According to the Group Managing Director of the Nigerian National Petroleum Company (NNPC), Dr. Mele Kyari, Nigeria has lost over $1.5bn to oil theft since January 2022.
Kyari was speaking to the House of Representatives Committee on Petroleum Resources (Upstream) on Thursday. The committee was set up to investigate the crude oil production situation, vandalism, oil theft and the security measures needed to restore production and improve revenue.
He told the committee that Nigeria lost over $1.5 billion worth of crude oil to theft between January and March 2022, amounting to a loss of about 250,000 barrels per day. However, he assured that efforts are underway to ensure that the Economic and Financial Crimes Commission (EFCC) and Nigeria Financial Intelligence Unit (NFIU) track the movement of illicit funds accrued through oil theft to the international market.
According to Kyari, the country’s oil theft situation has hampered the development of the oil sector’s development.
“It is a difficult circumstance for the industry and that is why despite the good intention and the provisions of the PIA (Petroleum Industry Act), no one will produce oil and recover zero income and put the money back into the business. That is why investments are very weak despite the good physical environment that the PIA has brought,” he said.
“I have had the privilege to answer questions around investment climate in very many international platforms. And they will tell you: ‘If we bring our money how are you sure they will not steal the oil”.
“It is very difficult to give a straight answer. Of course, what we are doing now will contain it and will bring stability back with all the effort of all of us.”
He also asked the Government to set up a special court to deal with the menace of oil theft and vandalism. He said,
“I would recommend that we set up a special court for this so that such cases would be quickly dealt with. It is not just the small persons that you see at those locations that are prosecuted. We know that to sell crude oil on the international market it is not the business of the ordinary people that you see in these illegal refinery settings.”
“It is an elitist business and we must have the courage to set up a very independent special court to try cases related to these. Otherwise the impact today it has on our overall economic outlook, our ability to improve foreign exchange and also in terms of energy security for this country is threatened by very few people. Clearly, they are very few if you look at the scale of what is going on.”