? Nigeria sees $10.048b in well development, rigs hit record high

? Operators turn to costly barging, abandon pipelines for new terminals

Nigerian elites and their international collaborators may have stolen over $25.7 billion crude oil in the past 23 years, fueling poverty, revenue shortfall and public debt, which currently stands at N149.4 trillion.

According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), between 2002 and 2025, about 353 million barrels of crude oil were stolen from Nigeria?s Niger Delta.

This volume is equivalent to roughly 56.1 billion litres or 1.2 million fuel tankers of 45,000-litre capacity each.

If sold at the current $73 per barrel average price of Nigeria?s crude, the stolen crude would amount to about $25.7 billion (N39.3 trillion) in losses, approximately 72 per cent of the country?s entire 2025 budget.

In addition to the direct loss of crude, Nigeria continues to fritter away resources on securing oil installations.

The 2023 audit report of the Nigerian National Petroleum Company Limited (NNPCL) revealed that the company spent N267.98 billion on security-related pipelines within 16 months, averaging N16 billion per month.

Most stakeholders, including the NNPC Limited, had described oil theft as an organised crime linking it to elite Nigerians, who can finance their ways in hiring vessels and experienced people to tap into pipelines and wellheads while evading Nigerian military.

While Nigeria did not experience crude oil theft from 1999 to 2001, in 2002, with an average daily loss of 11,800 barrels, the country recorded a total of 4.3 million barrels of stolen crude.

Oil theft surged in 2003, reaching 64,900 barrels per day (bpd) and 23.7 million barrels in total in the year. The following year saw even higher daily losses of 69,200 bpd (25.3 million barrels). Although the daily average dropped to 55,600 bpd in 2005, annual losses still hit 20.3 million barrels.

These years coincided with rising militancy and pipeline vandalism in the Niger Delta.

With the amnesty programme for militants, losses dropped significantly from 2006, when daily averages fell to 19,700 bpd (7.2 million barrels). By 2009, theft had declined to 8,500 bpd (3.1 million barrels). The brief rebound in 2010 to 17,800 bpd (6.5 million barrels) came amid intensified sabotage, even as discussions around the federal amnesty programme began to take root.

Theft returned with more force in 2011, reaching 33,000 bpd (12.1 million barrels), before doubling in 2012 to 70,700 bpd, resulting in a loss of 25.9 million barrels, the second highest in the period.

In 2013, the average dropped slightly to 50,800 bpd (18.5 million barrels), still indicative of widespread sabotage and illegal bunkering.

Despite efforts to curtail it, crude theft remained persistent. In 2014, daily losses averaged 49,600 bpd (18.1 million barrels), falling modestly to 40,700 bpd (14.9 million barrels) in 2015. In 2016, a more significant drop to 20,700 bpd brought annual losses to 7.6 million barrels.

A fresh spike was recorded in 2017 with 33,100 bpd (12.1 million barrels), followed by 47,800 bpd in 2018 (17.5 million barrels), and a major rise in 2019 to 64,200 bpd, totalling 23.4 million barrels. These figures mirrored a return to pre-amnesty levels of theft.

In 2020, daily losses averaged 71,200 bpd (26.1 million barrels), rising to an unprecedented 102,900 bpd in 2021, with a record 37.6 million barrels lost.

Although there was a reduction in 2022 to 57,200 bpd (20.9 million barrels), the damage to production capacity, especially in the Bonny and Brass terminals was severe.

Following intensified government intervention strategies, both kinetic and non-kinetic, theft dropped drastically in 2023 to 11,900 bpd (4.3 million barrels) and remained around that level in 2024 with 11,300 bpd (4.1 million barrels). As of May 31, 2025, the average had further reduced to 11,100 bpd, amounting to just 1.67 million barrels so far.

Many operators in the Niger Delta have abandoned their wells due to the evacuations crisis with most players now result to barging instead of using pipelines.

Last month, Green Energy International Ltd commissioned a 350,000 bpd capacity export terminal in Port-Harcourt, Rivers state, a development which stakeholders said would return about 40 indigenous oil producers, who had abandoned their fields due to oil theft.

Similarly, while major export lines like the Nembe Creek Trunk Line (NCTL), pushing the operators, Nembe Exploration and Production Company Limited out of business for 12 months and reducing Nigeria?s oil production by about 100,000 barrels per day, the company told The Guardian it resorted to barging and reduce it losses from about 90 per cent to five per cent. This is because of improved control over the evacuation process and collaboration with host communities.

The company?s Group Managing Director, Victor Okoronkwo, had noted that the company is working on a new terminal infrastructure, which if completed, would see the organisation produce as much as 120,000 bpd.

Given the crisis, oil production in Nigeria remains below the 2.06 million bpd benchmark set in the FG budget. Current levels hover around 1.4 million bpd, putting pressure on government revenue and foreign exchange (FX) reserves. Unlocking underutilised fields like those in Nembe have thus become a top priority.

A geologist and publisher of African Oil and Gas, Toyin Akinosho, noted that Nigeria?s biggest bottleneck is not geology but evacuation.

?In March and April 2025, we were stuck at 1.4 million barrels daily, mainly due to infrastructure outages like the 14-day pipeline shutdown. More evacuation hubs create redundancy, giving the industry the flexibility it needs,? he said.

This comes as oil rigs in the country, which were about 18 in 2019 moved crashed to 10 in 2020 but moved sharply to about 31 in September 2023, 38 in July 2024 and now hover at 44, the highest the country has recorded in the last four years.

Similarly, Nigeria appears to be gaining from the Petroleum Industry Act as investment is gradually returning to upstream activities. Data from the regulator shows that in 2022, only 38 development wells were drilled and completed, attracting $1.98 billion in capital.

This figure more than doubled in 2023 with 76 wells completed, though investment fell slightly to $1.53 billion. A stronger surge followed in 2024, with 120 wells drilled and completed, the highest in the four years, alongside a record $2.71 billion in capital inflow.

So far in 2025, 72 wells have been projected with an investment of $1.96 billion. Within four years, the country had drilled $8.179 billion in crude and completed 246 wells.

Also, the country?s well re-entries and interventions, jumped from 92 operations in 2022 to 436 in 2023, a nearly fivefold increase. In tandem, capital expenditure soared from $84 million in 2022 to $788 million in 2023.

Although 2024 maintained relatively strong momentum with 383 re-entry projects and $682 million in investment.

So far in 2025, 271 interventions and $355 million in capital inflow have been seen in re-entry and intervention. This brings the investment to $1,87 billion. The sector recorded about $10.05 billion in the last four years in well development.

With per barrel cost of oil production staying above $40 with Nigeria being one of the costliest to drill crude, stakeholders said the country allowed oil theft to morph into a deep-rooted crisis with far-reaching economic consequences.

They noted that despite the PIA and growing investments in the sector, systemic sabotage of pipelines and crude oil infrastructure continues to undercut national revenue, investor confidence and operational efficiency.

Group Chairman and CEO of International Energy Services Limited, Dr Diran Fawibe, believes Nigeria?s failure to address oil theft when it first emerged has allowed the menace to become deeply entrenched.

He notes that what began as isolated incidents has now evolved into a full-scale economic sabotage, orchestrated by powerful and well-connected interests rather than petty criminals.

According to him, the resulting loss of crude oil estimated at over 353 million barrels over the past 26 years.

In response to persistent pipeline vandalism, many oil companies have turned to alternatives like barging and trucking to move crude to export terminals. While these measures help bypass broken or insecure pipelines, Fawibe warns that they introduce loopholes in monitoring, making it nearly impossible to determine accurate export volumes.

He stresses that this lack of transparency significantly undermines the country?s revenue integrity.

The government?s past handling of oil theft investigations, he argues, has been woefully inadequate.

He recalls the discovery of a secret siphoning pipeline years ago, which led to the formation of an investigative committee. However, the outcome was never made public, revealing what he calls ?a troubling degree of institutional laxity.?

Fawibe advocates a judicial commission of inquiry that would compel all stakeholders including oil producers, regulators and security agencies to testify under oath.

Without a robust and transparent mechanism for accountability, he warns, the problem will persist for years to come.

Former President of the Chartered Institute of Bankers of Nigeria (CIBN), Professor Segun Ajibola, also condemns the continued sabotage of critical oil infrastructure.

He points out that pipeline construction and maintenance require substantial investment, and it is deeply concerning that Nigeria is gradually abandoning this efficient transport system in favour of more cumbersome methods. Ajibola views the shift as an aberration caused by insecurity and systemic neglect.

He insists that the government must fortify its security architecture and ensure constant review of pipeline surveillance contracts. He further recommends stiff legal consequences for vandals and sustained development efforts in the Niger Delta to address some of the root causes of unrest.

With Nigeria?s heavy dependence on oil to fund its budget, Ajibola stresses that every barrel matters. ?Allowing crude to fall into the hands of vandals and illegal refiners,? he says, ?is simply not sustainable.?

For Prof. Adeola Adenikinju, President of the Nigerian Economic Society and a renowned energy economist, the broader implication of the ongoing sabotage is investor hesitation.

He explains that any condition that raises operational costs discourages investment, and alternative modes of crude transportation, though unnecessary, come at a price.

Pipelines, he maintains, remain the most cost-effective means of moving oil, and their continued underutilisation is a symptom of deeper governance failures.

Adenikinju is hopeful, however, that combining private and state-led security forces, alongside full implementation of the PIA, will reduce future incidents of vandalism.

He sees the rise in barging as a desperate response from private operators facing operational uncertainties.

An energy sector analyst Henry Adigun noted that in the face of chronic insecurity, operators will naturally gravitate towards methods that offer better certainty and reduce losses even if those methods are more expensive.

?Barging,? he says, ?is not the ideal option, but it?s currently more reliable than risking losses through sabotaged pipelines.?

Adigun adds that unless Nigeria takes concrete steps to secure its existing infrastructure or invest in an entirely new pipeline system, oil producers will continue making choices based on operational efficiency and risk mitigation rather than long-term national interest. (The Guardian)

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