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Nigeria loses over N1 trillion to oil theft annually – IEA

The International Energy Agency has said that Nigeria is losing about $7bn annually to oil theft.

The agency, in its monthly report released on Tuesday, said “oil bunkering, or theft, costs the government an estimated $7bn in lost revenue per year.”

According to the report, theft and sabotage often lead to pipeline damage, causing oil firms to cut output.

The report also said flooding and large-scale theft of crude drove Nigerian oil output to the lowest level for more than two years in October.

The IEA said in its monthly report that oil production in the country fell to 1.95 million barrels per day in October, with production in recent months having ranged between two million and 2.5 million barrels per day.

The drop from September to October was around 110,000 bpd, it said, leaving Nigerian production at “the lowest level in around two and half years.”

“By early November, production levels were recovering, with export schedules showing increased volumes for December,” it said.

It was enough to keep the country as Africa’s top producer ahead of Angola at 1.79 million bpd, but the drop comes amid growing warnings that the country must take action to avoid stagnant output in the future.

Nigerian oil production sharply rebounded after a 2009 amnesty deal for militants in the Niger Delta region following years of unrest, which had cut output by around half for a period of time.

However, future output is in question over a number of factors, including a long-stalled overhaul of Nigeria’s oil industry that has created uncertainty among energy firms, freezing investment, as well as theft.

Beyond that, a boost in production in the United States — the IEA believes the US will become the world’s top oil producer by 2020 — is also expected to force Nigeria to hunt for new markets. The US has been a major buyer of Nigerian oil exports.

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