineries in the Shell Petroleum Development Company (SPDC) corridor alone.
This was disclosed by Chief Timipre Sylva, Minister of State for Petroleum Resources, at the 60th Anniversary of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI), according to NAN.
Nigeria loses millions of barrels of crude oil each year to theft and vandalism, including the theft of crude from a network of pipelines run by large oil companies. This illustrates how lax security results in significant financial losses for the nation.
What they are saying
The minister, who was represented by Mr. Kamaru Busari, Acting Permanent Secretary, Ministry of Petroleum Resources, stated that vandalism and oil theft have reduced Nigeria’s crude oil production to fewer than one million barrels per day.
Sylva claimed that the country’s failure to achieve its OPEC quota had cost it much-needed oil revenue at a time when oil prices were high on the worldwide market.
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Nonetheless, he stated that the government was working with host communities, security agencies, and technology to address the issue in order to enhance investor trust in the sector.
Malam Mele Kyari, Group chief executive officer of Nigerian National Petroleum Business Ltd. (NNPCL), on his part, stated that the company was aware of the existing difficulties, particularly security in operational areas and cash call arrears payment.
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Mr. Dapo Segun, Deputy General Manager, Treasury, NNPCL, represented Kyari, who insisted that the firm was resilient and would work with other stakeholders to overcome the security concerns.
He said: “We have deployed creative solutions to tackle security challenges in the operational areas. Technological intervention for both monitoring and prompt intervention would also be set up. The tackling of the menace is a top priority for NNPCL.”
“Also, our new governance framework provides us autonomy and opportunity for self-accounting hence, cash-call settlement, including arrears would be settled and handled promptly going forward” he added.
Mr. Rick Kennedy, Chairman of OPTS, stated earlier in his welcome speech that OPTS had over the previous 60 years made major contributions to the growth of the Nigerian oil and gas industry.
Kennedy stated that OPTS members had shown resiliency and commitment in the face of economic, security, environmental, and funding challenges. Kennedy was represented by Mr. Osagie Okunbor, Vice Chairman, OPTS.
He said: “We have continued to make significant contributions to Nigeria’s development.
“As a group, OPTS member companies account for about 90 per cent of Nigeria’s oil production and contributes significantly to the domestic and export gas production and supply.
He added “Over the last decade, OPTS member companies accounted for 40-60 per cent of government revenue and 85 to 95 per cent of export earnings. OPTS member companies are also proud to have paid tens of billions of dollars in taxes, levies, royalties, rents, and license fees to the Nigerian government.”
Kennedy, who is also the managing director, Chevron Nigeria/Mid-Africa Business Unit, said the OPTS companies had also created over 600,000 direct and indirect jobs for Nigerians.
Also, Mr. Bunmi Toyobo, Executive Director, OPTS, thanked the 29 companies that were members of the OPTS for their contributions to its achievements in the past 60 years.
“This celebration is to demonstrate our abiding faith in Nigeria as a group and belief in the boundless growth potential of our country, given the enabling environment,” he said
What you should know
- Due to crude oil theft, Nigeria lost a staggering $1 billion in revenue in the first quarter of 2022, endangering the economy of Africa’s top producer based on reports.
- Nairametrics reported that police have deployed assets towards tackling perpetrators of economic crimes aimed at sabotaging Nigeria’s revenue-generating value chains, including crude oil vandalism.
- Nairametrics also reported earlier this year that Austin Avuru, founding MD/CEO of Seplat Energy and executive chairman, AA Holdings warned that Nigeria’s oil production has reached an emergency critical status. He stated that some oil production wells don’t get to see 80% of production making it to the terminals due to oil theft.
- The theft resulted in the Bonny Oil & Gas Terminal, a pipeline that transports crude from the oil-rich Niger Delta to export vessels among other places, declaring a state of force majeure, which made the atmosphere unfriendly and discouraging for investors.