Nigeria has reportedly lost a staggering N2.3tn in oil revenue over the last year due to pipeline vandalism and theft.
This equates to a loss of approximately 65,700,000 barrels of oil, according to Dr Osagie Okubor, the Chairman of Shell Companies in Nigeria.
With the average price of Brent crude oil at $83 per barrel during the period, the country is estimated to have lost as much as N2.3 trillion in oil revenue due to pipeline vandalism and oil theft.
The Trans Niger Pipeline, which has the capacity to transport around 180,000 barrels of crude oil per day, has been shut down for over a year due to oil theft. The pipeline is a critical component of Nigeria’s gas liquids evacuation infrastructure and is essential for domestic power generation and liquefied gas exports.
Speaking at the Nigerian International Energy Summit held in Abuja, Dr Okubor emphasized that pipeline vandalism and theft have had a significant impact on Nigeria’s oil production quota to the Organisation of Petroleum Exporting Countries (OPEC).
He also noted that the situation is having devastating implications on the supply of gas to the Nigeria Liquefied Natural Gas.
The Managing Director of Nigerian Liquefied Natural Gas Limited, Philip Mshelbila, has pointed out that 40% of globally renowned gas firms’ capacity has been lying fallow due to theft. He added that the lack of power to execute the recommendations and policies in the various documents and laws of the oil sector remained a challenge to the industry.
Dr Okubor advised the incoming administration to prioritize the security of oil infrastructure. While Nigeria has numerous frameworks and written documents on how to tackle the various challenges in the oil sector, implementation remains a challenge.
Pipeline security has become a top priority for the Nigerian government, and the Federal Government has reportedly been planning to reopen the pipeline since last October.
However, talks with the Bodo community in the Gokana Local Government Area of Rivers State appear to have collapsed.
It is crucial for Nigeria to tackle pipeline vandalism to avoid further losses and ensure the growth of the country’s oil revenue.
