BREAKING NEWS :Nigeria loses N13bn to oil theft, vandalism in one month

Nigeria has lost
N12.566 billion in one month due to petroleum products theft and
vandalisation of the facilities of the Nigerian National Petroleum
Corporation, NNPC.

Giving a breakdown of the losses, the NNPC, in its Monthly Financial and
 Operations Report for March 2016, disclosed that crude oil loss
amounted to N5.94 billion; petroleum products losses stood at N1.757
billion, while N4.87 billion was spent on pipeline repairs and
management cost.
Gas pipeline
Gas pipeline

According to the report, the losses negatively affected NNPC’s transfer
to the Federation Account from the domestic sale of crude oil and gas.
Specifically, the report noted that transfers to the Federation Account
by the NNPC dipped by N9.23 billion to N69.544 billion in March,
compared N76.614 billion recorded in the preceding month.

Domestic sale of crude oil

However, the report highlighted that NNPC’s total payment to the
Federation Account Allocation Committee, FAAC, in the month under review
 stood at N75.874 billion, due to the payment of N6.33 billion, which
was for the repayment of a N450 billion debt to the Federal Government.

The NNPC, the report added, earned N67.01 billion and N2.535 billion
from the domestic sale of crude oil and gas respectively, bringing the
total sales receipts in the month under review to N69.544 billion.

To this end, the NNPC stated that the sum of N1.118 trillion had been
paid to the Federation Account being domestic crude oil and gas and
other receipts from April 2015 to March 2016.

Also, the report noted that in the last one year, between April 2015 and
 March 2016, the NNPC had recorded crude oil losses of N15.456 billion;
petroleum products losses of N42.93 billion, while N95.118 billion had
been expended on pipeline repairs and management.

In addition, the NNPC expended N249.329 billion on subsidy in the last
one year, from April 2015 to March 2016, while it earned N918.8 billion
from crude oil sales within the period under review.

The report further disclosed that incessant vandalism and products theft
 had continued to destroy value, putting the NNPC at disadvantaged
competitive position.

It argued that a reduction in vandalism will indeed unlock several
industry upsides which include improved upstream oil production due to
reduced pipeline disruptions, improved refinery utilization due to
increased crude oil feed from restored pipelines, and reduction of
crude/product losses.

According to the report, a total of 3,153 vandalized points were
recorded between April 2015 and March 2016, adding, that crude and
products losses had continued to cost NNPC and the country huge amount
of money.

In particular, the report stated that the 48-inch Forcados Oil Terminal
(FOT) Export line was vandalized in February 2016, which crippled the
Nigerian Petroleum Development Company, NPDC and all Joint Venture, JV,
partners’ ability to export crude oil from the terminal.

It noted that this situation led to the declaration of force majeure by
Shell Petroleum Development Company, SPDC, occasioned by production
shut-in of about 300,000 barrels of oil per day.

However, the report stated that the, “NNPC leadership is already
addressing the Corporation’s key business and operational challenges as
well as currently undergoing a comprehensive restructuring exercise
aimed at repositioning it for efficiency, profitability and value
creation for the common good of the Corporation and its stakeholders.

“NNPC restructuring is also on-going. The program intends to restructure
 the Corporation into value adding autonomous entities in congruency
with the overall corporate vision.”