A recent report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria lost a staggering 362.28 million barrels of crude oil between 2014 and 2023. The losses were attributed to measurement errors, sabotage, and production adjustments.
This translates to an average daily loss of approximately 992,547 barrels over the 10-year period.
The findings were published in NEITI’s latest report, titled “Oil & Gas Industry Audit 2023: An Independent Report Assessing and Reconciling Physical, Process, and Financial Flows within Nigeria’s Oil & Gas Industry.” It highlighted that a total of 110.66 million barrels of crude oil were deferred during this time frame.
NEITI compiled the report by analyzing multiple sources, including submissions from the Nigerian Upstream Petroleum Regulatory Commission and reports from entities like Nigerian National Petroleum Company Limited. The term “deferment” in the report refers to interruptions in production due to factors like scheduled and unscheduled repairs, maintenance, pipeline leaks, or equipment malfunctions.
Nigeria, one of Africa’s largest oil producers, continues to grapple with fully utilizing its oil and gas resources. The situation is exacerbated by the use of outdated and corroded pipelines for crude oil transportation.
The report further detailed that crude oil losses increased significantly over the years, peaking at 101.05 million barrels in 2026. For instance, in 2014, the country lost just 1 million barrels, but by 2015, losses had surged by 2,612% to 27.12 million barrels. The highest loss, recorded in 2016, was 101.6 million barrels, equating to a daily loss of 278,356 barrels and a revenue shortfall of $4.6 billion, based on an average crude oil price of $46.07 per barrel for that year.
In subsequent years, the pattern of loss fluctuated: 36.46 million barrels were lost in 2017, 53.28 million barrels in 2018, 42.25 million barrels in 2019, and 39.08 million barrels in 2020. Notably, 2021 saw a sharp drop in losses to 17.57 million barrels, while 2022 recorded 36.69 million barrels. However, 2023 saw a significant 79% reduction in losses, with only 7.68 million barrels lost, equivalent to 21,041 barrels per day.
The NEITI report stated:
“Crude oil loss for 2023 was 7.68 million barrels, constituting 3.33% of the total metered production. Losses were attributed to measurement errors (2.91 million barrels), theft and sabotage (5.25 million barrels), and production/terminal adjustments (486,746 barrels).”
The report credited the significant reduction in losses to government initiatives aimed at curbing crude oil theft, improving operational efficiency, and fostering greater accountability in the sector. However, it emphasized the need for Nigeria to ramp up production to its 2013 annual average of 800 million barrels, recommending a forensic audit of wellheads and production platforms.
NEITI further urged the government to explore public-private partnerships to deploy advanced digital solutions that could prevent further losses. It also recommended the establishment of a database to track petroleum product losses and prevent disruptions in the supply chain.
In conclusion, the agency proposed setting up a special fund and a standby committee dedicated to preventing crude oil losses and securing Nigeria’s oil and gas assets. This, it argued, would provide a more coordinated and effective response to the ongoing challenges in the sector.
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