By Ken Afor
Nigeria’s crude oil production declined for the second consecutive month in March 2024 to 1.231 million barrels per day, according to the Organization of the Petroleum Exporting Countries (OPEC) latest Monthly Oil Market Report for April 2024.
This represents a drop from the production level in February 2024, continuing the downward trend that began at the start of this year.
According to the report, Nigeria’s crude oil production stood at 1.322 million barrels per day in February, but decreased to 1.231 million barrels per day in March, marking a decline of 91,000 barrels per day.
In addition, the report noted that the country’s crude oil production was 1.427 million barrels per day in January, but this level was not maintained in February, and the downward trend persisted into March.
Contrary to previous data, OPEC reported that Nigeria’s average crude oil production in the first quarter of 2024 increased to 1.327 million barrels per day, surpassing the 1.313 million barrels per day average production in the fourth quarter of 2023.
Furthermore, Nigeria’s first quarter oil output in 2024 exceeded the 1.201 million barrels per day average production in the third quarter of the previous year.
Nigeria’s oil production has been significantly affected by oil theft and pipeline vandalism, causing a reduction in output that falls below the volume approved for the country by OPEC.
Reports monitored by TheNewDiplomat indicated that the Nigerian National Petroleum Company Limited (NNPCL) on Wednesday documented 155 incidents of oil theft in just one week, further exacerbating the challenges faced by the industry.
During the review period, the company’s report unveiled that in the Niger Delta oil-rich region, 53 illegal pipeline connections and 36 illegal refineries were discovered, shedding light on the extent of illicit activities plaguing the area.
“Between March 30 and April 5, 2024, a total of 155 incidents were recorded across several locations in the Niger Delta region from various incident sources,” the firm stated.
In a comprehensive overview of the incidents, NNPCL reported a total of 53 illegal connections, 36 illegal refineries, and the discovery of 32 wooden fibre boats. Additionally, they identified 14 cases of pipeline vandalism, eight vessel infractions, and four oil spills. Furthermore, the company made seven vehicle and one vessel arrests.
The sources of these incidents varied and included entities such as the Nigeria Agip Oil Company, Tantita Security Services Ltd, NNPCL Command and Control Centre, Shell Petroleum Development Company, and NNPCL 18 Operating Ltd, among others.
Providing additional details, the company said, “In the past week, 32 wooden boats conveying stolen crude and illegally refined products were seized and confiscated in Rivers and Delta states.
“On land, seven vehicles loaded with stolen crude were arrested in Imo, Delta and Rivers states. 53 illegal connections were uncovered between March 30 and April 5, 2024 in Bayelsa, Rivers and Delta states.
“14 cases of vandalism were also recorded in Rivers, Bayelsa and Delta states, while illegal storage sites where stolen crude and illegally refined products are kept were uncovered in Akwa Ibom, Bayelsa, Rivers and Delta states.”
The national oil company also highlighted the presence of clusters of illegal refineries in Abia State, where the activities of oil thieves have caused significant environmental damage. It reported the discovery of 36 clusters of illegal refineries in the past week across various locations in Rivers and Abia states, underscoring the widespread nature of the issue.
“Four cases of oil spills due to activities of vandals were recorded in the past week,” NNPCL stated, adding that in Rivers State, oil leaks from a wellhead is destroying aquatic lives.
NNPCL emphasized that 38 suspects were apprehended during the reviewed week, reaffirming the company’s commitment to combatting crude oil theft until it is completely eradicated.
The detrimental impact of crude oil theft on Nigeria’s economy has been substantial, resulting in the loss of trillions of naira. This situation has prompted some international oil companies to shift their focus from onshore to deep offshore oil fields or to exit the country altogether.
For instance, in November 2023, the Federal Government disclosed that over N4.3 trillion worth of crude oil was stolen in 7,143 pipeline vandalism cases over a five-year period, according to online reports.
This revelation was made at the Nigeria International Pipeline Technology and Security Conference in Abuja, themed ‘Bolstering Regulations, Technology, and Security for Growth,’ organized by the Pipeline Professionals Association of Nigeria.
During a presentation at the conference by the Nigeria Extractive Industries Transparency Initiative (NEITI), a Federal Government agency, it was revealed that oil theft and losses in Nigeria had reached a critical level, constituting a national emergency.
NEITI’s Executive Secretary, Ogbonnaya Orji, underscored that oil theft presented a grave threat to oil exploration and exploitation, carrying significant negative implications for economic growth, business prospects, and profit earnings for oil companies.
Citing data from the agency’s reports, Orji stated, “NEITI disclosed that in the last five years, from 2017 to 2021, Nigeria experienced 7,143 cases of pipeline breakages and deliberate vandalism, resulting in crude theft and product losses totaling 208.639 million barrels, valued at $12.74 million or N4.325 trillion.”
“NEITI reports also disclosed that during the same period Nigeria spent N471.493bn to either repair or maintain pipelines.”
