Crude theft, vandalization: Over N12bn was lost in one month—NNPC

By Odunewu Segun

Due to the incessant attacks on oil facilities in the Niger Delta as well as the theft of petroleum products, Nigeria is said to have lost N12.566 billion in the month of March, 2016 alone, says Nigerian National Petroleum Corporation’s monthly financial and operations report.

According to the report, crude oil loss amounted to N5.94 billion, petroleum products losses stood at N1.757 billion, while N4.87 billion was spent on pipeline repairs and management cost.

The report disclosed that incessant vandalism and products theft had continued to destroy value, putting the NNPC at a disadvantaged competitive position. It argued that a reduction in vandalism will indeed unlock several industry upsides which includes improved upstream oil production due to reduced pipeline disruptions, improved refinery utlilization due to increased crude oil feed from restored pipelines.

According to the report, a total of 3,153 vandalised points were recorded between April 2015 and March 2016, adding that crude oil products losses had continued to cost the NNPC and the country huge amount of money.

It stated that 48-inch Forcados Oil Terminal (FOT) Export line was vandalized in February 2016, which crippled the Nigeria Petroleum Development Company and all Joint Venture partners’ ability to export crude oil from the terminal. It noted that the situation has led to the declaration of force majeure by Shell Petroleum Development Company, occasioned by production shut-in of about 300,000 barrels of oil per day.

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The report also noted transfers to the Federation Account by the NNPC dipped by N9.23 billion to N69.544 billion in March, compared to N76.614 billion recorded in February. It said NNPC’s total payment to the Federation Account Allocation Committee, FAAC, in March, 2016 stood at N75.874 billion, due to the payment of N6.33 billion, which was for the repayment of a N450 billion debt to the Federal Government.

It stated that the NNPC earned N67.01 billion and N2.535 billion from the domestic sale of crude oil and gas respectively, bringing the total sales receipts in March to N69.544 billion.

Also, the report noted that in the last one year, between 2015 and March 2016, the NNPC had recorded crude losses of N15.456 billion; petroleum products losses of N42.93 billion, while N95.118 billion had been expended on pipeline repairs and management.