The Nigeria Extractive Industries Transparency Initiative (NEITI) says crude oil and products worth $11 million is lost to theft and pipeline vandalism daily.
In a policy brief titled ‘Stemming the increasing cost of oil theft to Nigeria’ released on Wednesday, NEITI said crude oil and refined product worth $41.9 billion was stolen between 2009 and 2018; equal to the size of the nation’s foreign reserves.
A breakdown shows that the nation lost $38.5 billion on crude theft alone, $1.56 billion on domestic crude and another $1.8 billion on refined petroleum products.
In terms of volume, 138,000 barrels of crude oil were lost every day for the past 10 years, representing 7% of the average production of two million barrels per day.
“Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009-2018,” a statement signed Ogbonnaya Orji, the director of communication and advocacy, read.
“What is stolen, spilt or shut-in represents lost revenue, which ultimately translates to services that the government cannot provide for citizens already in dire need of critical public goods.
“Stemming this haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs.”
At an average daily production of two million barrels per day, the 505 million barrels lost to theft translates to eight months of crude production.
NEITI urged that an investigation be carried out into the activities of oil thieves in the country given the increasing rate of stealing and the sophistication.
“Curiously, the volume of losses does not particularly reflect the rate of pipeline breaks for the corresponding years, suggesting either that the criminals are becoming more efficient, or crude theft is occurring increasingly elsewhere. This may require further probing,” the report read.
It also suggested that a special security task team, which would include oil companies and other stakeholders, should be constituted with a mandate to minimise crude theft and vandalism.