The Nigerian government has disclosed that over the span of five years, oil theft and pipeline vandalism cases have resulted in a loss of crude oil worth N4.3 trillion through 7,143 incidents.
This revelation was made at the Nigeria International Pipeline Technology and Security Conference in Abuja, emphasizing the substantial negative impact of oil theft on the nation’s economy.
During a presentation at the conference, the Nigeria Extractive Industries Transparency Initiative (NEITI) painted a grim picture of the situation, labeling it a “national emergency.”
Ogbonnaya Orji, the Executive Secretary of NEITI, stressed the severe consequences of oil theft, highlighting its detrimental effects on oil exploration, exploitation, economic growth, business prospects, and oil company profits.
Providing data from the agency’s reports to support his statements, he stated, “NEITI disclosed that in the last five years, from 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.”
“NEITI reports also disclosed that during the same period Nigeria spent N471.493bn to either repair or maintain pipelines,” Orji added.
Orji pointed out that NEITI’s 2021 Oil and Gas Industry Report, released in September, revealed that the sector accounted for 72.26 per cent of Nigeria’s total export and government’s foreign exchange, 40.55 per cent of government revenue, and provided 19,171 jobs.
“However, for us in NEITI, it is not a matter of debate that despite the strategic contributions, the country is yet to derive optimal benefits from its oil and gas resources due to oil theft and losses through pipeline vandalism, pipeline integrity compromise, outright sabotage, and general insecurity in the region,” he added.
“From NEITI’s reports over the years, and recently insights from our membership of the Special Investigative Panel on Oil Theft and Losses, we are aware that oil theft is perpetrated mainly through pipeline clamping, illegal connections on major pipelines, exploitation of abandoned oil wellheads, pipeline breakages and vandalism of key national assets to illegally siphon crude into waiting vessels stationed in strategic terminals,” Orji stated.
He stressed that it was also a matter of fact that many members of the pipelines association were directly and indirectly involved in providing the skills and knowledge required to perpetrate oil theft.
“As you are aware, illegal connections, pipeline clamping, etc, cannot be done by just anybody. And so, your association is largely complicit by failing to put in place stringent regulation and appropriate sanctions to check involvement of your members,” Orji noted.
“In addition, Nigeria lost 4.2 billion litres of petroleum products from refineries, valued at $1.84bn at the rate of 140,000 barrels per day, from 2009 to 2018,” he added.
Orji concluded by highlighting that an atmosphere of oil theft, pipeline vandalism, and general insecurity in the oil-producing communities hinders Nigeria’s economic growth.