The Nigeria Extractive Industries Transparency Initiative, NEITI, has said that Nigerian refineries lost $1.84 billion worth of petroleum products from its refineries over the past nine years.
According to NEITI, the losses incurred were chiefly a consequence of oil theft which has seemingly become a norm across the oil-rich states of the country.
Speaking at the opening ceremony of the 2024 NEITI board retreat/meeting in Lagos recently, Executive Secretary of NEITI, Ogbonnaya Orji revealed that the country also lost 619.7 million barrels of oil valued at $46.16 billion over a 12-year period.
Orji explained that between 2009 and 2018, Nigeria lost 4.2 billion litres of petroleum products from its refineries due to oil theft, which was estimated at 140,000 barrels per day, adding that, Oil theft, pipeline vandalism and other challenges in the upstream oil sector have plagued Nigeria’s crude production for several years.
Recall that in May, the Nigerian National Petroleum Company Limited, NNPC, reportedly uncovered 122 illicit oil refining facilities in the southern state of Niger Delta.
While stating that that NEITI produced a report with recommendations on how to stop oil theft in Nigeria, Orji explained that all the losses that have been incurred over the last decade have had negative impacts on the nation’s economy necessitating the previous administration to form a special panel on oil theft and losses to study the situation.
He urged the current administration to review and implement the recommendations brought forth by the panel during its 5-day retreat which aims to discuss ideas on ways to deal with the current challenges of oil theft, illegal mining, pipeline and other governance challenges that have contributed to the loss of revenues and investment opportunities.
said, “Figures contained in our 2009 to 2020 audits have put Nigeria’s losses to crude oil theft over a 12-year period at 619.7 million barrels valued at $46.16bn or N16.25tn. Similarly, between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.”
Meanwhile, major oil companies have lamented the impact of these issues on the availability of crude for local refineries even as low crude oil production in Nigeria has been cited as a factor limiting international oil companies’ capacity to supply crude to the behemoth Dangote Petroleum Refinery and other modular refineries.
Orji further expressed worries that the nation’s economy is being threatened by the global shift from fossil fuels to renewable energy as the demand for oil declines.
According to him, the global transition from fossil fuels to renewable energy sources poses significant risks to countries that depend heavily on hydrocarbon-based natural resource revenues for survival, adding that, the fiscal problems Nigeria has experienced from short-term disruptions in crude oil and gas output may prompt a much longer-term and permanent decline in demand which would consequently have a far-reaching impact on the country’s economy.
He said, “Our country, Nigeria is heavily dependent on oil revenues for survival. It is within the ambit of this board to support our government and citizens with timely policy decisions and strategies to deal with this unavoidable unfolding development in the extractive sector.
“The fear of the known risks in most of the affected countries far outweighs the potential unknown opportunities except we utilise the immense opportunities within the Extractive Industries Transparency Initiative, its global network and multi-stakeholder framework to search for solutions.
“At current dependency levels, Nigeria already faces significant threats to its economy from the prospect of a permanent decline in global demand for crude oil. The demand for our oil keeps going down daily.”
