FG Lost $1 Billion in Revenue in Q1’22

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CEM REPORT | The Federal Government lost $1 billion in revenue in the first quarter of the year resulting from crude oil theft, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed.

The Commission’s head, Gbenga Komolafe, in a statement, stated that from the 141 million barrels of oil produced in the first quarter of 2022, only about 132 million barrels of oil were received at export terminals.

He said: “this indicates that over nine million barrels of oil were lost to crude oil theft… this amounts to a loss in government revenue of about $1 billion… in just one quarter,” Reuters reports.

He further noted that that crude oil theft has increased to a daily average of 108,000 barrels in the first quarter of 2022 from 103,000 barrels in 2021.

“this trend poses an existential threat to the oil and gas sector and by extension, the Nigerian economy if not curbed”; Komolafe said

This is a major contributor to the country’s inability to meet its Organisations of Petroleum Exporting Countries and allies (OPEC+) quota of 1.799 million barrels per day.

Recall that Nigeria has been unable to meet its crude oil production allocation for several months consecutively recording a decline of 80,000 barrels per day in June.

In May, Nigeria recorded a lost of 45,000 barrels per day, making it the largest laggard among the countries not exempted from the 2020 output deal.

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Earlier, founding MD/CEO of Seplat Energy and Executive Chairman AA Holdings, Austin Avuru, warned that Nigeria’s oil production has reached an emergency critical status. He stated that some oil production wells don’t get to see 80% of production making it to the terminals due to oil theft.

The theft resulted in the Bonny Oil & Gas Terminal, a pipeline that transports crude from the oil-rich Niger Delta to export vessels among other places, declaring a state of force majeure, which made the atmosphere unfriendly and discouraging for investors.

Although Nigerian President Muhammadu Buhari has vowed to eliminate oil theft and has established special tribunals to address the issue, it still happens.

Meanwhile, Nigeria’s oil minister, Timipre Sylva, has said Nigeria would be able to meet its OPEC output limit by August.

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