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Business News of Thursday, 4 August 2022

Source: www.punchng.com

Nigeria’s revenue suffers blow as 180,000 pipeline ceases to function due to oil theft

File photo to illustrate the story File photo to illustrate the story

Nigeria’s economy received a further blow recently as an oil pipeline with the capacity to move 180,000 barrels of crude daily across Nigeria was hit by oil thieves, forcing it to halt the transportation of oil since June.

This further worsens the various incidents of crude oil theft which have become a challenge in the upstream sector, which stakeholders see as organised.

Bloomberg quoted an insider who is familiar with the issue as saying that the Trans-Niger pipeline has not been officially closed with the communication bandwidth which is about 15 per cent of the country’s average daily output.

Analysts have said oil theft is responsible for Nigeria’s failure to meet OPEC’s output quota as recent efforts by the Nigerian government to combat oil bunkering have been futile which makes oil theft one of the most chronic problems facing the Nigerian oil industry.

Oil producers have been left to receive only 5 per cent of all the crude volumes transported through the pipelines between October last year and February 2022.

The Trans-Niger Pipeline’s 180,000 barrels daily capacity represents about 15 per cent of Nigeria’s daily output quota of 1.772 million barrels set by OPEC for Nigeria.

According to Business Insider. Nigeria has been pumping about 534,000 barrels daily, which is about 30 per cent lower than its daily output quota.

A report by International Energy Agency (IEA) in June said that crude oil producers like Nigeria have failed to advantage of the hike in oil prices because of their inability to scale capacity.

Legit.ng reported that an OPEC report said that Nigeria’s oil production crashed by about 14.94 million barrels in Q2 of 2022. The report was for June of 2022.

The figures issued by OPEC said that the average cost of crude in the second quarter of 2022 shows that Nigeria’s earnings fell by about N703.76 billion which is the price of 14.94 barrels of crude oil in the period under review.

The Punch report said that OPEC’s crude oil analysis was based on direct communication from its 13 member countries, saying that in the first quarter of 2022, Nigeria produced N1.299 million barrels of oil per day.