Media reports recently claimed that Nigeria lost the colossal sum of $10.246 billion (about N4.2 trillion) in revenue in the first half of 2022 to crude oil theft. This was due to its inability to meet the daily production quota set by the Organisation of Petroleum Exporting Countries (OPEC). The Federal Government had projected 1.8 million barrels daily crude oil production for the 2022 budget, but the highest production figure recorded in the first half of the year was 1.4 million barrels. This has, in no small measure, put the Nigerian economy on a tight rope. Even before this media report, it was public knowledge that Africa’s topmost economy is being highly imperiled by the activities of oil pipeline vandals and thieves who illegally siphon its crude oil wealth from a network of pipelines that are being administered by big oil companies.

Media reports, quoting insider accounts, further said that in the first quarter of the year 2022, only a paltry 132 million barrels out of the 141 million barrels of oil produced by the country found their way to the export terminals. This translates to a huge loss by Nigeria of 20,000 barrels a day to oil theft, a figure that means millions of barrels of crude oil within a quarter. Indeed, the insider account claimed that the losses to vandals and theft translate to over nine million barrels of oil. Three million barrels are said to be an average of the yearly loss suffered by the country.

The theft of crude oil was reported to have grown from 103,000 barrels per day in the year 2021 to 108,000 barrels per day on average in the first quarter of 2022. This led to a reduction of about 43 percent in Nigeria’s national oil production from March 2020 to May 2022. An organised crime, it is said that the volume of crude being stolen daily from Nigerian oil wells is baffling and humongous. Indeed, it is estimated that a volume as staggering as 100,000 barrels per day is stolen from the country’s wells. At the current international oil rate, no one needs to hazard a guess regarding the colossal loss that this has become to Nigeria. It is said that about 20 percent of Nigeria’s daily crude production is lost to this menace, thus posing great existential threat to the Nigerian oil and gas sector and the Nigerian economy in general.

Crude oil theft and pipeline vandalism have become commonplace in the downstream sector of the Nigerian economy and a perennial problem which needs urgent resolution. The Nigerian experience of crude oil theft is reputed to be one of the worst in its history. The greatest challenge that Nigeria seems to be having with this menace is that it is a crime that is allegedly perpetrated by the elite in the country. Indeed, it is argued that inside this crimping are top security chiefs, top government functionaries and otherwise respected business barons in Nigeria. Apprehending and making examples of them thus becomes a huge problem.

Allegations of laxity have been levelled against Nigerian security agencies following their inability to apprehend the barons behind the highly lucrative but criminal business. The laxity in security and the suspected connivance between the agencies and the barons of oil theft have resulted in significant financial losses for Nigeria. This is highly unfortunate. If this country were a serious one, the news of the colossal amounts of money being lost to oil theft and vandalism should have made the Nigerian government to immediately summon an emergency meeting. The loss of revenue that is attributable to the inability to properly harness resources can be likened to washing hands with spittle when one is by a flowing stream. The shortfall in revenue, which is about a quarter of the 2022 budget, is more than the N4 trillion allocated to fuel subsidy in the budget

When it is ready to address the issue, the government should tell Nigerians. For it to persuade the people that it is indeed serious and is not abetting the subversion of the national wealth, the government should ramp up security in such a way that the top barons involved in oil theft would be identified and dealt with according to the law and in a way that decisively addresses the menace. It is apparent that if it had been small fries who were involved in this national sabotage, they would have been smoked out and dealt with by now.

The loss of oil revenue by Nigeria speaks to the collapse of governance and organisation in the country. OPEC’s quota could not have been allocated outside of the assessment of Nigeria’s endowments in petroleum resources. To now find out that the country is not even able to organise itself enough to produce what would give it the needed revenue is disturbing. Prospecting and producing oil are not rocket science, and for a country like Nigeria without indigenous technical know-how, what is required is diligent organisation and supervision of foreign oil companies contracted for the purpose, to achieve set objectives. Here, Nigeria is found shockingly lacking: it cannot even meet its OPEC quota, even though it needs revenue badly. It has had to rely on humongous loans for national services. This is a situation that calls for critical introspection to get the country to reset itself and its affairs much more competently, so as to defeat this state of perennial ineffectiveness and inefficiency.

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