Buhari ignores yearly $4b oil theft which accumulates from 150,000 bpd
By Jeph Ajobaju, Chief Copy Editor
Nigeria loses 150,000 barrels of oil per day (bpd) through theft which boils down to $4 billion per year in a revenge game in the Niger Delta where residents think wrongly they must steal their own cut from the national cake Abuja officials loot.
If Muhammadu Buhari had been up to his job as President, the $4 billion lost yearly to oil theft and other billions of naira being stolen from the treasury on his watch would have been prevented and cancelled the need for loans.
Buhari is also the Minister of Petroleum Resources. Apart from being President, he apportioned to himself direct supervision of the Nigerian National Petroleum Company (NNPC) and the entire oil and gas industry.
And that means he must take direct responsibility for whatever happens in the oil industry he has superintended for seven years running.
Nigeria racked up N38.005 trillion or $92.626 billion debt by the third quarter of 2021 (Q3 2021) during which period external debt servicing cost $1.82 billion, a 43.9 per cent rise on $1.27 million in Q3 2020.
Domestic debt servicing shot up 150.5 per cent from N322.75 billion in Q2 2021 to N808.49 billion in Q3 2021. And Year-to-date (YTD), it jumped to N1.74 trillion from N1.53 trillion in Q3 2020.
Debt comprised loans taken by federal and state governments as well as the Federal Capital Territory (FCT), as published by the Debt Management Office (DMO).
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Chief Executive Officer Gbenga Komolafe, who disclosed the oil theft figures, said plans are being finalised to plug the leaks.
But that may be hard to achieve.
Although official loses have reduced from 200,000 bpd in June 2021 to 150,000 pbd since in January 2022, stealing and refining crude is still a booming cottage industry in the Deep South.
Attacks on oil facilities dropped from 623 in 2014 to 94 by June 2021, an 84.9 per cent reduction that rides on Abuja’s initiatives and on a shift by Niger Delta militants to making money through oil theft.
Nigeria spends N60 billion yearly to repair and maintain vandalised oil and gas pipelines, Information Minister Lai Mohammed said at a town hall on Protecting Oil and Gas Infrastructure in Abuja in June last year.
Destruction of oil facilities has reduced partly because militants now refine crude stolen from pipelines to make money instead of risking their lives by setting oil infrastructure ablaze.
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Illegal refining employs 500,000
Illegal oil refining employs more than 500,000 youths who now seem content except for occasional agitation by some of the 65 ethnic nationalities in the South South for restructuring the country.
“From 2015 to today, we have [had] a calmer Niger Delta,” Petroleum Minister of State Timipre Sylva said in June 2021.
Sylva disclosed that attacks on oil and gas facilities dropped from 623 in 2014 to 94 in June 2021.
However, the relative peace comes with a quiet collateral damage that siphons money from the national treasury.
Crude oil theft accounted for 200,000 bpd by June 2021, according to the Nigerian National Petroleum Corporation (NNPC), which expressed concern about the impact on the economy of petroleum products smuggling and crude oil theft.
Plans to increase output
Komolafe said Nigeria plans to raise its current production to three million bpd as it struggles to hit its OPEC production quota.
Nigeria currently loses “150,000 barrels of oil a day to criminals who illegally tap pipelines,” he disclosed, stressing that at current price levels, the stolen barrels are worth about $4 billion a year, as reported by Nairametrics.
“Pretty soon you will see a reverse in that trend. We are actually targeting three million barrels a day,” he said, adding that such a feat will require significant measures than a reduction in crude theft.
Nigeria pumped 500,000 fewer bpd than its capacity by November 2021, as oil earnings were just over half the target in the first 11 months of the year, with just N970 billion revenue.
Komolafe said Abuja is doing everything possible to attract investors, stressing that recent sales of marginal oil fields to domestic players show they have the capacity to improve production.
Crude output rose from an average 1.41 million bpd in December 2021 to 1.46 million bpd in January 2022 against a monthly target of 1.68 million bpd.
The NNPC is seeking a $5 billion loan from the African Export-Import Bank (AfreximBank) to increase investment in the oil sector, including acquisition of interest in upstream oil and gas producing assets.