The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, has said Nigeria lost about N434 billion (about $1 billion) to oil theft between January and March this year.
The huge amount lost to oil theft was disclosed same day the Minister of State, Petroleum Resources, Mr. Timipre Sylva, said international oil companies (IOCs) are leaving Nigeria because the environment was becoming too volatile for their operations.
Also, Africa’s richest man and President of the Dangote Group, Alhaji Aliko Dagote has advised the federal government to introduce a single-digit tax regime to encourage investments in the downstream and midstream sectors of the Nigerian oil and gas industry.
Komolafe was speaking at the Iwereland Petroleum Communities Summit on the implementation of the Host Communities’ Development Trust in oil producing Itsekiri communities under the Petroleum Industry Act (PIA) 2021 hosted by the Olu of Warri, Ogiame Atuwatse III.
The upstream regulator disclosed that only about 1.35 million barrels or 71 per cent of the 1.9 million barrels that Nigeria produces, all things being equal, gets to the crude oil export terminals due to massive theft and pipeline vandalism.
Stressing that the challenge was hindering Nigeria from meeting her crude oil output capacity, Komolafe said out of about 141 million barrels of crude oil the country produced during the period, about nine million barrels were lost to crude oil theft.
Given the prevailing price of an average of about $116 per barrel at the international crude oil market, and an official exchange rate of N415/$, the loss sums up to about N434 billion.
“While the commission is prioritising efforts towards increasing oil and gas production and ensuring maximum economic recovery in Nigeria through the optimisation of oil and gas value chain, there have been challenges limiting the country from making the much-desired progress,” Komolafe lamented.
Nigeria has under-produced for months now and it had been unable to meet the Organisation of Petroleum Exporting Countries (OPEC) quota. It also means that the country has not able to reap the full benefits of the rising oil prices.
The NUPRC boss lamented that the loss to oil theft could have been available for development of social projects like hospitals, schools, roads, provision of electricity and potable water, to improve the quality of life of the people.
Beyond the loss in revenue, he said the sabotage of oil and gas facilities had resulted in additional remediation cost to the government as well as environmental degradation from oil spills.
In addition, he listed soil and water pollution, threat to human life, source of livelihood, wildlife and marine life (fishes) and crops as some of the impacts of the increasing theft of Nigeria’s oil.
These losses, he said, underscored the need for the government to optimise oil and gas resources development and production through the passage to law of the Petroleum Industry Bill (PIB) after more than 20 years.
Komolafe said the enactment of the PIA opened new opportunities in the country’s oil and gas industry, with extensive provisions to foster sustainable prosperity of host communities and enhance peaceful and harmonious co-existence of oil companies with their host communities.