How $1.9b monthly loss to crude oil theft puts Nigeria on edge


Nigeria is one of the major crude oil producing countries in the world. The country is among the top 15 crude oil exporting nations. 

Over the years, the country has been contending with oil theft, pipeline vandalism and oil bunkering, which have posed serious economic challenges and negative health implications for the entire country.
Recently, the Federal Government declared that it loses over $1.9 billion monthly to the menace, while the creeks and environment of the oil bearing states continue to be polluted. Last week, the Minister of State for Petroleum Resources, Chief Timipre Sylva, led a Federal Government delegation to the oil producing states to solicit support of governments of the nine Niger Delta states in a bid to end the menace.
But in spite of the efforts, the oil and gas sector will require a long time to mend, JOHNMARK UKOKO writes.


Nigeria, richly endowed with huge deposits of crude oil and natural gas in several states of the country, is presently on edge. The country has earned trillions of dollars from crude oil and gas since the natural resources were first discovered in commercial quantity in 1959 at Oloibiri in present day Bayelsa State.

Sadly, most of the proceeds of crude oil sold in the last six decades ended up in private pockets of top politicians, military top brass and senior civil servants, while the country is left with little resources for economic growth and development of infrastructure.

Besides the diversion of crude oil earnings to private pockets, the country now grapples with massive and unprecedented crude oil theft and in spite of measures purportedly put in place by successive administrations to tackle the menace, no desirable results have been achieved.

Over the years, the United Nations (UN) and Organisation of Petroleum Exporting Countries (OPEC) had raised concerns about the impact of crude oil theft not only on Nigeria, but also on the global oil industry.

Evidences have shown that some powerful countries around the world collaborate with unpatriotic Nigerians to fleece the country of huge volumes of crude oil, hence the inability of Nigeria authorities to end the menace.

Unfortunately, most security apparatuses deployed to the Niger Delta region to protect oil installations and facilities turn around to aid and abet crude oil theft with unpatriotic Nigerians and their foreign collaborators.

Curiously, the menace that Nigeria has grappled with for years, seem to have worsened in the last few years of the President Muhammdu Buhari administration to the extent that top government officials, players in the oil sector and even International Oil Companies (IOCs) have raised the alarm that over 100,000 barrels of crude oil were being stolen daily.

While most Nigerians find it difficult to believe the revelations and disclosure of the IOC chiefs at a conference in Abuja last year, the Federal Government declared last week that the country was actually losing about 400,000 barrels of crude oil daily, amounting to about $1.9 billion monthly.

The development, which has made it difficult for the country to generate enough revenue to meet its daily expenses, led to acute foreign exchange shortage in the economy and massive economic challenges in the country in the last few months.

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The financial strains the country is passing through due to the massive crude oil theft, which has been adjudged the worst in the country’s history, made the Federal Government to send a delegation led by Minister of State for Petroleum Resources, Chief Timipre Sylva to the nine oil producing states of the Niger Delta to solicit the support of the governors to end the menace.

Prominent among the states the delegation visited were Imo, Rivers, Delta, Akwa Ibom and Bayelsa, which is referred to as the state that had witnessed the worst cases of pipeline attacks and crude oil theft over the years.

The delegation also had the Chief of Defence Staff (CDS), General Lucky Irabor and Group Managing Director (GMD) of the Nigeria National Petroleum Company (NNPC) Limited, Mele Kyari, among others.

Speaking at the Bayelsa State Government House in Yenagoa, Sylva said the Federal Government delegation visited the state to seek collaboration against oil theft in the Niger Delta, adding that the stealing of crude oil was being perpetrated at an alarming rate and should no longer be tolerated, given its negative effects on the nation’s economy.

Sylva, who lamented that oil production has been severely affected and also having negative impact on foreign investments in the country, commended Governor Douye Diri for his willingness to partner with the government to end oil theft and assured that the Federal Government was determined and desirous of ending the menace, adding that a lasting solution was long overdue.

On his part, Irabor said the military has heightened operational engagement to stop criminal activities in the region, noting that the activities of oil thieves was a serious cause of concern, as the economy was bleeding and urged those involved in the act to have a rethink, failing which military action will be taken.

Also speaking, Kyari said the country was facing a dire situation that is not just affecting the economy but also the environment.

Maintaining that the importance of collaboration with states in the region could not be over-emphasised, as only one tier of government could not do it alone, he said Nigeria was losing huge amounts of money daily to the menace, which was seriously limiting the country.

Responding, Diri pledged to collaborate with the Federal Government in its bid to tackle the menace, which he said, posed a serious threat to the Niger Delta region and canvassed urgent action to end the ugly trend in the interest of the state, Niger Delta region and entire country, adding that oil theft was also affecting government at all levels.

He said: “Oil theft is affecting government at all levels. It has also denied the locals their means of livelihood. If the oil theft menace is not stopped or reduced drastically, the implications would be grave.”

Recalling how the CDS discussed with governors on the issue, Diri welcomed synergy between the states and the Federal Government to tackle the menace and assured the delegation that his administration would play a vital role in ensuring that oil theft was effectively nipped in the bud.

His words: “The federal and state governments depend on oil. So, oil theft does not affect only the Federal Government. It also affects the state and the local governments. We have spoken about this over and over again and we will continue to talk about it.

“We are talking about our environment that has been brazenly polluted through oil bunkering activities. If you go to our communities, you will see oil floating on our rivers and that has led to the destruction of our people’s means of livelihood.

In Asaba, the Delta State capital, the message was the same, as Governor Ifeanyi Okowa also highlighted the economic losses the menace has imposed on the state and the negative impact on its economy.

He expressed concern over the impact of oil theft on the state’s revenue and health implications on the people and the environment, adding that the state government was ready to support and collaborate with the Federal Government to tackle the challenge.

Okowa, who commended the delegation for the visit, pledged his administration’s support at all times, maintaining that oil theft must be stopped so that the country’s economy could thrive.

The delegation, which visited the nine oil producing states of the Niger Delta region to preach the gospel,

commended the Rivers State Governor, Nyesom Wike and his Imo State counterpart, Hope Uzodimma, for their fight against oil bunkering and oil theft in their states even before the Federal Government woke up to the reality of the challenge.

On several occasions, Wike and Uzodimma visited locations where crude oil was being refined by local refiners, which posed serious health hazards to their communities and economic losses to the entire country.

It would be recalled that Wike on many occasions visited sites where criminals, in collaboration with some security forces, were reportedly engaging in oil bunkering, thereby exposing the people to danger.

Following his strides, it could be said that no politician at the state or federal level has fought oil theft and oil bunkering the way Wike had done.

While oil theft, bunkering and petroleum pipelines are being massively damaged, thereby making it difficult for the country to meet its OPEC production quota, the Nigerian Navy, the Nigerian Maritime Administration and Safety Agency (NIMASA) and other government agencies set up to protect crude oil production and pipelines, appear to be helpless or have been compromised.

And whereas OPEC offered Nigeria between 1.7 million and 2 million barrels per day production quota, the country has only been able to export between 1.1 million and 1.2 million barrels per day (mbpd) for several months running.

Although it is coming late, the Federal Government seemed to have woken up to its responsibility in setting up a committee to fight the menace and with the revelation of the Minister of Finance, Budget and National Planning, Zaniab Usman Ahmed, that the country was losing $1.9 billion monthly to oil theft, it must not be condoned or allowed to continue going forward.

But whatever happens now or in the future, with the massive oil theft, dysfunctional refineries and continued importation of petroleum products, which had deteriorated to the extent of signing a Memorandum of Understanding (MoU) with Niger Republic for importation of fuel, the country’s oil and gas industry and the economy will require a long time to mend.

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