N2.1trn lost to Niger Delta militancy, vandals in 2016 —FG

The Federal Government has stated that Nigeria has lost N2.1trillion ($7billion) to Militancy in the Niger Delta region and operations of vandals.

NNPC, said from January 2016 till date, the government lost $7 billion (N2.1 trillion) to the activities of militancy groups and oil pipeline vandals in the Niger Delta region.

The Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, stated this during a Retreat of 2016 Fiscal Liquidity Assessment Committee.

In a presentation titled: “Global Oil Prices, Militancy and Terrorism and its Impact on Government Revenue in Nigeria”, Dr. Baru said that apart from security challenges in the region, politics, judiciary, oil prices and production cost continued to impact negatively on the oil industry.

“Over 7000 b/d of crude oil has been lost due to vandalism this year. A bulk of the loss is from JV assets. This implies that 60 per cent of oil production lost is NNPC-FGN equity. At an estimated price of $45 per barrel, the total 2016 revenue loss to the Federation Account translates to about $7 billion.

“This is money that the government could have used to achieve major infrastructural milestones. This loss is equivalent to a new 7,000MW power plant; new 350b/d refinery; over 30 per cent of National budget; and a new 1,700-kilometre pipeline.”

However, Dr. Baru argued that the NNPC has concluded plans to increase the security of oil and gas assets, improve its community social responsibility and the Amnesty programme.

Moreover, following major decline in Federal Government revenue, Dr. Baru argued that, on behalf of the Federal Government, the NNPC planned to renegotiate terms of production sharing contract with International Oil Companies to shore up government revenue base.

“The NNPC will renegotiate terms of Production Sharing Contract with deep offshore operating companies because, with the current agreement, only 17.7 percent of total revenue comes to government,” he said.

The Minister of Finance, Kemi Adeosun, said that the ministry had succeeded in reducing Federal Government’s monthly wage bill from N165 billion to N142 billion by eliminating 33,000 ghost workers.