The Speaker of the House of Representatives, Tajudeen Abbas, has revealed that Nigeria has suffered substantial losses due to crude oil theft amounting to $46 billion between 2009 and 2020.
Rt. Hon Abbas disclosed this while inaugurating the ad-hoc committee to investigate crude oil, theft and attendant revenue losses.
According to him, Nigeria lost approximately $46 billion between 2009 and 2020 due to crude oil theft. This staggering figure underscores the gravity of the issue.
- In his words, “NEITI reports also show that 619 million barrels of crude valued at $46 billion were stolen in the period 2009-2020. Nigeria has continually failed to meet its daily production quota as set by the Organisation of the Petroleum Exporting Countries (OPEC).”
Impact on Oil Production
The menace of crude oil theft has had a detrimental impact on Nigeria’s oil production. It is estimated that between 5% and 30% of crude oil production is lost daily due to theft. This has significantly hindered the growth of the country’s oil sector.
- He said thus, “While the average international price for Brent crude oil has hovered slightly above the set benchmark price since January, Nigeria’s daily oil production has performed poorly due to a number of reasons.
- “It is common knowledge that investment in the oil and gas sector has declined in the past few years owing to global financing constraints and the overall response to energy transition considerations.”
Warning of Fiscal Crisis
Abbas warned that if decisive action is not taken to address the issue of crude oil theft, Nigeria could face a deeper fiscal crisis, given the declining revenue from the oil and gas sector. This emphasizes the urgency of addressing the problem.
Declining Oil Production
Quoting data from the Nigeria Extractive Industries Transparency Initiative (NEITI), the Speaker highlighted a decline in Nigeria’s oil production from 2.51 million barrels per day in 2005 to 1.77 million barrels per day in 2020. This decline further exacerbates the economic challenges facing the nation.
- Commenting further he said, “Recently, Nigeria’s OPEC quota was reduced from 1.742 million barrels per day to 1.38 million barrels per day. Yet, the country is still struggling to meet this quota as daily production output was 1.184 million barrels per day and 1.249 million barrels per day in May and June 2023 respectively.
- “On average, current daily production output is a far cry from the budget assumption of 1.69 million per day. The implication is clearly manifest in the economic crisis that the country is facing.”
Global Uncertainty
The Speaker also noted that global factors, such as the ongoing COVID-19 pandemic recovery and the Russia-Ukraine conflict, have cast a cloud of uncertainty over Nigeria’s oil and gas industry. These external factors contribute to the challenges facing the sector.