Nigeria lost N2.1 trillion to oil vandalism in 10 months – Baru

Forum 7 years ago

Nigeria lost N2.1 trillion to oil vandalism in 10 months – Baru

The Nigerian National Petroleum Corporation, NNPC, said from January 2016 till date, government lost $7bn, about N2.1tn, to the activities of militancy groups and oil pipeline vandals in the Niger Delta region.

The Group Managing Director of NNPC, Dr Maikanti Baru, said this on Friday in Abuja at the 2016 Fiscal Liquidity Assessment Committee Retreat.

Baru made a presentation on “Global Oil Prices, Militancy and Terrorism and its Impact on Government Revenue in Nigeria’’.


He said that apart from security challenges in the region, politics, judiciary, oil prices and production cost continued to impact negatively on the oil industry.

“Over 7000kpd of crude oil has been lost due to vandalism this year. A bulk of the loss is from JV assets.

“This implies that 60 per cent of oil production lost is NNPC-FGN equity.

“At an estimated price of 45 dollars per barrel, the total 2016 revenue loss to the Federation Account translates to about 7 billion dollars.


“This is money that the government could have used to achieve major infrastructural milestones.

“This loss is equivalent to a new 7,000mw power plant; new 350kpd refinery; over 30 per cent of National budget; and a new 1,700 kilometre pipeline.”

To resolve this, Baru said the NNPC planned to increase security of oil and gas assets, improve its community social responsibility and the Amnesty programme.

He said the NNPC planned “to renegotiate terms of Production Sharing Contract with deep offshore operating companies because with the current agreement, only 17.7 per cent of total revenue comes to government’’.

Meanwhile, The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said corruption in the oil and gas industry was overblown.