A new report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria lost approximately 362.28 million barrels of crude oil between 2014 and 2023 due to measurement errors, sabotage, and production adjustments. This equates to an average daily loss of about 992,547 barrels over the ten-year period.
The findings were disclosed in NEITI’s latest report titled, Oil & Gas Industry Audit 2023, which assessed the physical, process, and financial flows within Nigeria’s oil and gas sector. NEITI’s data review was compiled from multiple sources, including submissions by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and reports from oil companies such as the Nigerian National Petroleum Company Limited (NNPC).
Crude Oil Deferments and Infrastructure Issues
The report highlighted that crude oil production deferments—stoppages due to repairs, maintenance, pipeline breaks, leaks, or poor equipment—amounted to 110.66 million barrels during the review period. NEITI noted that outdated and corroded pipelines were a key factor exacerbating the losses.
A detailed breakdown of the losses showed a significant increase over the years. For instance, in 2014, crude oil losses were recorded at one million barrels. This spiked dramatically by 2,612% to 27.12 million barrels in 2015. The highest loss was recorded in 2016, when Nigeria lost 101.6 million barrels, equating to 278,356 barrels daily, which resulted in a potential revenue loss of $4.6 billion, given the average crude oil price of $46.07 per barrel that year.
Impact of Crude Oil Losses on Revenue
Over the years, Nigeria has seen fluctuating crude oil losses, with 36.46 million barrels lost in 2017, 53.28 million barrels in 2018, and 42.25 million barrels in 2019. However, the losses dropped to 39.08 million barrels in 2020, 17.57 million in 2021, and 36.69 million barrels in 2022. In 2023, the country recorded a significant reduction, losing just 7.68 million barrels, a 79% decrease from the previous year.
The 2023 losses, which represented 3.33% of total production, were attributed to measurement errors (1.3%), theft and sabotage (2.3%), and production adjustments (0.21%).
NEITI’s Recommendations
To address these significant crude oil losses, NEITI has recommended that the Nigerian government consider public-private partnerships (PPP) to deploy advanced digital solutions to reduce crude oil theft and enhance operational efficiency. The agency also suggested setting up a special fund and standby committee dedicated to crude oil loss prevention and security of oil and gas assets.
Additionally, NEITI called for the creation of a database to monitor and aggregate petroleum product losses to ensure optimal resource availability.
These findings underscore the need for Nigeria to ramp up production and improve accountability in its oil and gas sector, as the country continues to grapple with the challenges of fully leveraging its oil reserves.
