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Kingsley Nwezeh and Adedayo Akinwale in Abuja
The Speaker, House of Representatives, Hon. Tajudeen Abbas, has decried that large scale oil theft was hampering Nigeria’s oil production for the past two decades.
This was just as the Defence Headquarters (DHQ) yesterday, disclosed that that troops recovered 6,652,250 litres of stolen crude oil, 3,558,325 litres of illegally refined Automotive Gas Oil (AGO), 288,650 litres of kerosene and 64,600 Premium Motor Spirit (PMS) valued at N4 billion in the last three months from the Niger Delta region.
Continuing, the Speaker of the House of Representatives, who spoke yesterday, while declaring open the public hearing by the ad hoc committee on the need to investigate oil theft and loss of revenue accrued from the oil and gas sector in Nigeria, said it was common knowledge that investment in the oil and gas sector had declined in the past few years owing to global financing constraints and the overall response to energy transition considerations.
Abbas, who wa represented by the Chairman, House Committee on Petroleum Upstream, Hon. Alhassan Doguwa said: “However, we must agree that the greatest challenge to optimising crude oil production in Nigeria is the grand scale oil theft that has plagued the sector for the past two decades.”
The Speaker noted that the country today faces a major fiscal crisis. He explained that the 2023 Appropriation Act contains a total expenditure of N21.83 trillion and a projected total revenue of N10.49 trillion, saying this leaves a budget deficit of N11.34 trillion, while the country was expected to rely on domestic and external borrowing to cover the deficit.
Abbas added that the projected revenue was based on an assumption of daily crude oil production of 1.69 million barrels per day and a benchmark oil price of $70 per barrel. He noted that global recovery from the Covid-19 pandemic and the ongoing war between Russia and Ukraine continued to cast a cloud of uncertainty on the oil and gas industry.
The Speaker pointed out that while the average international price for Brent crude oil hovered slightly above the set benchmark price since January, Nigeria’s daily oil production had performed poorly due to a number of reasons. He further lamented that crude oil theft had drastically hampered the growth of Nigeria’s oil production.
Abbas stressed that it was reported that Nigeria loses between five and 30 per cent of its crude oil production on a daily basis.
He said, data available through the yearly reports of Nigeria Extractive Industries Transparency Initiative (NEITT) showed that Nigeria’s oil production declined from 2.51 million barrels per day in 2005 to 1.77 million barrels per day in 2020.
The Speaker added that NEITI reports also showed that 619 million barrels of crude valued at $46 billion were stolen in the period 2009-2020.
His words: “Nigeria has continually failed to meet its daily production quota as set by the Organisation of the Petroleum Exporting Countries (OPEC). “Recently, Nigeria’s OPEC quota was reduced from 1.742 million barrels per day to 1.38 million barrels per day.
“Yet, the country is still struggling to meet this quota as daily production output was 1.184 million barrels per day and 1.249 million barrels per day in May and June 2023 respectively.
“On the average, current daily production output is a far cry from the budget assumption of 1.69 million per day. The implication is clearly manifest in the economic crisis that the country is facing.”
The Speaker said the House was concerned that if decisive actions were not taken urgently, the country might be thrown into deeper fiscal crisis due to dwindling revenues from the oil and gas sector engendered by crude oil theft.
He said, hence, the decision to set up the Ad Hoc Committee in line with the National Assembly’s determination to continue to reform the oil and gas sector and ensure the optimisation of the sector’s potential for the benefit of Nigerians. The Speaker said the Committee was expected to investigate crude oil theft and other related channels of revenue loss with a view to identifying measures that could be taken to curb the huge revenue and economic losses to the country.
Earlier, the Chairman of the ad hoc committee, Hon. Kabiru Usman, said the volume of losses occasioned by oil theft and its associated impact on the economy was completely unacceptable and cannot be tolerated by any government who sincerely loves its citizens.
He lamented that the way and manner this act of sabotage and breach on national security and sovereignty was carried on daily makes a caricature of the acclaimed status of the armed forces.
Usman added: “It is an affront on government and its institutions, which must be tackled without further delay.
“It is in the light of these that the House constituted this committee and determined to bring this ugly trend to an end otherwise there may be no future for our remaining children who have not yet ‘japa’ to other countries in search of survival.”
