NNPC says the fluctuation in the country’s daily crude oil production levels is due to the persistent attacks on major pipeline arteries supplying crude oil to export terminals.
The Nigerian National Petroleum Corporation, NNPC, said on Tuesday that Nigeria was losing about 150,000 barrels of crude oil per day each time the pipelines connecting the country’s oil export terminals were shut down as a result of vandalism.
The Group Managing Director of the Corporation, Andrew Yakubu, who blamed the fluctuation in the country’s daily crude oil production levels on persistent attacks on major pipeline arteries supplying crude oil to export terminals, said impact of the menace on the economy was enormous.
Mr. Yakubu, who was speaking during his submission to the Senate and House of Representatives Joint Committee on the Medium Term Expenditure Framework,MTEF, for the period of 2014 to 2016, lamented that the continuous crude oil theft, pipeline vandalism and production shut-ins have seriously constrained the sector’s capacity to meet its revenue projection targets.
“The critical and most important point to note here is that when the artery conveying crude oil to the terminals is hit, this reduces our production volume by 150,000 barrels per day,” Mr. Yakubu said. “From February to date, we have witnessed so much breaches, and each time, we go down by about 150,000 barrels per day, bpd.”
The GMD acknowledged the oil and gas sector as a key component of the MTEF, pointing out that any impact on the sector was capable of negatively affecting the revenue flow to the Federation Account where funds accrue for sharing every month among the various tiers of government.
He said the NNPC had looked at the 2014 oil production projections from a realistic point of view, assuring that its management would continue to work in consultation with the National Assembly and other relevant stakeholders to ensure that the petroleum sector continued to play a key role in the sustenance of the national economy.
Noting the efforts of the President Goodluck Jonathan administration to tackle the menace of crude oil theft and pipeline vandalism, Mr. Yakubu said the problem have received the highest intervention which resulted in the constitution of a Committee by the National Economic Council, NEC, comprising of some Governors, NNPC, Department of Petroleum Resources, DPR, International Oil Companies, IOCs, security agencies and other relevant bodies to work out modalities to mitigate the menace.
On the daily crude oil production figure, the NNPC GMD said the figure has been fluctuating between 2.2 and 2.3 million barrels per day, mbpd, as a result of the several incidents of attacks on the arteries since February this year to date.
The NNPC, he said, participated actively in the negotiations that involved the Budget Office of the Federation before arriving at the MTEF, adding that the Corporation would do everything possible to ensure that MTEF was achieved in terms of accruals from the oil and gas projected revenue input.
The Director General Budget Office, Bright Okogu, said the negative impact of crude oil theft and pipeline vandalism, coupled with the discovery of shale oil and gas in the United States, one of Nigeria’s main customer, was responsible for the inability of the NNPC to realize the projected 2.5mbpd crude oil production in 2013.
Chairman of the National Assembly Joint Committee on MTEF, Ahmed Makarfi, said the rationale behind the interface with all revenue generating agencies was to x-ray the workability of MTEF.
The inability of the Federal Government to meet its revenue projections in the 2013 budget resulted in the challenges encountered in the Federation Accounts Allocation Committee, FAAC, to meet its monthly obligations to the three tiers of government, with the states being owed several months in arrears of their statutory allocations.