The minister of state for petroleum resources, Dr Ibe Kachikwu has disclosed that the country has lost billions of naira in 1,600 cases of pipeline vandalisation since the beginning of the year.
Kachikwu stated this at the 2016 annual conference of National Association of Energy Correspondents with the theme: “Low Oil Price: Impact and the Way Forward” in Lagos.
He added that the country recorded over 3,000 pipeline vandalism cases from 2010 to 2015, saying that the impact of attacks on oil and gas pipelines was that there was no money to fund the 2016 budget.
He said that militancy in the Niger Delta had destabilised the country’s oil industry, adding that Nigeria needed to increase its production by 1.1 million barrels per day to meet its target.
Kachikwu stressed that the declining price of oil in the international market had negatively impacted the country’s revenue, leading to economic recession. He further stated that proactive steps were required to bring Nigeria’s economy back on the positive track.
“While vandals wreak havoc on oil facilities and cripple local production, over-supply of product in the market is affecting prices and creating shocks to the economy,” he said.
The minister said that the time has come for the country to face the reality on ground as there was no assurance that the price of oil would peak as being speculated. He explained that the OPEC merely controls 30 per cent of the market while 70 per cent is in the hands of major producers, such the United States, Russia and Mexico, which were not OPEC members.
He said that the industry was challenged by $6 billion cash call indebtedness accumulated over the last five years and that due to the inadequate financing of the industry no investment had been made in the sector in the last five years.
He also revealed that 643 million litres of petroleum products, amounting to N51.28 billion, was lost in 2015 while between January and June a loss of 109 million litres of petroleum products and 560,000 barrels of crude had been recorded, noting that about 850 million standard cubic feet of gas production had been lost from crises and power outage exposure of 2,700 mega watts (mw) to 3,000mw.
Kachikwu said that government was stepping up efforts to make robust policies that would finalise and gazette a comprehensive gas policy, unlock gas potential and ensure effective development of Nigeria’s gas market.
