FG loses 13.21 million barrels of oil worth N603.64 billion in 2022


Monthly reports from the Nigeria Upstream and Downstream Petroleum Regulatory Commission show that Nigeria lost a huge amount of revenue due to massive oil theft between January and August this year, OKECHUKWU NNODIM and STEPHEN ANGBULU report

Nigeria lost an estimated 13.21 million barrels of crude oil worth an estimated N603.64 billion between January and August this year, according to an analysis of monthly crude oil and condensate production reports from Nigeria. country.

Figures in the reports, obtained on Sunday from the Nigeria Upstream and Downstream Petroleum Regulatory Commission in Abuja, indicate that the country’s oil production only increased in two months but slumped in others.

Total crude oil production (without condensates) in January, for example, was 43.35 million barrels, but fell to 35.22 million barrels in February, indicating a loss of 8.13 million barrels.

It rose in March, rising 3.14 million barrels to close at 38.36 million barrels in the third month of 2022.

However, this was not sustained as production fell to 36.58 million barrels in April and the country lost 1.78 million barrels in that month.

The losses continued in May after oil production fell to 31.76 million barrels, representing a loss of 4.82 million barrels from what was produced the previous month.

It rose in June to 34.75 million barrels, representing an oil production gain of 2.99 million barrels, but that was short-lived as production fell again in July to 33, 6 million barrels, which means the country lost 1.15 million barrels in July.

Oil production losses continued in August, collapsing further to 30.14 million barrels, a loss of 3.46 million barrels.

It was observed that the total losses amounted to 19.34 million barrels, while the gains were 6.13 million barrels, leaving a cumulative loss of 13.21 million barrels during the reporting period.

For oil prices over the same eight-month period, data from countryeconomy.com, an international analysis firm, showed that the average monthly costs of Brent, the global benchmark for crude, were 86, $51/barrel in January, and $97.13/barrel in February. and $117.25/barrel in March 2022.

In April, May, June, July and August 2022, the average cost of a barrel of crude was $104.58, $113.34, $122.71, $111.93 and $100.45 respectively. This implies that the average commodity cost over the eight month period is $106.74/barrel.

Losing 13.21 million barrels and multiplying by $106.74/barrel, this implies that Nigeria lost about $1.41 billion or 603.64 billion naira (at Sunday’s official exchange rate of 428.1 naira/$), over the eight-month period.

The collapse of Nigeria’s oil production has been attributed to the massive oil theft in the Niger Delta, which has been met with widespread condemnation and protests from oil workers.

The Independent Petroleum Marketers Association of Nigeria’s national public relations officer, Chief Ukadike Chinedu, told our correspondent that while there may be inconsistencies in the data on oil thefts, the volume of crude stolen in the country was huge.

He said: “Regarding the amount of oil stolen in Nigeria, the various figures you see are all estimates. There is no precise gauge to measure stolen crude oil volumes in this country because we do not have a standard measurement system.

“But due to the recent incident of a vessel being intercepted for allegedly attempting to steal crude oil from Nigeria, we believe a measurable amount of our crude oil is going unaccounted for.”

He added, “I also know that Nigeria is losing a lot of revenue because of this oil theft and the stakeholders are not happy with the way the cartel involved is handling the matter.

“So it is relevant that the federal government produce a standard measuring instrument that will give the exact number of daily production, export consumption and the amount reserved, as well as what we channel for local use.”

Last week, the Petroleum and Natural Gas Senior Executives Association of Nigeria held protests in Abuja, Lagos, Kaduna, Warri, among others, to address the continued theft of crude oil in Nigeria.

Furthermore, the Executive Secretary, Nigeria Extractive Industries Transparency Initiatives, Orji Ogbonnaya-Orji, said in an interview that the 2021 Petroleum Sector Audit Report will be ready this year to determine the level of oil theft across the country.

“We want to establish how much crude is produced, how much can be accounted for and how much has been stolen. We should establish how much was exported, set aside for local consumption and how that was set aside or managed,” he said.

NNPCL deploys a digital system to combat vandalism

Meanwhile, the Nigerian National Petroleum Company Limited said it lost 470,000 bpd to crude oil theft, particularly those perpetrated in the oil-rich Niger Delta region.

The loss, he said, had prevented him from meeting his production quotas set by the Organization of the Petroleum Exporting Countries. This represents $700 million lost monthly between March and September 2022.

However, the company said it had assembled a range of digital control systems to limit losses.

The Group Managing Director, National Petroleum Investment Management Services, Bala Wunti revealed this to reporters in Abuja.

According to Wunti, the pipelines, especially those around the Bonny terminal, cannot be operated due to the activities of the criminals.

He said, “If you produce 30,000 barrels a day, every month, you get 1,940 barrels. So that means you can take it to 270 every four days, calculate it in a month; you’ll have seven cargoes in a million barrels, that’s seven million barrels.

“When you multiply seven million barrels by $100, or $700 million lost per month, about 150,000 expected barrels are delayed, we are not producing due to security concerns.

“Shell Petroleum Development Company’s main line, the TNP Transnational Pipeline cannot be operated and it has been like this since March 3 when we put in place. Just take your calculator, 150,000, that means that if you want to get to a million barrels a day, that means every week at least, roughly for one week only, that’s four cargoes; and four cargoes are four million barrels.

The GGM said the impact of the vandalism on the pipelines resulted in low crude oil production, disruption of gas supply, disruption in the distribution of petroleum products nationwide, downtime of refineries and growing instability in the oil and gas market.

“Nigeria will suffer; revenues are impacted, so we can only ask them to control themselves, the situation of oil thefts is regrettable. This is not happening in the whole Niger Delta, there are main lines that are more impacted, I think the Bonny main line is the highest.

“Our main challenge as a country is our ability to react and that is due to several factors, the terrain as well as a certain inability that we have.”

Regarding the company’s efforts to contain the threat, Wunti said the NNPCL was deploying technology to monitor illegal activities around its facilities in the streams.

“I’ve been twice in the infrastructure of Saudi Arabia and I know what they have. It’s a digital control system; it’s different from ours. The digital control system, it’s as if you had the control system of all your assets in one place.

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