According to regulators, Nigeria has lost its status as Africa’s largest crude oil producer to Angola due to the daily loss of 470,000 barrels of crude oil to theft and pipeline vandalism. The most recent oil market report by the International Energy Agency, which was released last week, further stated that the decline in the country’s production of crude oil has led to its drop to the third position among the largest crude-producing countries in Africa.
The challenge with oil thefts and vandalism makes it difficult for the country to meet up with the 1.8 million barrels per day (bpd) production quota set by the Organization of Petroleum Exporting Countries (OPEC). OPEC stated that with the decline, Angola and Libya has overtaken Nigeria in oil output. President Muhammadu Buhari also lamented that the crisis that has befallen the country’s revenue is an effect of activities of dishonest citizens through the theft of the main contributor to Nigeria’s revenue base crude oil.
The crude output of the country in August averaged 972,394 bpd.
In a bid to tackle the challenge currently confronting the country’s crude oil, security forces stated that they would step up a crackdown on the thieves in the Niger Delta region, the country’s oil-rich state. Between April 2022 to September 2022, over 100 thieves have been arrested, while the authorities have also seized oil assets worth about 30 billion Naira ($70 million). To ensure a stop to the operation of illegal refinery sites, the Nigerian Navy has confirmed non-stop operations in all its bases in the Niger Delta.
For several years, theft and pipeline vandalism has crippled the Nigerian oil sector, without reverence to the government and rendering every security measure useless. Resultantly, experts believe that there is an unprecedented economic impact on the finances and economy of the country, which happens to be the largest in Africa. The government data reports that the crude output of the country in August averaged 972,394 bpd, revealing a multi-decade reduction. Asides theft and vandalism, factors like severe underinvestment in the oil sector and spills from damaged pipeline has affected the oil production capacity of Nigeria.
FG launched a mobile application to monitor oil theft.
Local authorities have allegedly said that Nigerian security forces are accomplices with the oil thieves, while the Nigerian Navy also claims that people with in-depth knowledge about the oil industry are likewise involved in the theft. The Navy’s spokesman, Commodore Adedotun Ayo-Vaughan, in a statement, further asserted that there exists a lot of connivance with retired oil workers from the Niger Delta likewise several compromise by some of the employees who work in the international oil companies.
The most recent effort made by the federal government to tackle the challenge is the launch of a mobile application to monitor oil theft. However, analysts argue against the sincerity of the government. This is because thieves and pipeline vandals have sourced a way of bypassing introduced measures, one of which includes the insertions added to pipelines for the diversion of supplies. Although crude oil has been essential in the growth of Nigeria’s infrastructure, with its account of 41% of the total government revenue in 2021, translating to 4.34 trillion Naira ($10.1 billion) in earnings, the challenges confronting it limit its impact in the economy.
Unsolved problems in the oil sector would discourage investment.
A Lagos-based oil and gas expert, Olufola Wusu, stated that the economic impact tactic adopted by oil thieves in the Niger Delta region has worsened compared to the past, however if not properly addressed, there would be further discouragement of investment. Other challenges confronting the oil industry include inadequate pipeline infrastructure, fire outbreaks, pollution, poor gas funding, unreliable gas supplies, fuel pricing, oil spillage, inadequate security, and many others. These problems affect the oil and gas industry of Nigeria, posing a threat to the country’s revenue.
The content on AskNigeria.com is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. AskNigeria.com accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.
Fact Checking Tool – Snopes.com