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27.03.2024 Explainer From 1.7m Barrels to 1.4m, How Nigeria’s Daily Crude Oil Production Declined in 6 Years

Published 27th Mar, 2024

By Olayide Soaga

Nigeria’s crude oil production has been declining since 2018. This is bad business for a nation whose economy is mostly dependent on crude oil, and oil theft is to blame.

Nigeria, one of Africa’s major oil-producing states, has been battling oil theft for decades. ‘Oil theft’ is the term used to describe actions taken, such as illegal extraction, illegal refining, and pipeline vandalism, with the intention of removing crude oil from facilities that store it.

According to Nuhu Ribadu, the National Security Adviser (NSA), Nigeria loses 400,000 barrels of oil daily to this menace. Ribadu added that Nigeria is capable of producing two million barrels of oil daily but produces less due to oil theft.

Data from the Organisation of Petroleum Exporting Countries (OPEC) shows that the number of crude oil barrels Nigeria produces daily has been on the decline since 2018.

In 2018 and 2019, Nigeria produced over 1.7 million barrels of crude oil daily (mbpd), and about 1.5 mbpd in 2020. In 2021, the figures dropped to about 1.3 mbpd, and in 2022, the figures declined to about 1.2 mbpd.

OPEC crude oil production in Nigeria based on secondary sources, 2018–2022 (tb/d)
OPEC crude oil production in Nigeria based on direct communication, 2018–2022

FIJ found conflicting reports about Nigeria’s crude oil production for January 2024. Secondary sources cited by OPEC’s Monthly Oil Report released in February 2024 claimed Nigeria’s crude production dropped from about 1.42 mbpd in December 2023 to about 1.41 mbpd in January 2024, while data obtained through direct communication claimed oil production rose from 1.33 mbpd in December 2023 to 1.42 mbpd in January 2024.

However, none of these figures meet the benchmark production target of 1.78 mbpd set by the federal government in the 2024 budget, and this proves that Nigeria is producing below its capacity.

Although other factors contribute to this, crude oil theft appears to be the most significant.

619 INCIDENCES OF CRUDE OIL THEFT IN 4 MONTHS

FIJ found there have been no less than 619 incidences of crude oil theft since December 2023. According to the Nigerian National Petroleum Company Limited (NNPCL), 157 cases of crude oil theft were recorded in the Niger Delta region between December 23, 2023, and December 29, 2023. The company said that among these were 32 illegal connections to pipelines, 52 cases of illegal refineries and 25 cases of pipeline vandalism.

The NNPCL also said that 112 cases of oil theft were recorded between December 30, 2023, and January 5, 2024. These cases were recorded in the Niger Delta.

Between January 13, 2024, and January 19, 2024, the NNPCL said, 214 cases of crude oil theft were recorded. According to the company, there were 136 cases of oil theft between March 16, 2024, and March 22, 2024, and 37 instances of unauthorised connections, 26 occurrences of pipeline tampering, 29 illegal refineries and other oil theft-related activities.

NIGERIA IS LOSING TRILLIONS YEARLY TO OIL THEFT

Crude oil theft costs the country a huge chunk of money. Every year, Nigeria loses trillions of naira to it.

The Nigerian Extractive Industries Transparency Initiative (NEITI) revealed that the country lost 619.7 million barrels of crude oil valued at N16.25 trillion ($46.16 billion) to crude oil theft between 2009 and 2020.

In addition to these figures, according to the Nigerian Senate, the upper chamber of the country’s bicameral legislature, Nigeria lost N2.3 trillion to crude oil theft in 2023.

Nigeria is caught in a fix trying to curb oil theft. The country loses trillions to it, despite spending N48 billion per year to a security firm owned by Government Ekpemupolo (Tompolo), an ex-Niger Delta militant.

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Published 27th Mar, 2024

By Olayide Soaga

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