Nigeria’s oil sector suffers a N34.47 billion loss at the hands of a familiar enemy

The Nigerian National Petroleum Company Limited spent close to N34.47 billion (18 months) to monitor and repair pipelines in order to address the persistent problem of pipeline vandalism in the nation.

According to the Nigerian Extractive Industries Transparency Initiative’s most recent Oil and Gas Report, which covers 2021, N22.05 billion was spent on pipeline maintenance and repairs.

The NNPCL said that a total of 350 pipeline points were vandalized in the first half of 2021. The organization said that it has consistently worked to lessen the threat of pipeline vandalism in cooperation with the local community and other stakeholders.

According to Mele Kyari, the CEO of NNPCL, the company is now able to track product supply and distribution across the nation thanks to the implementation of Operation White and the Automated Downstream Operations and Financial Monitoring Centre.

He said that illegal activities including oil theft and cross-border petroleum product smuggling, which had previously disrupted the supply and distribution matrix and resulted in significant financial losses for the nation, had decreased.

The National Oil Corporation said in January 2021 that 96 businesses from a variety of countries have expressed interest in using the Build, Operate, and Transfer finance model to undertake the renovation of its downstream infrastructure, which includes crucial pipelines, depots, and terminals.

The NNPCL also reported that it spent N12.42 billion between January and June 2022 on pipeline security and maintenance.

Despite spending N34.47 billion on pipeline maintenance and repairs, the NNPCL reported in September of last year that oil theft cost the business 470,000 barrels of crude oil per day, or $700 million a month.

In August, reports according to the Nigerian air force relayed that the Niger Delta region’s illicit oil refineries were bombarded with air raids. The Nigerian army claimed to have attacked a boat carrying crude oil and heading for open seas, as well as many illegal locations in the oil-rich state of Rivers.

Between July 15 and July 21, 2023, 40 instances of crude oil theft were reported across the nation. 93 illicit connections had been discovered and disconnections and repairs are still being made. The NNPCL added that 69 illicit refineries were found and shut down over the time they highlighted.

Source: business insider africa