It is regrettable that Nigeria lost 1.6 trillion naira ($4 billion) in nine months, from January to September 2021, due to the activities of oil thieves. Oil theft remains a major threat to the country’s economy and environment. The country is also losing about 400,000 barrels of crude oil per day, or about $250 million per day. This means that on average, 150,000 barrels of crude are stolen daily by oil thieves. Chairman of Heirs Holdings and United Bank for Africa Plc, Mr. Tony Elumelu recently revealed this to the National Defense College Course 30 members.

Also disturbing is the revelation from Nigeria Natural Resources Charter, a crude oil monitoring think tank that the economy lost 4.75 trillion naira in three years, from 2015 to 2018 due to crude oil theft, while 60 billion naira is said to be spent on repairing vandalized oil pipelines across the country. Over a 10-year period, from 2009 to 2018, the total amount of crude oil thefts reported by oil companies, the Nigerian National Petroleum Corporation (NNPC) and the defunct Directorate of Petroleum Resources (DPR) stood at 41, $9 billion. Latest figures suggest that Nigeria lost a total of 193 million barrels of crude oil in 11 months last year. This poses a great threat not only to the environment, but also to the country’s security. It also has far-reaching implications for livelihoods and health. The statistics on oil theft and vandalism of pipelines are staggering. Between 2019 and September 2021, a total of 1,161 pipeline points nationwide were vandalized.

This put Nigeria on the oil sector map as the most notorious nation in the world for oil theft. Mexico, the second most affected country, has recorded between 5,000 and 10,000 barrels of oil stolen per day. Data from the National Oil Spill Reduction Monitoring Agency shows that between 2015 and this year, the total number of spills recorded in the Niger Delta was 4,919, while the volume of oil spilled in the environment was 235,206 barrels. The revenue lost by the oil thieves who do not pay taxes would have been better used to develop key sectors of the economy such as education, health, housing and improve the welfare of the population. Also, oil companies have lost huge revenue due to frequent vandalism of pipelines. Sometimes oil companies are forced to declare force majeure to avoid serious operational costs.

It is high time for the government to start using technologies such as the use of drones to enhance the role of the Joint Task Force on security operations and the pursuit of vandals. The illegal activities of oil thieves require strategic leadership to address them. In addition, it is necessary to enforce relevant laws and regulations, in accordance with the Environmental Impact Assessment (EIA) Act. The EIA Act ensures that measures are put in place to help reduce environmental effects as well as protect the health of petroleum communities. The need to increase awareness of the negative consequences of oil theft and vandalism has become more urgent now.

In addition, the government should review reports from the Nigeria Extractive Industries Transparency Initiative (NEITI) that the country is losing an estimated $4.1 billion (123 billion naira at the official exchange rate of 305 naira/$) per year in due to incorrect counting of crude oil production. In the report, the oil and gas industry watchdog said that unless the government takes appropriate and urgent action, limitations on crude oil production metering will continue to pose a serious threat to the goal. of the country’s income. Already, the government could only realize 58% of its projected revenue from January to June 2022. This confirms how inadequate oil production could rob Nigeria of severe revenue losses.

To control oil theft, the government should rely on technologies such as the deployment of drones to detect sabotage or a pipeline burst. According to agency data, Nigeria is the only oil-producing country without a meter to determine the precise amount of crude produced at any given time. As a result, placing the facility in all 258 oilfields in the country has become imperative. Such technology will also help reduce recurring instances of oil theft.

In its previous audit reports from 2012 to 2015, Nigeria reportedly lost more than $9.89 billion in crude oil due to poor metering infrastructure. During this period, more than 107 million barrels of oil went unaccounted for.

Given the huge revenue losses and the current volatility in the price of crude oil in the international market, as well as the expected shortfalls, the government should not hesitate to put in place a metering infrastructure. The government should make the laws against oil theft much stricter.