Editor's Picks Energy Featured Gas Oil Petrochemicals

Over $56bn lost to oil theft, subsidy – Presidency panel

Over $56bn lost to oil theft, subsidy – Presidency panel

Nigeria lost $46.16bn to crude oil theft between 2009 and 2020, while it lost $10.7bn annually to subsidy on Premium Motor Spirit, popularly called petrol, the Energy and Natural Resources subcommittees of the Advisory Council of President Bola Tinubu, has revealed.

A summation of the amounts lost to oil theft and subsidy indicated that the country lost a total of $56.86bn, going by figures released in the Policy Advisory Council Report, dated May 2023, which was prepared when Tinubu was still President-elect.

On highlights of economic and sector challenges in the report, the council also stated that $70bn worth of investments was lost in the petroleum industry since 2011 due to the absence of the Petroleum Industry Act.

The PIA was signed into law by former President Muhammadu Buhari, after dragging for decades as a bill at the National Assembly.

The report further pointed out that at seven per cent, Nigeria’s revenue to Gross Domestic Product ratio was among the five lowest in the world.

It read in part, “Insecurity is a major sector challenge. $46.16bn was lost to crude oil theft between 2009 and 2020. $10.70bn lost annually to PMS subsidy and inefficiencies associated with the purchase, distribution, and sale of PMS.

“Governance and regulatory concerns have eroded investor confidence, diverting private capital needed for the development of critical oil and gas infrastructure.

“Cumulatively, these have reduced the energy sector contribution to economic growth and deprived citizens of the necessary infrastructure and social amenities required for improving living standards.”

The council outlined some targets to be pursued by the President between 0 to 100 days, adding that there was a need to unify exchange rate window, reorganise the Nigeria Upstream Petroleum Regulatory Commission/Nigeria Midstream and Downstream Petroleum Regulatory Authority.

It said the reorganisation of the agencies would be to deliver set milestone goals, adding that there was a need to headhunt/place capable resources in critical positions.

“Head-hunt competent, tested, reform-focused leaders in NNPCL (Nigerian National Petroleum Company Limited), ensuring its function as commercial entity per PIA (Petroleum Industry Act); paying taxes, royalties and profit to Federation Account and properly regulated by NUPRC/NMDPRA/NCDMB.

“Deregulate PMS pricing and implement Federal Direct Cash Transfer Programme. Signal determination to end insecurity in oil producing states (Imo, Delta, Ondo, Rivers, Bayelsa, Akwa-Ibom) by engaging key political and community stakeholders

“Reform the operations of the military task force with clearly defined KPIs (Key Performance Indicators) and consequent management to tackle deficiencies. Improve financing, agree on cash call arrears and debt repayment framework. Transition to market prices for gas,” the report stated.

On some of the things to execute within 18 to 24 month, the council advised the President to “mandate the NNPCL and NUPRC/NMDPRA to close out outstanding divestments and contract issues for project delivery clarity.

“Strip NNPCL of policy making roles and keep NCDMB within its Act mandate. Consider integrating NUPRC, NMDPRA, and NCDMB into a single regulator or include all midstream activities into NUPRC scope.”

The council called for the expansion of domestic gas reserves and the promotion of the development of a diversified oil and gas industry by implementing reforms in the PIA including “network code.”

It advised the President to develop a sustainable financing model, and to facilitate a third-party gas pricing framework for export market.

The council recommended that the President should enact fiscal enablers for natural gas and deepwater via the Finance Act, and expand stabilisation in the PIA to cover full credit for post FID (final investment decision) levies and taxes.

NMDPRA alerts military

Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority has called the attention of the Chief of Defence Staff to what it described as economic sabotage, criminal damage and theft through illegal petroleum lifting operations at Bonny River Terminal in Rivers State.

It raised the alarm in a letter sighted by journalists in Abuja on Sunday, stating that the theft of Butane was being done by the vessel Barumk Gas in connivance with an international oil company operating in NIgeria.

The letter, with reference number: NMDPRA/OACE/EXC.14/2023/05, dated June 8, 2023, was addressed to the Chief of Defence Staff Defence, Headquarters, Federal Ministry of Defence, Abuja.

It was titled “Economic sabotage, criminal damage and theft through illegal petroleum lifting operations at Bonny River Terminal,” stating that the international oil firm involved in the illicit act was ExxonMobil.

But the IOC denied being involved in any illegal operation at the terminal, stressing that its activities at the Bonny River Terminal were within the confines of the law

The NMDPRA letter read in part, “The urgent attention of the Chief of Defence Staff is drawn to the illegal petroleum lifting operations taking place at Bonny River Terminal.”

“The vessel Barumk Gas is lifting Butane at Bonny River Terminal without the authorisation or participation of the Nigerian Midstream and Downstream Petroleum Regulatory Authority which is the agency of government statutorily responsible for regulating operations at the terminal.

“This unlawful action is being facilitated with the active connivance of ExxonMobil, who have illegally destroyed the locks on the sea-line valve, whose keys are in the custody of the authority.

“The actions of ExxonMobil and Barumk Gas constitute economic sabotage, criminal damage and theft of Nigeria’s national resources. You are by this letter kindly requested to urgently prevent the sailing out of Barumk Gas until investigations into the matter are concluded.” The letter was signed by the Chief Executive of the authority, Forouk Ahmed.


Related posts

Buhari woos UAE investors


National security: How Abuja, Lagos, PH, CCTV project was stalled

Our Reporter

Naira gains marginally against dollar at parallel market

By Shile GIWA

Don’t rejoice yet over $2.8b AKK Gas pipeline project’

Our Reporter

Hunger has become normal in Nigeria, others –AfDB president

Our Reporter

N-Power beneficiaries appeal to FG for timely payment of stipends