Oil theft causes production firms to increase debt by N250b
By Jeph Ajobaju, Chief Copy Editor
Combined bank lending to oil and gas firms rose to N5.93 trillion in June, gleaned from latest Central Bank of Nigeria (CBN) data, which shows downstream operators owe N4.28 trillion and upstream operators N1.65 trillion.
The total sum is an increase of N250 billion from N5.68 trillion in December 2021.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in March raised the alarm over the huge losses incurred by oil and gas operators as a result of vandalism and theft.
PENGASSAN President Festus Osifo disclosed that between October 2021 and February 2022 more than 90 per cent of crude oil pumped into the Trans National Pipeline (TNP) by operators was vandalised, causing huge losses to Nigeria.
Osifo said vandalism also forces companies to go into curtailment when assets and export pipelines are damaged and they cannot export what they produce.
According to him, each operator loses an average 10 days of production shut-in monthly due to vandalism.
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“Recent preliminary work showed that about 150 illegal tappings were used in siphoning crude oil from the TNP,” Osifo said, according to The PUNCH.
“The operating cost of oil and gas firms, both those in the downstream and upstream sub-sectors, is very high now, particularly because of issues of vandalism and security.
“You will see that because of insecurity problems, many of these companies, both onshore and offshore, employ the services of heavy security personnel to safeguard their equipment. Sometimes even their staff has to be secured.
“This additional security costs a lot of money, and this is affecting their bottom-line. On the issue of vandalism, I have observed that a lot of these firms are being harassed by their host communities, which is why they improve their CSRs and give back to these communities.”
