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Business News of Wednesday, 30 August 2023


FG loses N1.9tn to oil theft in July –Report

Oil theft (file photo) Oil theft (file photo)

Crude oil theft may have cost the country a whopping N1.9tn revenue loss in July, according to analysis by The PUNCH.

The estimation was arrived at following a pronouncement by the National Security Adviser, Nuhu Ribadu, last week when he led a presidential delegation to inspect oil and gas facilities at Owaza in Abia and Rivers State.

Ribadu said Nigeria was losing 400,000 barrels of crude oil daily due to activities of oil thieves and pipeline vandals.

He added that the country had the capacity to produce 2 million barrels of crude oil per day.

“It is unfortunate that few individuals would steal our common resources, and in the process cause unbelievable loss to the nation, communities and the people,” Ribadu said.

“Nigeria has the capacity to produce two million barrels of crude daily, but we are currently producing less than 1.6 million barrels due to theft and vandalisation of pipelines.’’

“So, we’re talking about 400,000 barrels of crude oil going to waste, with few criminals and economic saboteurs not even getting much out of it,” he said.

Checks by The PUNCH on data provided in the August report of the Organization of the Petroleum Exporting Countries showed that the country’s July crude oil production, as provided by direct sources such as the Nigerian National Petroleum Company Limited and the Nigerian Upstream Petroleum Regulatory Commission, was one million barrels per day.

According to OPEC August report, Nigeria’s crude grade, Bonny Light, against which all other crude grades produced by the country were priced, was sold for $80 per barrel in July. The exchange rate against the dollar was also at N777/$1 in July.

The PUNCH estimation brings total revenue loss to crude oil theft to N1.9tn in July alone.

A professor of Economist at the Olabisi Onabanjo University, Sheriffdeen Tella, told The PUNCH that the economic outlook for this year would remain bleak until Nigeria improves on its crude oil production.

“The global outlook for oil and gas for 2023 will not be much different from that of last year. For Nigeria, it may remain gloomy in terms of revenue unless we are able to improve on production and sustain it, prevent revenue leakages, crude oil thefts and seek new markets for oil and gas,”