Unknown criminals in Nigeria have been stealing huge volumes of crude oil pumped through the Trans Niger Pipeline, a major pipeline crisscrossing through the creeks of the country’s Niger Delta region. Business Insider Africa understands that only 5% of all the crude oil that were pumped through the pipeline between October 2021 and February 2022 were received by producers. The rest were lost to illegal oil bunkering, a problem that seems to have taken a turn for the worse since global oil prices skyrocketed.
And now, some prominent stakeholders are voicing their frustration over the problem. Notable billionaire Tony Elumelu, who owns huge stakes in Tenoil, sent out a series of fiery tweets earlier this week saying:
“Businesses are suffering. How can we be losing over 95% of oil production to thieves? Look at the Bonny Terminal that should be receiving over 200k barrels of crude oil daily, instead it receives less than 3,000 barrels, leading the operator Shell to declare force majeure which has taken a toll on their businesses. Why are we paying taxes if our security agencies can’t stop this? It is clear that the reason Nigeria is unable to meet its OPEC production quota is not because of low investment but because of theft, pure and simple!”
Last week, another prominent stakeholder and founding Managing Director of Seplat Petroleum, Austin Avuru, released a report in which he warned that oil production in Nigeria is now in an emergency, critical state due to oil theft. In the report titled “Reining in the Collapse of the Nigerian Oil Industry”, Avuru disclosed that some oil producers no longer get to see as much as 80% of their production making it to the terminals. He also urged the authorities to do something about the problem.
Bloomberg quoted the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to have said that pipeline vandalism and oil theft go hand-in-hand. Unfortunately, the problem now portends serious financial implications for Nigeria whose economic mainstay is revenue generated through oil sales. As you may well know, Nigeria is Africa’s largest crude oil producers. Unfortunately, the country has recently been struggling to meet the quota set for it by OPEC. What this also means is that Nigeria is failing to take advantage of the surge in global oil price.
Meanwhile, the Nigerian Government has reiterated its commitment to tackle the problem. According to Nigeria’s Minister of State for Petroleum Resources Timipre Sylva, “We are determined to stop it, because we know that we can ill-afford the continuation of this insecurity in the oil industry.”