Oil theft, especially in a developing country like Nigeria is a major factor in the country’s declining economic growth.
Experts revealed that in 2021 alone, Nigeria’s oil revenue loss was $3.5 billion, amounting to about 10 percent of the country’s foreign reserves. The year ended with a report that Nigeria, the largest oil and gas producer in Africa, experienced a deficit of almost 200 million barrels of crude in the first 11 months of the year, mainly due to oil theft.
In November 2015, thieves stole $250 million worth of crude from just one pipeline, around half a billion liters. With this incessant oil theft crime, it is almost impossible for to meet its OPEC quota of 1.68 million bpd of crude for January 2022.
A report by OilPrice revealed that cartels in the Niger Delta region generally steal crude by ‘hot tapping’ – attaching a secondary pipeline to a mainline, or ‘cold tapping’ – blowing up a pipeline and replacing it with their own. They then export this oil illegally to countries such as Ghana, Cameroon, Cote d’Ivoire, and South Africa while some even reach the international market, with exporters bribing officials that control the transportation of the product to turn a blind eye.
Investors King also gathered that this menace is gradually driving international investors away, as oil majors are now taking their money to more reliable markets with better monitoring and surveillance practices.
Remarkable examples are Shell, ExxonMobil, Chevron, and Total who have all already moved their operations to other regions, despite Nigeria being Africa’s biggest producer.
In view of this, there is a need to invest more in technologies that could monitor oil.
A report on ‘5 Emerging Technologies That Will Make Natural Gas Exploration & Production Safer In 2020’, noted that the oil and gas industry has begun to benefit from the development of more advanced technology.
With the development of this technology, oil and gas companies have been able to use sources of technology that are smarter and which are also more efficient.
According to the report, these oil and gas software solutions include artificial intelligence, big data analytics, electric monitoring, and drone technology.