The Federal Government has continued to count its losses from crude oil and pipeline vandalism, as the Nigerian National Petroleum Company (NNPC) Limited says it is losing about $700 million every month as a result of the twin menace impacting operations in the Niger Delta region.
The group general manager, National Petroleum Investment Management Services (NAPIMS), Bala Wunti, disclosed this on Sunday during a tour of NNPC facilities in the South Western part of the country.
NAPIMS is the NNPC subsidiary in charge of the Federal Government investments in the] of the industry.
In May this year, Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, the Gbenga Komolafe, said the country lost about N434 billion to crude oil theft in the first Quarter of 2022 alone.
Komolafe said as a result of the twin menace only about 1.35 million, or about 71 percent of the 1.9 million barrels the country has capacity to produce daily at the moment get to the crude oil export terminals.
Consequently, he said these are part of the reasons the country has consistently failed to meet her Organisation of Petroleum Exporting Countries (OPEC) crude oil output quota.
But speaking during the tour on Sunday, Wunti confirmed that the security challenges experienced in the oil sector has seriously hindered oil production in most of the country’s terminals.
He gave seven million barrels as the volume lof crude oil lost daily through theft and pipelines vandalism — particularly those around the Bonny oil export terminal, which he said cannot be operated for several year due to the activities of oil thieves and pipeline vandals.
“When you multiply seven million barrels by the prevailing price of $100 crude oil at the International crude oil market, that translates to $700 million lost in the every month. Add about 150,000 barrels per day that should have been produced, but had to be differed due to security challenges, you would have additional $15million revenue that should have been earned by the country if the oil was produced and exported,” he said.
He cited the case of the Forcados trunk crude pipeline operated by the by Shell Petroleum Development Company (SPDC), which has not been in operation since March 3 this year.
Although Wunti said Forcados oil export terminal was not completely secure due to some challenges, he assured that the NNPC would fix the issues within the next two weeks.
He said the Brass oil export terminal, which is operated by the Nigerian Agip Oil Company and producing about 100,000 barrels of oil per day, was facing a similar challenge of insecurity and vandalism.
“Illegal siphoning of crude oil from oil facilities by criminal individuals and groups impacted on the the revenue to all stakeholders,” he said.
“The impact of the activities by vandals caused low crude oil production, and interrupted gas supply, countrywide and the distribution of petroleum products, refineries’ downtimes, increasing instability in the oil and gas market. But I will tell you the major thing that affects us.
“Nigeria will suffer for it. The revenues are impacted. So, we can only appeal to them to rein in themselves. The oil theft situation is regrettable. It’s not going on across the whole of the Niger Delta. There are trunk lines that are more impactedthan others, and I think the Bonny trunk line ranks highest.
“Our major challenge as a country is our capability to respond and that is as a result of several factors, the terrain as well as some incapacity that we have.
“I was in the Saudi Arabia infrastructure twice, and I know what they have. It’s a digital control system. It’s different from our own Digital control system. Iot’s like you have the control system of all your assets in one place.
“This is beyond the digital control system. It’s also a security system. We are doing it. To tell you that this was built-in by our in-house software engineers because of the security sensitivities to it, because they are customized.
“So we use a combination of technology to integrate and synchronize and create what we are now confident and comfortable with,” Wunti said.