NEITI: Nigeria Does Not Know Its Daily Oil Output 59 Years after First Export

•   Says country earned $715bn from oil in 34 years

Chineme Okafor in Abuja

The Nigeria Extractive Industries Transparency Initiative (NEITI)  thursday disclosed that 59 years after Nigeria exported its first vessel of oil, it still cannot state precisely the amount of oil it produces every day from her oil fields in the Niger Delta.

It said the country has continued to rely on production figures supplied by operators in the industry, but do not have an independent verification of the figures.

NEITI also stated that the total amount of monies earned in 34 years – between 1981 and 2015, by Nigeria from the sale of crude oil was $715 billion.

Speaking at the third edition of the annual lecture of the Dauda Adegbenro Foundation at the University of Ibadan in Oyo State, the Executive Secretary of NEITI, Mr. Waziri Adio, stated that over the years, Nigeria has been unable to make the most of what it earned from its oil, as well as failed to place meters to verify her production volumes.

Adio also stated that the increasing volatility in oil prices and the commodity fast losing its once glorious relevance in the global energy mix meant that Nigeria has to quickly cut off its overreliance on oil.

A text of his presentation titled: ‘Transparency in the Extractive Sector: Driving Wealth Creation and Sustainable Revenue as Solution to Economic Recession,’ was made available to THISDAY in Abuja.

He explained in the presentation that Nigeria’s exit from an economic recession was partly influenced by the gradual rise in the fortunes of crude oil, that is, price gains and Nigeria’s production growth.

“We need to know exactly how many barrels of crude oil we produce, not just how many barrels that we export. NEITI’s first audit report (covering the period from 1999 to 2004) claimed that Nigeria did not know or could not independently and scientifically state its oil production beyond the say-so of the operators.

“The situation remains the same, 11 years after that report was released, 59 years after we exported our first vessel of oil and 61 years after we discovered oil in commercial quantity in Oloibiri, in present Bayelsa State,” he stated.
Adio claimed that the NEITI had recommended the need for multi-phased, calibrated meters at oil well-heads, flow stations and export terminals, but this was yet to be considered by the government.

Speaking on oil earnings, he stated: “We need to come to terms with the reality that a natural resource-led development approach leads to a mirage. From 1981 to 2015, Nigeria earned a total of $715 billion from oil.

“It is a lot of money, but not an awful lot when you take our population size and developmental needs into consideration. And for perspective, the market value of Apple is $751 billion. That is just one company.”
He further explained: “Time is not on our side: our oil will run out in 38 years; the world is rapidly moving beyond oil, as countries embrace electric vehicles and even the oil majors are moving to gas.

“Yes, there are other uses of oil beyond gasoline and we are more of a gas than an oil country. But the glorious days of oil and even other natural resources seem numbered. We might be lucky to experience another boom before the bottom falls off. Now is the time to optimise, to manage transparently and prudently, and save for the rainy days and the future, whether prices are high or low.”

On the linkage between Nigeria’s economic recession and her oil, he said: “After five consecutive quarters of negative growth, national productivity returned to positive territory in Q2, 2017 with 0.55% rate. One of the major reasons we exited recession was because of positive growth in the oil and gas sector based on increased oil production and higher oil prices.

“In a way, we can say that the oil sector took us into recession and took us out of it. We need to be alive to the danger of a double-dip and prevent that from happening. No doubt the exit from recession should be celebrated. But as many have said, the growth is still fragile, not widespread or deep enough. Most importantly, we need to delink our economic fortunes from the fate of oil prices.”