Nigeria loses N191bn to crude theft, vandalism in Q1- NNPC

Oil-theft09 July 2013, Lagos – Nigeria has suffered a shortfall of N191 billion ($1.23 billion) in the first quarter of 2013, due to drop in crude oil production.

The Nigerian National Petroleum Corporation, NNPC, attributed the drop in production to crude oil theft and the vandalism of major oil pipelines in the oil-rich Niger Delta region.

The NNPC explained that daily oil production within the period fluctuated between 2.1 and 2.3 million barrels per day (mbpd), compared with the projected estimate of 2.48 mbpd.

According to NNPC’s spokesperson, Ms. Tumini Green, “Expectedly, this fall between actual production and forecast in the first quarter of 2013, has resulted in a drop in crude oil revenue of about $1.23 billion (N191 billion) that should have accrued to the Federation Account.”

She also said that due to crude oil theft, the NNPC/SPDC joint venture recently declared a force majeure on Bonny crude. This resulted in the shutting in of 150,000 bpd.

“Investigations showed that 53 break points were discovered along the 97 kilometre Nembe Creek trunkline. Repair work is expected to last about six week.

“We shall continue to work with relevant government agencies both at the federal and state levels to end this incessant crude oil theft and pipeline vandalism. We have the potential to meet the national target of 2.48mbpd if this menace is eliminated,” she said.

The NNPC spokesperson further noted that crude oil theft and pipeline vandalism would continue to degrade the environment, increase operational costs, impact negatively on the image of the country, and reduce revenue accruable to the country.

Crude oil receipts
In the last quarter of 2012 – October to December, Nigeria was estimated to have lost about N426 billion ($2.7billion) from decline in crude oil production.

A Central Bank of Nigeria, CBN Fourth Quarter Economic Report, attributed the decline to natural disaster, oil theft and sabotage to oil infrastructure during the period under review.

As a result, Nigeria’s oil revenue in the fourth quarter of 2012 dipped by N112.6 billion, as gross oil receipts in the Federation Account stood at N1.824 trillion, dropping by 5.8 per cent from N1.936 trillion recorded in the third quarter of 2012.

The CBN data put Nigeria’s crude oil production, including condensates and natural gas liquids at 2.00 million barrels per day (mbd) or 184.00 million barrels during the fourth quarter of 2012, compared to the 2.26 mbpd or 207.92 million barrels recorded in the third quarter, representing a decrease of 0.26 mbd or 11.5 per cent in production level.

The report pegged the average price of Nigeria’s reference crude, the Bonny Light at $112.73 (N17,811.34) per barrel, with crude oil export at 1.55 mbd or 142.60 million barrels in the fourth quarter, compared with 1.81 mbd or 166.52 million barrels in the preceding quarter, representing a decline of 14.4 per cent.

Crude allocated for domestic consumption in the period under review was valued at $4.667 billion or N737.386 billion, while actual allocation of crude oil for domestic consumption was put at 0.45 mbd or 41.40 million barrels.

– Sebastine Obasi, Vanguard.

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