The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, Dr Ogbonnaya Orji, has disclosed that the country lost $1.84bn worth of petroleum products from refineries in nine years.
Orji stated this on Monday at the opening ceremony of the 2024 NEITI board retreat/meeting in Lagos.
According to him, 4.2 billion litres of petroleum products were lost from the refineries as a result of oil theft between 2009 and 2018. This was estimated at 140,000 barrels per day.
Baffled by the increasing rate of oil theft, the NEITI boss said, “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 $46.16bn or N16.25tn. Similarly, between 2009 and 2018, the country also lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.”
He added that these losses and their attendant negative effects on the economy made the previous administration constitute a special panel on oil theft/losses to study the situation.
Orji hinted that NEITI did a report and made recommendations on the ways to stop oil theft in Nigeria, urging the current administration to look into the report and implement the recommendations.
He emphasised that the five-day retreat was an opportunity to discuss ideas on ways to deal with the current challenges of oil theft, illegal mining, pipeline and other governance challenges that have contributed to the loss of revenues and investment opportunities.
On energy transition, the executive secretary expressed worries that the nation’s economy is being threatened by the global shift from fossil fuels to renewable energy as the demand for oil declines.
Orji noted that the global transition from fossil fuels to renewable energy sources poses significant risks to countries that depend heavily on hydrocarbon-based natural resource revenues for survival.
“Our country, Nigeria is heavily dependent on oil revenues for survival. It is within the ambit of this board to support our government and citizens with timely policy decisions and strategies to deal with this unavoidable unfolding development in the extractive sector.
“The fear of the known risks in most of the affected countries far outweighs the potential unknown opportunities except we utilise the immense opportunities within the Extractive Industries Transparency Initiative, its global network and multi-stakeholder framework to search for solutions.
“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. The demand for our oil keeps going down daily,” he remarked.
He declared that 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 a far-reaching impact on the country’s economy.
Orji added, “While the transition from carbon-based fuel will have a 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.
“In 2021, crude oil and gas accounted for 46 per cent of energy use and 78 per cent of electricity generation in Nigeria. The transition would therefore require significant financial investment for the country to generate renewable energy to replace energy previously generated from carbon fuels. 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,” he explained.
Sanwo-Olu reacts
On his part, the Governor of Lagos State, Babajide Sanwo-Olu, said for Nigeria to fully harness its abundant natural resources, there is an urgent need to re-examine the existing laws that vest 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 Lagos State Commissioner for Energy, Biodun Ogunleye, stated, “The need for review of these laws has become very urgent if the Federal Government’s policy on Ease of Doing Business is to succeed especially at the sub-national levels. 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 resources. 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.”
Credit:Punch
