Chevron boss says oil theft different from host community agitation
By Jeph Ajobaju, Chief Copy Editor
Crude oil theft in the Deep South is an organised crime that is quite different from the agitation of host communities about environmental degradation and demand for compensation, says Chevron boss Richard Kennedy.
The Managing Director of Chevron Nigeria/Mid Africa Business Unit stressed the point at the Nigeria Oil and Gas (NOG) Conference in Abuja when he was asked to comment on host community provisions in the Petroleum Industry Act (PIA).
“From my experience, the issue with crude oil theft should not be confused with host community issues. It is much, much, much bigger than that. It is completely different from host community issues. Quite frankly it is organised crime,” Kennedy said.
“The volume of crude that is being stolen is well beyond comprehension. You can see some of the figures in the press, maybe it’s about 100,000 barrels per day at $100 per barrel and that’s $10 million per day that is being stolen.
“And NNPC owns 60 per cent while taxes of 85 per cent are paid so it’s a huge loss for the country.”
Oanda Group Chief Executive Officer Wale Tinubu disclosed that about 20 per cent of the company’s daily crude production is stolen.
“There has been a 43 per cent reduction in our production from March 2020 to May 2022. We lose almost 20 per cent of our daily crude production to oil thieves and pipeline vandals and 20,000 barrels a day of oil is lost to oil theft.
“Basically, some three million barrels on average yearly are lost to oil theft and pipeline vandalism.”
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Existential threat to economy
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Chairman Gbenga Komolafe announced recently that only about 132 million barrels of the 141 million barrels of oil produced in the first quarter of 2022 were received at export terminals.
“This indicates that over nine million barrels of oil have been lost to crude theft … this equates to a loss of government revenue of approximately $1 billion … in just one quarter,” he said, per Nairametrics.
“This trend poses an existential threat to the oil and gas sector and, by extension, to the Nigerian economy if left unchecked.”
Komolafe added that theft of crude oil grew from 103,000 barrels per day (bpd) in 2021 to an average 108,000 bpd in the first quarter of 2022.
