Oil & Gas
The Nigerian National Petroleum Corporation gives reason for the drop in oil revenue in the first quarter of 2013
| By Maureen Chigbo | Apr. 29, 2013 @ 01:00 GMT
CRUDE oil theft is wrecking the Nigerian economy. In the first quarter of the 2013, crude oil production dropped due to incessant crude oil theft and vandalism along the major pipelines in the Niger Delta. Daily crude oil production during the period fluctuated between 2.1 and 2.3 million barrels per day, mbpd, compared to the projected estimate of 2.48mbpd. Investigations done by the Nigerian National Petroleum Comporation, NNPC, discovered 53 break points along the 97km Nembe Creek Trunkline. Repair work is expected to last about six weeks.
This will further reduce the April and May monthly average to about 2.2mbpd and further decrease crude oil revenue by about $554.0 million (N83 billion) that should have accrued to the Federation Account. “Expectedly, this fall between actual production and forecast in the first quarter 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,” Tumuni Green, acting group general manager, Group Public Affairs Division, NNPC, said Wednesday, April 17.
Green, however, assured that maintenance work would have minimal effect on gas supply to domestic market. “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 2.48 mbpd if this menace is eliminated”, she said. Green added that crude theft and pipeline vandalism continue to degrade the environment, increase operational costs, impact negatively on the image of the country and of course, reduces revenue accruable to the nation. She appealed to all stakeholders to cooperate with the corporation as it strives to eliminate the menace.
Nigeria loses about $7 million annually to crude oil theft. It became so worrisome that Shell Nigeria and Agip-Eni had to shut down some of their terminals. At the Nigeria oil and gas, NOG, conference in February, Mutiu Sumonu, decried the incessant crude oil theft declaring that powers and principalities were behind the crime. He enjoined the government to fish out those involved at home and stop their nefarious activities first. His statement came after Diezani Alison Madueke had said that the federal government was reaching out to countries where the stolen crude is sold to elicit their support to stop the crude oil theft.
The enormity of crude oil theft was captured in the report of the Nuhu Ribadu-led Petroleum Revenue Special Taskforce which said that the theft of crude oil and petroleum products might be be reaching emergency levels in the country. The report had said that volumes of stolen crude had risen dramatically in the past 12 – 18 months. The Royal Dutch Shell Company, Shell, in its presentation to the task force, said that an estimated 150,000 barrels of crude oil are stolen per day (about six percent of Nigeria’s total annual production) causing a revenue loss of $13.5 million per day (at $100 per barrel) which amounts to $5 billion per year of lost revenue.
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