Nigeria loses N995.2bn yearly to crude oil, refined products, spillage ― CISLAC

“Using the top-end estimate of lost crude oil at 300,000 barrels per day (BPD), our assessment puts the projected annual loss due to oil theft for 2018 at N995.2 billion based on the current exchange rate price of N305 to US$1.

“This includes the losses due to direct oil theft, sabotage, and spillage,” Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Mr Auwal Musa Rafsanjani disclosed this while presenting the position paper of the Coalition of Civil Society Organisations (CSOs) to the Ad-hoc Committee investigating Oil theft chaired by Hon. Peter Akpatason on Wednesday.”

While reeling out the statistics of crude oil losses allegedly obtained from the Nigeria National Petroleum Corporation (NNPC) and other International Oil Companies (IOCs), the CISLAC boss who disagreed with the NNPC’s position that it has no records of crude oil theft, alleged that the Corporation pegged the revenue losses from crude losses at $1.56 billion and refined product losses at $1.85 billion dollars, while companies operating in the sector puts the figure of crude losses at N38.54 billion.

While giving the conservative estimates of oil losses collated by Nigeria Extractive Industries Transparency Initiative from some IOCs (Shell, Chevron & Agip) self-reporting, he explained that Nigeria lost between 150,000b/day – 400,000b/day (7.5% to 20% of the total production of 2mbd) amounting to $10.9 billion to oil theft from 2009-2011.

He also said quote the same NEITI 2019 report as saying that Nigeria lost $41.9 billion between 2009–2018 averaging $11.47million/day, $349 million/month and $4.19 billion annually.

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He said “while the above figures largely represent figures collected from official sources (presumable obliged by oil companies), they do not necessarily capture other different sources of leakages already identified in this memorandum. Those sources include industrial-scale over-lifting and another pilfering that happen through official channels.”

While acknowledging that there has been an upsurge in the activities of oil theft in Nigeria, Mr Rafsanjani explained that the upsurge reverberated more tragically in August 2019 when the National Economic Council (NEC) headed by Vice President Yemi Osinbajo alleged that 22.6 million barrels of oil estimated at $1.35 billion were ‘stolen’ between January and July 2019.

He said: “Two profound studies by the Nigeria Natural Resource Charter (NNRC) and the Nigeria Extractive Industries Transparency Initiative (NEITI) have also put the country’s loss to oil theft at N4.57 trillion between 2015 and 2018 and $41.9 billion between 2009 and 2018 respectively.

“While there is clarity on what is covered in the figures above, there are a whole lot of other dimensions and trends that were not taken into account when counting the loss to oil theft in Nigeria.”

He also informed the Ad-hoc Committee that in 2016, Federal Government filed a suit against Agip Oil Company and Total E7P demanding $490,517,280 and $145,848,102 respectively being alleged missing revenues from over 57 million barrel of crude oil shipments that were believed to have been shortfall/undeclared/under-cleared crude oil shipments by the oil companies to the United States between 2011 and 2014, while similar suits have been filed against Chevron and ExxonMobil.

While noting that there is the tendency to focus attention on the very small scale manifestations of oil theft, Mr Rafsanjani argued that little or no attention has so far been paid to bigger industrial-scale leakages, which are clearly established by different levels of actors and players involved in the illicit trade.

These include diverse and cross-cutting domestic, regional and international markets (informal and formal) for stolen oil, with instruments for conveyance such as illicit businesses/money laundering.

On his part, Acting Director of Claude Ake School of Government, University of Port Harcourt, Prof. Sofiri Joab-Peterside maintained that the issue of oil theft is a menace to both the economic and survival of Nigeria.

He said “While the government has been focused on dealing with the challenges it poses for a long time, what is known is that such efforts have proved unsuccessful, thus requiring more comprehensive and innovative pathways.

“The coalition of civil society organisations that have submitted this memorandum are of the view that the failure of past efforts in addressing the problem of oil theft in Nigeria is the premise on a non-comprehensive conceptualisation of the diverse dimensions and manifestations of the problem which puts the small scale players in focus at the expense of big-time criminals with a propensity for industrial-scale stealing of the country’s oil.

“It is against the backdrop of the following that the undersigned coalition of civil society working on anti-corruption and extractives is putting forward a combination of lessons learned from the experiences of other countries to complement the myriads of ideas for a possible resolution of the problem in Nigeria.”