Nigeria lost 619m barrels of crude worth $46b to theft in 11 years – Report

Nigeria lost about 619.7 million barrels of crude oil valued at $46.16 billion to theft between 2009 and 2020, a new report by the Fair Finance Nigeria (FFNG) coalition has revealed.

The report, titled “Community Voices on Oil, Finance, and the Petroleum Industry Act (PIA): A Case Study of Akwa Ibom and Bayelsa States”, launched in Abuja, revealed how weak regulation, systemic corruption, and alleged complicity of some security agencies and oil companies have enabled crude theft on an industrial scale.

The report said the development is depriving the country of vital revenue and worsening poverty in oil-producing communities.

The coalition comprises BudgIT, Civil Society Legislative Advocacy Centre (CISLAC), Connected Development (CODE), Oxfam in Nigeria, Policy Alert, and Steps to Sustainable Transformation, Empowerment Foundation (STEPS), and is supported by the Swedish international development agency, Sida.

Despite oil and gas accounting for 89.23 per cent of Nigeria’s exports in the third quarter of 2023, the report revealed that benefits are not trickling down to host communities.

It noted that while the Nigerian National Petroleum Company Limited (NNPCL) secured over $10.3 billion in syndicated loans from local and international financiers between 2020 and 2023, most oil-producing communities in Akwa Ibom and Bayelsa states still face severe environmental degradation, economic exclusion, and poor governance.

The study also found that despite a legal requirement under the Petroleum Industry Act (PIA) 2021 for oil companies to contribute annually to the Host Communities Development Trusts (HCDTs), estimated between $500 million and $800 million, only $21.753 million was remitted between 2022 and 2023.

This shortfall, according to the coalition, has crippled development projects and worsened living conditions in the Niger Delta.

Speaking, the executive director of CISLAC, Auwal Rafsanjani, called on the Federal Government to urgently address the menace of crude oil theft and ensure that revenues from the petroleum sector are transparently and effectively utilised for national development.

He identified complicity among oil companies, security agencies, government officials, and some community leaders as a major driver of persistent oil theft, which he described as a lucrative criminal business.

“If we are still treating oil theft with the lackadaisical attitude that it is being treated, definitely you will not see an end to the oil theft. At the end of the day, it is the generality of the communities that suffer,” he said.

He added that host communities, despite their proximity to oil facilities, continue to live with exclusion, poverty, and environmental devastation.

“Communities believe there’s a direct link between crude oil theft and the complicity of some companies and security agencies, which undermines national revenue and exacerbates local grievances.

“This is an urgent call to action for government, oil companies, financial institutions, and civil society to prioritise transparency, accountability, and collaboration to secure a just and sustainable future for oil-producing regions,” he stated.

In his presentation, Director of Programmes at Connected Development, Agu Kingsley, emphasised the role of financial institutions in preventing “greenwashing” by ensuring strict adherence to Environmental, Social, and Governance (ESG) standards when financing oil and gas projects.

Kingsley disclosed that between 2020 and 2023, NNPCL received $8.6 billion in financing, enabling it to declare $1.7 billion profit in 2023.

He added that over 50 per cent of the 18 banks financing Nigeria’s oil sector claim to be signatories to global ESG principles, yet compliance remains weak.

“Stronger regulatory frameworks and accountability measures are essential to strike a balance between project finance, environmental justice, and the development needs of host communities,” Kingsley said.(Guardian)