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Oil Bunkering, Theft, Costs Government an Estimated $7 billion Yearly – IEA

By on November 14, 2012

The International Energy Agency, yesterday disclosed that Nigeria loses about $7 billion to oil theft every year.

This information was contained in the agency’s monthly report released on Tuesday, it said, “Oil bunkering, or theft, costs the government an estimated $7bn in lost revenue per year.”

The report said oil firms in most cases cut output because of pipeline damage incurred from theft and sabotage.

It also said Nigeria’s oil output has been pushed to the lowest level for more than two years in October by theft, flooding, and sabotage.

The report also said oil production in the country fell down to 1.95 million barrels per day (bpd), however, in recent months the country maintained a production level between two million and 2.5 million barrels per day.

The drop from September to October was around 110,000 bpd, it said, leaving Nigerian production at “the lowest level in around two and half years.”

“By early November, production levels were recovering, with export schedules showing increased volumes for December,” it said.

The production was just enough to keep the country still ahead as Africa’s top producer ahead of Angola at 1.79 million bpd but not without caution of what could happen if production remains stagnant.

After the 2009 amnesty deal for militants in the Niger Delta, Nigerian oil production sharply rebounded, while before then production fell down to almost half.

Theft, environmental factors, as well as the long-stalled overhaul of Nigeria’s oil industry that has created uncertainty among energy firms are some of the factors that would determine the future output of the Nigerian oil sector.

The US has always been Nigeria’s biggest market but with the boost in oil production in the United States, it is expected that Nigeria will hunt for new markets because the United States might not need to buy oil by 2020 as the country is projected the world’s top oil producer by 2020.

Although the Federal Government has been seeking for years to clean up the country’s oil industry, it seem to be moving too slow.

On the same matter, the President sent a fresh version of the bill to parliament in July, but lawmakers are yet to resolve on it.

One Comment

  1. Nura

    November 14, 2012 at 10:41 pm

    Where are d guards?