Nigeria loses $126 billion in revenue to pipeline vandalism
In financial terms, the country may have lost not less than $126.3billion in revenue ($63.14/barrel) to the continued act of vandalism.
The NCTL, which is 100km long and has a capacity of 150,000 barrels per day (bpd) at Nembe Creek, evacuates crude to the Bonny Crude Oil Terminal.
According to its operator, Aiteo Eastern Exploration and Development Company Limited, the NCTL had been shut down for 61 days this year, with the number of barrels lost to these incidents, almost compared in volume to Nigeria’s total daily production.
Nigeria has been producing between 1.65-1.97 million bpd since the introduction of production cuts by the Organisation of te Petroleum Exporting Countries (OPEC) this year.
The Guardian had reported that although the Nigerian National Petroleum Corporation (NNPC), and some International Oil Companies (IOCs), operating in the country stake as much as N350.4billion for staff and asset protection yearly, the nation is still losing over N1.6trillion to oil and gas theft annually.
Indeed, stakeholders in the sector are pointing accusing fingers at Nigeria’s military, and a network of politically-exposed individuals as being behind the growing losses of crude and refined petroleum products estimated at $42billion (N15trillion) in the past 10 years.
The oil firm said in a statement that it was constrained to alert all stakeholders of the recent spate of sustained attacks on the key national oil infrastructure in its asset base, the NCTL.
Aiteo said, “Despite significant investments in security, technology, and civic engagements, the destructive pattern of pipeline vandalism still persists.
“These attacks are persistent, sophisticated, and appear timed to inflict debilitating and disruptive effect, all indisputably calculated to decimate Aiteo’s production output in the short if not medium term.
“Regrettably, these vicious and malicious exertions by individuals and faceless entities are having that unavoidable effect.
“The disruptions that these attacks have brought about have led to direct, irretrievable and significant losses in production and consequently have created revenue deficits that directly impact all the stakeholders across the relevant value chain. The consequences say nothing of the significant negative and inherently damaging effect that these malicious infractions have on the environment
“Industry sources forecast that Nigeria will be producing at least 2.5m barrels per day (bpd) by the middle of 2020, mainly by fixing damaged pipelines and dealing with security problems. In the face of this extremely high level of deliberate sabotage, it seems clear that there are interests within the country that seem determined to scuttle this aspiration.”
According to the statement, in 2019 alone, Joint Investigative Visits, comprising security and regulatory agencies as well as community representatives and Aiteo personnel to ascertain the cause of the breaches to the NCTL, revealed that 98 per cent of all incidences were attributable to third-party infractions alone.
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