The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Ogbonnaya Orji has stated that Nigeria will need an estimated $20 billion annually to bridge the widening gas and pressing need for substantial investments to grow its gas infrastructure.
Dr. Orji, made this significant announcement on Monday, during the Nigeria International Pipeline and Security Conference held in Abuja.
The conference, organized by the Pipeline Professionals Association of Nigeria (PPAN) and Energy and Corporate Africa, revolved around the theme of “Bolstering Security, Protecting Petroleum Industry Assets for Improved Economy.”
Dr. Orji emphasized that oil theft and losses in Nigeria have reached a critical level, constituting a national emergency that poses a severe threat to oil exploration and exploitation.
These issues have far-reaching negative consequences on economic growth, business prospects, and the profit earnings of oil companies.
Quoting data from NEITI’s 2021 Oil and Gas Industry Report, he revealed that the oil sector accounted for a substantial 72.26% of Nigeria’s total exports and government’s foreign exchange, 40.55% of government revenue, and provided employment for 19,171 individuals.
Despite these significant contributions, Dr. Orji highlighted that Nigeria is yet to fully harness the benefits of its oil and gas resources due to rampant oil theft and losses attributed to pipeline vandalism, pipeline integrity compromises, outright sabotage, and insecurity in the region.
He underscored that many of these criminal activities take place within a context of community complicity and a code of silence.
Moreover, Dr. Orji pointed out the indirect involvement of certain industry members in facilitating oil theft, citing illegal connections and pipeline clamping as examples that require specific skills and knowledge.
He urged the relevant associations to implement stringent regulations and sanctions to curb the involvement of their members.
The magnitude of the problem became evident when Dr. Orji reiterated that a staggering 619.7 million barrels of crude, valued at $46.16 billion or N16.25 trillion, were stolen between 2009 and 2020.
Additionally, Nigeria incurred losses of 4.2 billion liters of petroleum products from refineries, amounting to $1.84 billion over a decade.
To underscore the gravity of the situation, Dr. Orji pointed out that the total value of crude losses between 2009 and 2020 surpassed the size of Nigeria’s foreign reserves and exceeded the country’s oil savings in the Excess Crude Account (ECA) by nearly tenfold.
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Furthermore, Nigeria recorded 7,143 incidents of pipeline breakages and deliberate vandalism between 2017 and 2021, resulting in crude theft and product losses of 208.639 million barrels valued at $12.74 million or N4.325 trillion. During this period, the country spent N471.493 billion on pipeline repair and maintenance.
Dr. Orji stressed that curbing oil theft and pipeline vandalism is essential for rebuilding investors’ confidence and re-establishing trust in the industry.
He argued that the economy cannot flourish in an environment plagued by oil theft, pipeline vandalism, and insecurity in oil-producing communities.
Nigeria’s abundant gas reserves, standing at 200 trillion cubic feet and ranking as the largest in Africa and the 9th largest in the world, offer a promising avenue for economic growth.
Dr. Orji recommended the urgent formulation of a revised national policy on gas utilization, with clear delineation of roles for the industry, government, and investors. Such a policy should highlight market-driven opportunities to translate gas plans into sustainable economic development.
To achieve this vision, Dr. Orji estimated that an annual investment of $20 billion is required to bridge Nigeria’s gas pipeline and infrastructure gap.
The significance of the conference was acknowledged by the Speaker of the House of Representatives, Mr. Tajudeen Abbas, who pledged ongoing efforts by the National Assembly to establish a sound legal framework for the oil and gas sector.
He highlighted the enactment of the Petroleum Industry Act (PIA), providing essential clarity for the industry.
Mr. Abbas also noted the establishment of a special committee within the National Assembly dedicated to addressing oil theft, underscoring the sector’s vital role in the country’s revenue.
He called for collaboration and the stringent punishment of individuals involved in oil theft and vandalism as a deterrent to potential criminals.
Dr. Emeka Okwuosa, the Chief Executive of Oilserv, emphasized the need to distinguish common criminals who engage in oil theft from those advocating for improved conditions in the Niger Delta.
He elaborated on the complex nature of pipeline construction, the challenges of monitoring existing pipelines due to outdated technology, and the deployment of modern technologies in addressing these issues.
The event also saw the presence of Mr. Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and other prominent figures from the energy sector, underlining the importance of addressing these critical challenges in Nigeria’s oil and gas industry.
