Nigeria lost $1 billion in revenue during the first quarter of this year due to crude oil theft, the petroleum regulator said, warning the massive theft was a threat to the economy.
According to the Head of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, of the 141 million barrels of oil produced in the first quarter of 2022, only about 132 million barrels of oil were received at export terminals.
“This indicates that over nine million barrels of oil were lost to crude oil theft … this amounts to a loss in government revenue of about $1 billion … in just one quarter” he stated, in a statement. “This trend poses an existential threat to the oil and gas sector and by extension, the Nigerian economy if not curbed.”, he added.
Nigeria loses millions of barrels of crude oil a year because of theft and vandalism, including the tapping of crude from a maze of pipelines owned by oil majors, underscoring how poor security causes vast financial losses for the country. The theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.
President Muhammadu Buhari has pledged to ensure that oil theft is stopped and has set up dedicated courts to combat the problem, but it still persists. The Minister of State for Petroleum, Timipre Sylva, said last week he expected to see some improvement in security in the sector, enabling Nigeria to meet its OPEC production quota by the end of August.
