There is a significant miscalculation in determining how much Nigeria is losing in terms of oil theft because oil losses due to other factors are often lumped together as theft. Meaning that the figures given by Nigerian Upstream Regulatory Commission (NUPRC) and the Nigerian National Petroleum Company (NNPC) Limited may not be correct; the Chief of the Naval Staff, Vice Admiral Awwal Gambo, has disclosed. He stated this on Channels Television’s current affairs programme, Newsnight.
According to the Naval chief, losses caused by other factors are lumped together and thereafter put out outrageous figures as the volume of crude oil stolen because of lack of effectiveness on the part of security agencies
“We need to understand the differences between oil theft and oil losses. While oil theft is siphoning crude oil from vandalised pipes into barges, oil losses occur when there is known production, especially during shut-ins and force majeures as the Federal Government does not earn the desired revenue it should,” he noted.
“Losses also occur as a result of metering errors on the operating platforms as read. But the volume of crude oil shot-ins from non-production is often added to figures for oil theft instead of declaring them as oil losses. This should not be.”
Alluding to reports that between 20,000 and 200,000 barrels of crude oil are being stolen daily in Nigeria, Admiral Gambo said 100,000 barrels of crude is the equivalent of 15.8 million litres of Premium Motor Spirit PMS or Petrol requiring a five-ton barge to make 3,160 trips to convey to a mother vessel within a day.
“Most of these claims are definitely outrageous and unrealistic,” he maintained.
The naval chief insisted that even if there were enough barges to do this, it is highly unlikely given the heightened presence of security forces in the creeks and estuaries as well as the subsisting operations specifically targeted at this type of criminal activity.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria lost more than 115,000 barrels per day (bpd) to oil theft and vandalism between January 2021 and February 2022, which amounts to $3.27 billion worth of crude oil.
By implication, the country lost about 7.6 per cent of the current 1.5 million barrels of crude produced per day on average. Therefore, if 80 per cent of Nigeria’s crude oil is stolen as claimed by some operators that means Nigeria produces about 300,000 bpd, whereas regulators put the daily output at 1.5 million. The NUPRC recently expressed worry over the “crude loss figures recently being quoted in the media by some operators, given actions taken so far on the issue.” The NUPRC had said it established a panel to audit the activities of operators in the upstream sector to ascertain the actual volume of oil lost to theft.
The claim that the government has backed the assertion that 80 per cent of Nigeria’s oil production is lost to oil theft is false. Based on the regulator’s record, only 7.6 percent of crude oil is lost to theft.
To discuss these discoveries and attempt to set the facts of crude oil theft straight is our guest, Gbenga Komolafe, who is the Chief Executive Officer of Nigerian Upstream Regulatory Commission.
