Figures by Nigeria Extractive Industries Transparency Initiative, (NEITI), have revealed that Nigeria lost N2.1 trillion as a result of crude oil production deferment in 2020.
Deferment is the reduction in production or injection availability caused by an activity, breakdown, trip, poor equipment performance, or sub-optimum operations, resulting in a reduction in the volume sold or injected, delaying the production or injection until a later time.
According to the NEITI’s Oil & Gas Report 2020, the deferment was recorded by crude oil companies, including SNEPCO, among others.
A breakdown of the loss shows that Shell Nigeria Exploration and Production Company, (SNEPCO), recorded the highest deferment of approximately 25% (17.8mn barrels (b), followed by Chevron Nigeria Limited (CNL), 17% (12.2mnp/b).
The Nigerian Agip Oil Company, (NAOC), ranked third on the list with 15.4% (11.1mn/b), and Shell Petroleum Development Company (SPDC), with 15.1% (11mn/d).
In total, the country lost approximately 73mn/b to crude oil production deferment in 2020.
A breakdown of the NNPC’s report said injection into Forcados was curtailed due to the Seplat shutdown.
A similar report by the NNPC for August 2021 put crude oil production loss to deferment in April the same year at 3.3mn/b. Brent was $71/b in 2021. Total revenue loss to deferment in just April last year was N248mn.
A breakdown of the NNPC’s report said injection into Forcados was curtailed due to the Seplat shutdown for planned TFP repairs. Pan Ocean OML 147 shut-in production to avoid tank top and also because of industrial action. Also, some stations were shut down on 11/03/2021 for Trans Ramos Pipeline repairs. The cumulative loss for the period was 1.5mn/b.
According to the NNPC GMD, Mele Kyari, the country loses an average of 200,000 barrels of crude per day to oil thieves, translating to 73million barrels in a year. Using an average crude oil price of $100 per barrel, Nigeria loses over $7.3bn in a year or five years (between 2016 and 2020) an estimated $14.65bn, considering the cost of oil per barrel during the years under review.
