The Federal Government of Nigeria has disclosed a staggering loss of over ₦4.3 trillion due to oil theft within a five-year span, stemming from 7,143 reported cases of pipeline vandalism. This revelation emerged during the Nigeria International Pipeline Technology and Security Conference in Abuja, organized by the Pipeline Professionals Association of Nigeria under the theme “Bolstering Regulations, Technology, and Security for Growth.”
The Nigeria Extractive Industries Transparency Initiative (NEITI), a federal government agency, presented these findings, shedding light on the grim reality of oil theft and losses evolving into a national crisis in Nigeria.
Ogbonnaya Orji, the Executive Secretary of NEITI, emphasized that oil theft posed an urgent and significant threat to the exploration and exploitation of the oil industry, significantly impacting economic growth, business opportunities, and the profit margins of oil companies.
Citing data from NEITI’s reports, he noted: “NEITI disclosed that in the last five years, 2017 to 2021, Nigeria recorded 7,143 cases of pipeline breakages and deliberate vandalism resulting in crude theft and product losses of 208.639 million barrels valued at $12.74 million or ₦4.325 trillion.”
He added, “NEITI reports also disclosed that during the same period, Nigeria spent ₦471.493 billion to either repair or maintain pipelines.”
Orji highlighted the pivotal role of the oil and gas sector in the Nigerian economy. According to NEITI’s 2021 Oil and Gas Industry Report, the sector accounted for 72.26% of Nigeria’s total exports and government foreign exchange, contributed 40.55% of government revenue, and supported 19,171 jobs.
Nevertheless, Orji stressed that despite these contributions, the country was yet to fully capitalize on its oil and gas resources due to oil theft and losses resulting from pipeline vandalism, pipeline integrity compromise, sabotage, and insecurity in the region.
“Oil theft is perpetrated mainly through pipeline clamping, illegal connections on major pipelines, exploitation of abandoned oil wellheads, pipeline breakages, and vandalism of key national assets to illegally siphon crude into waiting vessels stationed in strategic terminals,” he explained.
Furthermore, Orji called attention to the complicity and silence of some communities in these criminal activities and implied that members of the pipelines association were indirectly involved in providing the skills and knowledge necessary to perpetrate oil theft.
He urged the association to establish stringent regulations and appropriate sanctions to curb its members’ involvement in such activities. Orji also revealed data showing oil losses of 619.7 million barrels of crude valued at $46.16 billion or ₦16.25 trillion between 2009 and 2020. Nigeria additionally lost 4.2 billion liters of petroleum products from refineries during the period from 2009 to 2018.
In conclusion, he underscored the severe impact of oil theft, pipeline vandalism, and insecurity in oil-producing communities on the Nigerian economy, highlighting the imperative of tackling these issues for the nation’s prosperity.
