Latest data released by the Nigeria Extractive Industries Transparency Initiative, a Federal Government agency, indicates that Nigeria lost about N1.96tn to oil theft, sabotage and crude oil production adjustment in 2021.
In its just released 2021 Oil and Gas Sector Report, NEITI explained that 68.47 million barrels of crude oil was lost in the year under review.
Under the crude oil production and exports section in the report, NEITI said, “The total volumes of oil and gas production for 2021 were extracted from the NMDPRA (Nigerian Midstream and Downstream Petroleum Regulatory Authority) sign-off documents.
“This document is signed by the production company, NMDPRA and NNPC (Nigerian National Petroleum Company Limited) following the yearly reconciliation of production figures.
“The figures were also reconciled with the companies during the course of the audit. For year 2021, 54 companies produced crude oil resulting in a total metered production of 634.60 million barrels.
“However, 68.47 million barrels was lost to production adjustment, measurement error and theft/sabotage, leaving a balance of 566.13 million barrels as fiscalised production for 2021.”
The agency pointed out that the fiscalised production includes both crude oil and condensates, adding that “the reconciled production data is, however, at variance with publicly disclosed data on NUPRC (Nigeria Upstream Petroleum Regulatory Commission) website.”
It added, “The total fiscalised crude oil production for 2021 was 566.13 million barrels. This is a 12 per cent reduction from the volume produced in 2020, which was 646.79 million barrels.”
Figures from Statistica, an international statistical firm, showed that the average cost of crude oil in 2021 was $70.86/barrel.
Also, the average exchange rate of the dollar against the local currency in 2021 was N403.58/$, according to data from Exchange Rates UK, a global rates monitoring firm.
By losing 68.47 million barrels in 2021, it means Nigeria lost about $4.85bn that year.
When multiplied by the average exchange rate of N403.58/$, the result is N1.96tn, which implies that the country lost this amount due to oil theft and other challenges in 2021.
The Executive Secretary, Major Oil Marketers Association of Nigeria, Clement Isong, told news correspondent that the Federal Government must work hard to stop crude oil theft.
He said oil theft was not only stopping Nigeria from meeting its production quota as approved by the Organisation of Petroleum Exporting Countries, but was denying the country a whole lot of dollars required for the imports of goods.
“The I&E (Importers and Exporters) window is illiquid. There’s no money there. To buy products, for instance, petrol, it costs you between $25m to $30m. You can’t find it in the I&E window. So it doesn’t work and that is why people are not importing.