Nigeria is not left out in the effect of the global recession hitting countries across the world. However, the peculiarity of Nigeria’s situation is the apparent absence of concrete policies, measures and political will to salvage the situation. For an economy that is heavily dependent on crude oil, the depletion of Nigeria’s daily oil production rate by 28.4 million barrels between January and July 2022 severely threatens the projected revenue of N9.3 trillion in the 2022 national budget. The country had attained a production rate of 1.399 million barrels per day (mbd) in January 2022, but this plunged in subsequent months. The Federal Government attributed the falling production rate to the high cost of petrol subsidy, pipeline vandalism and crude oil theft. In a period where oil producing States are benefitting from global high oil prices, the Nigerian government is reporting crude theft.
On 8th August, the Nigerian Navy was reported to have investigated the activities of a water vessel, MT Heroic Idun, owned by Hunters Tankers AS domiciled in Norway, which was sighted in Akpo oil field in Rivers State and suspected to have entered the field without authorisation and with the intent to illegally lift crude oil. The captain was said to have been uncooperative and fled from the area. The vessel was eventually apprehended by the authorities in Equatorial Guinea, working with the Nigerian Navy. According to the Nigerian Navy, the vessel had not commenced lifting oil from the field before it was apprehended.
At an investigative hearing on the petrol subsidy regime from 2017 to 2021, organised by the House of Representatives Committee on Fuel Subsidy in July 2022, the Nigerian Navy stated that it has handed over 70 out of 147 vessels arrested for oil bunkering and crude oil theft to the Economic and Financial Crimes Commission (EFCC). Meanwhile, on 12th August, the Nigeria National Petroleum Company (NNPC) Limited launched a Crude Theft Monitoring app, where members of host (oil) communities and other Nigerians can report incidents of crude oil theft in exchange for a reward. At the launch, the Chief Executive Officer of the NNPC, Mele Kyari revealed that the company was partnering with security agencies and relevant stakeholders to tackle oil theft, with one of the proposed measures to achieve this being the creation of a platform where investors and traders can validate the source of the crude oil they receive from Nigeria, to avoid patronising dealers of stolen crude. Kyari had in April 2022, stated that Nigeria lost $4 billion to oil theft at the rate of 200,000 barrels per day in 2021, and the sum of $1.5 billion in 2022 due to pipeline vandalism.
Despite these measures, observers are not confident in the ability of the Nigerian government to effectively plug these huge leakages. The moribund state of refineries, the activities of illegal refineries and crude oil theft have plagued Nigeria’s oil sector for so long. However, it seems that the effects are biting now more than ever, at a time when a significant portion of the country’s revenue is going into debt servicing and petrol subsidy, with no solution in the horizon.