Nigeria’s minister of state for petroleum resources, Timipre Sylva, has said crude oil theft is negatively impacting Nigeria’s foreign exchange inflow.
He said this on Saturday, October 29, during the 2022 graduation ceremony of students at the Petroleum Training Institute (PTI) in Effurun, Delta State.
Sylva, who was represented by the permanent secretary of the Ministry of Petroleum Resources, Gabriel Aduda, told attendees of the graduation ceremony that Nigeria loses at least 700,000 barrels of crude oil to theft on a daily basis.
He said: “Oil theft has denied the country an estimated 700,000 barrels of crude oil per day. The adverse effect of this is the drop in the production of crude oil and decline in the national income.”
Depressing metrics of some crude oil theft activities supporting Sylva’s forex statement
Crude oil theft has been an ongoing challenge in Nigeria’s hydrocarbon industry for decades. However, in recent times, the problem has become hydra-headed as a result of a lack of political will by authorities to prosecute perpetrators, who may have links to the government and security outfits. To put what Sylva is saying in perspective, it is instructive to take note of some figures from past statements on the issue of crude oil theft in Nigeria.
- On October 6, 2022, the group managing director of NNPCL, Mele Kyari told the National Assembly that Nigeria was losing potential revenue from 600,000 barrels per day (bpd) of oil.
- On April 7, 2022, during a session of the Upstream Petroleum Committee at the House of Representatives, Mele Kyari told committee members that Nigeria lost $4 billion to crude oil theft at the rate of 200,000 barrels per day in 2021. Kyari also pointed out that as of Q1/2022, Nigeria had already lost $1.5 billion to crude oil theft.
- During a visit to the Delta State governor, Ifeanyi Okowa in August 2022, Mele Kyari said Nigeria is losing $1.9 billion every month to crude oil theft.
- Crude oil theft did not slow down in 2020 as a result of the Covid-19 lockdown, as thieves stole about $15.71 billion worth of crude oil.
- An oil and gas industry report from the Nigeria Extractive Industries Transparency Initiative (NEITI) showed that Nigeria lost 272 million barrels to theft and sabotage between 2016 and 2020.
What you should know
- Nairametrics had earlier highlighted that oil and gas contributed 90% of Nigeria’s foreign exchange earnings in the first quarter of 2022, a significant dependency for Nigeria’s forex stability. It is clear that the rise in oil and gas inflows is correlated to a stronger naira and vice versa.
- Nairametrics has also written that without international assistance and coordination, oil theft in Nigeria would keep hampering the nation’s chances of obtaining enough forex ‘ammunition” to keep the naira stable.
- NNPCL has assured that it is tackling crude oil theft by collaborating with security forces as well as Tantita security services, which is owned by ex-Niger Delta militant, Tompolo, and has exposed some illegal crude oil production sites in the Niger Delta region.
