The Nigeria Extractive Industries Transparency Initiative, (NEITI), said Nigeria has recorded its highest crude oil loss in the last 18 years, with an average of 245 million barrels of oil going down the drain in 2016.
Statistics from the latest audition of NEITI revealed that the huge loss was due to several factors, including pipeline vandalism and reduced funding for various Joint Venture, JV, cash call obligations.
Oil depletion in aging fields and specific technical challenges also contributed to the crude oil losses. In 2016, crude oil produced was 659.13 million barrels, the only year production fell below the 700 million barrels mark since 1999.
The amount represented a 15.13 per cent drop from the 776.66 million barrels produced in 2015 and a 14.62 per cent drop from the 772 million barrels produced in 1999. It also means crude oil produced was a meagre 4.47 per cent of the 14.7 billion barrels realised between 1999 and 2016.
The amount was made up of production from all sources and various arrangements the Nigerian National Petroleum Corporation (NNPC) entered into. The production arrangements include JVs (between NNPC and 15 different oil companies, through production sharing contracts (PSCs), service contracts (SCs), sole risk operators (SROs), marginal field operators (MFOs).
According to the report, between March and December of 2016 alone, Nigeria suffered crude oil loss that averaged 130 million barrels. About six different force majeures were declared in the country in 2016, with Shell Petroleum Development Company (SPDC) accounting for three out of that number.
In February of that year, SPDC had to shut down the subsea 48-inch Trans-Forcados Pipeline in Warri, Delta State, after it was bombed by Niger Delta militants. The terminal remained shut for seven months, affecting several oil companies injecting into it. Nine companies including Seplat, Panocean, and Waltersmith had to shut down production for 147 days.