Nigeria lost $1 billion in revenue during the first quarter of this year due to crude oil theft, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, said at the weekend, warning that the development was a threat to the country’s economy.Nigeria loses millions of barrels of crude oil a year because of theft and vandalism, including the tapping of crude from a maze of pipelines owned by oil majors.
Komolafe, according to Reuters, said that of the 141 million barrels of oil produced in the first quarter of 2022, only about 132 million barrels of oil were received at export terminals.
“This indicates that over nine million barrels of oil were lost to crude oil theft … this amounts to a loss in government revenue of about $1 billion … in just one quarter,” Komolafe said in a statement.
“This trend poses an existential threat to the oil and gas sector and by extension, the Nigerian economy if not curbed,” he added.
Crude oil theft has increased to a daily average of 108,000 barrels in the first quarter of 2022 from 103,000 barrels in 2021, the NUPRC boss noted.
The theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.
President Muhammadu Buhari had pledged to ensure that oil theft is stopped and had set up dedicated courts to combat the problem, but it persisted.
Minister of State for Petroleum Resources, Mr Timipre Sylva, said last week he expected to see some improvement in security in the sector, enabling Nigeria to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota by the end of August.
Meanwhile, a three-million-barrel cut to daily supplies would push benchmark crude prices to $190, while the worst-case scenario of five million could mean “stratospheric” $380 crude, JPMorgan Chase analysts have said.
This, the group said would likely happen if US and European penalties prompt Russia to inflict retaliatory crude-output cuts.
Emmanuel Addeh in Abuja