Nigeria’s Minister of Petroleum, Mrs. Diezani Alison-Madueke, has stated that the country lost N1.29 trillion to theft of crude oil on industrial scale and production shutdowns last year, even as she put the average crude oil theft and deferment in 2013 at 215,000 barrels per day.
The losses, according to her, were based on the average daily volumes of 215,000 barrels valued at $21.5m at $100 per barrel or $7.8bn, which was lost as a result of system leakages and deferred production.
With the present exchange rate of N165 per dollar, this translates into N1.293trn.
The minister’s statement lends credence to the data contained in a recent report by Shell Petroleum Development Company of Nigeria, SPDC, stating that “crude oil theft, sabotage and illegal refining are the main source of pollution in the Niger Delta”.
The report continues: “In 2013, the Nigerian government estimated crude oil theft and associated deferred production stood at over 300,000 barrels of oil per day (bpd).
“Intentional third-party interference with pipelines and other infrastructure was responsible for around 75 per cent of all oil spill incidents, and 92 per cent of all oil volume spilled from facilities operated by the Shell Petroleum Development Company (SPDC) over the last five years (2009-2013)”, the report stated.
The report indicated that on the average, around 32,000 bpd were stolen from SPDC pipelines and other facilities, while the joint venture lost production of around 174,000 bpd due to shutdowns related to theft and other thirdparty interference.
Nonetheless, Alison-Madueke said that efforts were being made to secure pipeline infrastructure, which, according to her, must be considered national assets and adequately protected.
The minister also stressed that the government would strengthen accountability in the upstream activities.
Her words: “In our bid to increase transparency, we have concluded a pilot scheme for real time crude oil production monitoring and hydrocarbon accounting process”.
She, however, pointed out that the nation made progress in gas development during the period despite the challenges that threatened operations in the industry.
“As part of our strategy to reduce gas flare, gas supply to the domestic market grew to an all-time high of 1,500 million cubic feet per day, of which about 70 per cent was deployed to the power sector and the balance in support of the manufacturing sector, such as cement. This ultimately reduced our average gas flare to less than 12 per cent”, she stated.
The minister added that as a continuous process of building local capacity, the IDSL data processing facility, currently the largest processing centre in West Africa, had been upgraded into a world class standard.
Alison-Madueke said that notwithstanding the current security challenge in Borno State, the government successfully completed 250 km2 phase V 3D seismic acquisitions in Chad Basin and immediately started the 200 km2 phase V1 programme and that the government had also acquired aeromagnetic data that covers the entire frontier basins.
According to her, the nation needed to maximise domestic gas utilisation, encourage energy industrial parks/ hubs, supply and dominate regional energy market, participate in joint domestic area commission for hydrocarbon exploration, attract investment and develop its local refining capacity as a deliberate energy and economic security policy to achieve self-sufficiency in petroleum products needs.
For the Chairman, Society of Petroleum Engineers, Mr. Benard Oboarekpe, Nigeria would continue to lead in the energy development of the continent.
According to him: “In the journey to grow, the continent’s production capacity and capabilities are the imperatives of maximising value from oil and gas resources evolving from exporter of natural resources to exporter of products”.
The event had the Lagos State Governor Babatunde Fashola in attendance, who noted that for decades, the nation had relied on oil and gas not just for revenue, but for its local energy needs.
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