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NEITI: Nigeria Lost 619.7m Barrels of Oil Valued at N16.25tn to Theft in 12 Years
![NEITI: Nigeria Lost 619.7m Barrels of Oil Valued at N16.25tn to Theft in 12 Years](https://global.ariseplay.com/amg/www.thisdaylive.com/uploads/NEITI.jpg)
•Says country lost 4.2bn litres of products from refineries worth $1.84bn
•Warns about effect of energy transition, decline in global oil demand on Nigeria
Peter Uzoho
In reference to its past audit reports on the oil and gas sector in the country, the Nigerian Extractive Industries Transparency Initiative (NEITI), yesterday, reiterated that the country lost a whopping 619.7 million barrels of oil valued at N16.25 trillion to theft between 2009 and 2020.
The agency added that between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.
Executive Secretary of NEITI, Dr. Ogbonnaya Orji, made the assertions yesterday in Lagos, at the commencement of the 2024 NEITI Board Retreat.
Orji warned that the global push for transition to renewable energy and the prospect of a permanent oil demand decline would have significant effect on Nigeria’s fossil fuels-dependent economy.
He stated, “Figures contained in our 2009 to 2020 audits have put Nigeria’s losses to crude oil theft over a 12-year period at 619.7 million barrels valued at $46.16 billion or N16.25 trillion.
“Similarly, between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.”
Orji pointed out that the losses and their attendant negative effects on the economy led to the constitution of a Special Panel on Oil Theft/Losses, which had NEITI as a member, to study the situation against current realities and make recommendations on how to fight the menace.
The executive secretary stated that the global transition from fossil fuels to renewable energy sources posed significant risks to countries that depend heavily on hydrocarbon-based natural resource-revenues for survival.
According to him, Nigeria is heavily dependent on oil revenues for survival. He said it fell within the ambit of the current NEITI board to support the government and citizens with timely policy decisions and strategies to deal with the unavoidable unfolding development in the extractive sector.
He maintained that the fear of the known risks in most of the affected countries far outweighed the potential unknown opportunities, except Nigeria and others affected utilised the immense opportunities within the Extractive Industries Transparency Initiative (EITI), its global network and multi stakeholder’s framework, to search for solutions.
Orji said, “At current dependency levels, Nigeria already faces significant threats to its economy from the prospect of a permanent decline in global demand for crude oil.
“Given the fiscal problems Nigeria has experienced, from short-term disruptions in crude oil and gas output, the much longer-term and permanent decline in demand would have far-reaching impact on the country’s economy.
“While the transition from carbon-based fuel will have significant long-term impact on Nigeria’s revenue and exports, the transition would also have other impacts on the economy. A direct consequence of the transition would be the loss of fossil fuel as a source of energy.”
Orji said in 2021 crude oil and gas accounted for 46 per cent of energy use and 78 per cent of electricity generation in Nigeria.
He stated that the transition would require significant financial investment for the country to generate renewable energy to replace energy previously generated from carbon fuels.
According to him, “This financing (and technological) burden is in addition to the equally significant amount of money that is required to close Nigeria’s current energy supply gap.”
Orji urged the current administration to revisit the report of the 2009 special panel on oil losses and theft and come up with a white paper for the implementation of the recommendations contained in the report.
On the Retreat of the National Stakeholders Working Group (NSWG), which also serves as the Board of NEITI, he said the meeting was structured as an induction programme that would expose the board members to the mandates and operations of NEITI.
The retreat, he explained, was expected to chart a course for the current board by aligning the agency’s mission of fostering transparency and accountability in Nigeria’s extractive industries with the yearnings of the citizens for impacts within the country’s contextual reality and its international obligations.
Orji stated, “This retreat is an opportunity to reflect on the role of NEITI in shaping a new direction for the extractive industry. This requires robust discussions that will bring about ideas to deal with the current challenges of oil theft, illegal mining, stealing of Nigeria’s precious minerals, pipeline vandalism, damage to the environment and the eco system and other governance challenges that have contributed to loss of revenues and investment opportunities in the sector should be addressed.”
In his remarks, Chairman of NEITI board and Secretary to the Government of the Federation (SGF), Senator George Akume, said the appointment and inauguration of the board was another positive statement of President Bola Tinubu’s open support and commitment to transparency and accountability in the management of the country’s economic resources, and especially given the mandate and objectives of the Nigeria EITI.
Akume, who was represented at the occasion by the representative of the North-central zone on the NEITI board, Mr. Mathew Adoli, expressed the present administration’s passion and commitment to the global EITI, the work of NEITI, and the visible impacts which EITI process had achieved so far in Nigeria.
The SGF stated the extractive industry’s strategic importance to Nigeria’s economy, saying for the current administration’s economic agenda, the sector holds the future.
Akume said transparency and accountability in the management of the national resources were equally central to the anti-corruption agenda of the current government.
He stated, “Nigeria is, therefore, irrevocably committed to the implementation of EITI in the oil, gas, and mining industries.
“Our faith in the EITI process is not just because it is key to these two key government agendas, but also because over the years, NEITI has demonstrated a high degree of competence, integrity and commitment to the values that the country requires to achieve economic growth and development in the sector through availability of reliable information and data required for national planning and reforms.
“It has also supported phenomenal revenue growth in the sector through meticulous application of EITI principles. At this where our national and global focus are on energy security, efficiency and justice in energy financing, renewables and control of emissions, the work of NEITI is so important to our country and particularly this administration to help us define our country’s engagement strategy on the energy transition debate through consultations, constructive engagement driven by reliable information and data.”
He reminded members of the board that their responsibility was to shape and provide strategic policy direction and oversight that would support NEITI management and the secretariat to continue to implement its activities smoothly without any distractions or interference.
Akume said it was also important that the board supported NEITI to preserve its corporate values, remain focused and committed to its values of transparency and accountability for the benefit of all the participants at the retreat and for future generations.
On behalf of Tinubu, the SGF used the opportunity to renew the commitment of the Nigerian government to the EITI implementation under the provisions of the NEITI Act 2007, and international standards and best practices under the EITI principles and emerging issues.
Such issues, he said, included Beneficial Ownership Disclosure, Contract Transparency, data mainstreaming, energy transition, open data, strong independent civil society engagement, broadened company engagement and wider stakeholders’ collaboration and partnerships, among others.
Akume told the NEITI board members, “It is against this background that I wish to stress that by this appointment, enormous responsibilities have been placed on your shoulders. I have no doubt that considering the calibre of the membership of this board, you will deliver on this important mandate.
“I, therefore, urge you all to consider your appointment as an opportunity to give back to your country and contribute to the progress and development of our extractive sector.”
In his goodwill message, Lagos State Governor, Mr. Babajide Sanwo-Olu, stressed the urgent need to re-examine the existing laws that vested control over oil and other mineral resources in the federal government as well as the exploitation of mineral resources in the country.
Sanwo-Olu, who was represented by the state’s Commissioner for Energy and Mineral Resources, Mr. Biodun Ogunleye, said that must happen to enable Nigeria fully harness its abundant natural resource endowment.
He maintained that the need for review of those laws was urgent if the federal government’s policy on Ease of Doing Business was to succeed, especially at the sub-national levels.
The governor added, “The review is also important to promote investments in the extractive industry and diversify our nation’s economy.
“To this end, the federal government and its agencies need to engage more with the private sector and sub-national governments in the development of our natural resource.
“The areas of engagement include solid minerals development, host community programmes, environmental sustainability, energy efficiency, domestic resource mobilisation, and poverty reduction initiatives, which are at the centre of realising the impacts of the global extractive industries transparency initiative in resource-rich countries like Nigeria.”