Nigerian govt hinges hope of oil output recovery on fighting $4 billion yearly oil theft

The Nigerian government is stepping up push to quash oil theft activities estimated at $4 billion yearly in the hope that the move will strengthen production which has tumbled by over 25 per cent, Bloomberg reported Thursday citing an interview with Gbenga Komolafe, head of Nigerian Upstream Petroleum Regulatory Commission.

Called “bunkering” in the local parlance, the illicit industry eats away at the country’s daily output by about 10 per cent or 150,000 barrels, according to the watchdog’s head, on account of actions of persons breaching pipelines to siphon oil.

Production slid from 1.7 million barrels per day to 1.5 million January through December last year, causing Nigeria to concede the top oil producing nation on the continent to Libya.

The government is nursing a lofty ambition to double the current figure, Mr Komolafe said, an aspiration that needs more than oil theft crackdown for its actualisation.

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Africa’s largest producer has been plagued by oil theft since the late 1970s as attention shifted to crude following a post-civil war oil boom.

But its vast reserves of oil and natural gas (currently at 206 trillion cubic feet) has brought a wealth of sorrow marked by oil spill disasters, inept and graft-ridden management, decrepit refinery infrastructures as well as years of militancy and restiveness, all of which have positioned it as a poster child for the resource curse.

In naira terms, Nigeria’s annual loss to crude theft is roughly N1.7 trillion, 31.6 per cent bigger than the annual IGR and federal allocation of the nine states of the Niger Delta (the region that produces all the oil) put together, totalling N1.3 trillion for 2020 according to data from BudgIT’s State of States.

“Pretty soon you will see a reverse in that trend,” Komolafe said, hinting that “security strategy” would be deployed.