Nigeria loses 362.28m barrels of crude to sabotage — NEITI

A new report by the Nigeria Extractive Industries Transparency Initiative has indicated that Nigeria lost 362.28 million barrels of crude oil due to measurement errors, sabotage, and production adjustments between 2014 and 2023.

This implies that the country lost about 992,547 barrels of crude oil daily due to the above-mentioned issues in 10 years.

NEITI disclosed this in its latest report titled, ‘Oil & Gas Industry Audit 2023: An independent report assessing and reconciling physical, process and financial flows within Nigeria’s oil & gas industry’.

The agency also noted that the total crude oil production deferment during the review period was 110.66 million barrels.
The report on crude oil losses was compiled by reviewing multiple sources, including the Nigerian Upstream Petroleum Regulatory Commission submissions during the NEITI audit period and the signed-off reports from companies, such as Nigerian National Petroleum Company Limited.

NEITI refers to deferment as a stoppage in production due to scheduled and unscheduled repairs and maintenance, pipeline breaks/leaks, or poor equipment performance.

Nigeria, an oil-producing country, has continued to struggle with fully leveraging its oil and gas potential, facing persistent management challenges.
This problem is worsened by the use of outdated and corroded pipelines for transporting crude oil.

A breakdown of the report showed that the nation has recorded a steady increase in crude losses, with the highest loss of 101.05 million recorded in 2026.

In 2014, a loss of one million was recorded, it increased by 2,612 per cent to 27.12 million in 2015.

The highest loss was recorded in 2016 with 101.6 million barrels, this would mean every day in the year, the country lost 278,356 barrels to theft and sabotage, and a potential revenue of $4.6bn was lost. Crude oil averaged $46.07 in 2016.

The losses recorded in 2017 were 36.46 million barrels of crude, meaning a daily average loss of 99,890 barrels. In 2017, crude oil averaged $54.32 per barrel, by implication, Nigeria lost $1.9bn to theft and sabotage.
In 2018, Nigeria recorded a loss of 53.28 million barrels of crude oil, representing a daily average loss of 145,972 barrels per day. At an average crude oil price of  $72.58 per barrel, it would mean that Nigeria lost $3.8bn.

The recorded loss is a drop from the 2019 figure put at 42.25 million barrels, averaging 115,753 barrels daily loss. This would mean a loss of $2.7bn with crude oil averaging $65.49 per barrel in 2019.
It however reduced to 39.08 million in 2020, 17.57 million in 2021, and 36.69 million in 2022.

For 2023, a total of 7.68 million barrels of crude oil was lost in the year 2023 at an average of 21,041 barrels per day loss.  This is, however, a significant drop of 79 per cent from the 36.69 million barrels lost in 2022.

The report read, “Crude oil loss was 7.68 million barrels which was 3.33 per cent of the total metered production at the flow station (7.675 million barrels) for the affected companies and crude type. The losses resulted from 2.910m million barrels measurement error (1.3 per cent), 5.252 million barrels theft and sabotage (2.3 per cent) and 486.746 thousand barrels production/terminal adjustment (0.21 per cent).

“Crude losses were 7.68 million barrels in 2023, compared to 36.69 million barrels in 2022. This dropped by 79 per cent (29.02 million barrels). This underscores the positive impact of government initiatives aimed at reducing crude oil losses, enhancing operational efficiency, and improving accountability within the sector.

“However, considering the proven crude oil reserves in the country, there is a need to ramp up production capacity to 2013 annual average of 800 million barrels through forensic audit of the wellheads and production platforms.”

Making recommendations to stop these losses, the agency urged the government to consider viable public-private partnership arrangements to deploy advanced digital solutions to monetize savings from crude losses.

It also recommended the creation of a database for aggregating cases of resource petroleum product losses that could disrupt the optimal availability of the products.
It said, “The Federal Government through the NUPRC should consider viable public-private partnerships arrangement on the deployment of an advanced digital solution for the monetization of savings from crude losses.

“Also set up a special fund and a standby committee on crude loss prevention and security of oil and gas assets for a more coordinated response and intervention. The NMDPRA and stakeholders should accelerate actions to deploy a database and platform for aggregating cases of resource petroleum product losses that could disrupt the optimal availability of products.”