Nigeria loses $700m to oil theft monthly

Nigeria loses $700m to oil theft monthly
Africa’s largest economy, Nigeria, loses $700 million every month to oil theft and vandalism.

The Nigerian National Petroleum Company Limited (NNPCL) stated in a report by The Cable.

Confiance News gathered that the report showed that Bala Wunti, group general manager, National Petroleum Investment Management Services (NAPIMS), made the disclosure during a tour of NNPCL facilities on Sunday.

Confiance News also gathered from the report that NAPIMS is a corporate services unit in the upstream directorate of NNPCL.

Wunti said the security challenges experienced in the oil sector hinder oil production in some of the country’s terminals.

He said the pipelines — particularly those around the Bonny oil export terminal — cannot be operated due to the activities of oil thieves and pipeline vandals.

“If you’re producing 30,000 barrels a day, every month, you get 1,940 barrels. So what it means is that you can take it to 270 every four days, calculate it in a month; you will have seven cargoes on a million barrels, that’s seven million barrels,” he said.

“When you multiply seven million barrels by $100 that is $700 million lost per month, adding that about 150,000 barrels expected are differed, we are not producing due to security challenges.

“The Shell Petroleum Company (SPDC)  trunk line, TNP transnational pipeline cannot be operated and this has been the case since March the 3rd.”

Wunti said Forcados oil export terminal is not completely secure due to some challenges — but assured that the corporation would fix the issues in two weeks.

He said the Brass oil export terminal, which is operated by Agip and produces about 100,000 barrels, is also facing insecurity and vandalism.

“Illegal siphoning of crude oil from oil facilities by criminal individuals and groups impacted negatively on revenue to all stakeholders,” he said.

“The impact of vandal activities caused low crude oil production, interrupted gas supply, countrywide interruption of distribution of petroleum products, refineries’ downtimes, increasing instability in the oil and gas market, but I will tell you the major thing that affects us.

“Nigeria will suffer for it; the revenues are impacted, so we can only appeal to them to rein in themselves, the oil theft situation is regrettable. It’s not going on across the whole of the Niger Delta, there are trunk lines that are more impacted and I think the Bonny trunk line ranks highest.

“Our major challenge as a country is our capability to respond and that is as a result of several factors, the terrain as well as some incapacity that we have.

“I was in the Saudi Arabia infrastructure twice, and I know what they have. It’s a digital control system; it’s different from our own. Digital control system, it’s like you have the control system of all your assets in one place.

“This is beyond the digital control system; it’s also a security system and we are doing it and to tell you that this was built-in by our in-house software engineers because of the security sensitivities to it because they are customized.

“So we use a combination of technology to integrate and synchronize and create what we are now confident and comfortable with.

Confiance News recalls that the loss of its position as Africa’s leading crude oil producer to Angola is one of the many consequences of oil theft and vandalism Nigeria has had to contend with.