The federal government may have lost over N3.8 trillion to shortfall in oil production in 2016 due to militants’ attacks and oil theft in the Niger Delta.
This was disclosed by the minister of petroleum, Dr Ibe Kachikwu in Lagos on Wednesday, May 17, at the Rainoil 20th anniversary lecture.
According to the minister, Nigeria lost about 700,000 barrels daily throughout last year, for which at the oil price of $50 per barrel, the country would have lost $35 million (N10.6 billion) daily, amounting to N3.8 trillion.
Kachikwu was represented at the event by the chief operating officer, downstream, Nigerian National Petroleum Corporation, (NNPC), Henry Ikem-Obih.
He spoke on the topic: “The Nigerian Oil and Gas Industry, Opportunities, Challenges and Prospects of the Downstream Sector.”
With regard to refined petroleum products, he noted that due to the rising cost of Premium Motor Spirit (PMS), also known as petrol, a number of oil marketers stopped importing the commodity, leaving the NNPC as the major importer of majority of the products.
His words: “The environment has since changed. When we did all these, pricing for crude was $25 to $30 per barrel; today, it is in excess of $54, which is fantastic because it means that our revenue stream is improving.’’
He also said that products theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position, as a total of 2,620 vandalised points were recorded between January 2016 and January 2017.
Also speaking, the former executive secretary, Petroleum Products Pricing Regulatory Agency (PPRA), Reginald Stanley, urged the federal government to concentrate on making and implementing favourable policies for the downstream sector.
He said there is a need for the federal government to ensure its oil and gas policies bring lasting peace in the Niger Delta to enable the country sustain production, while also allowing the private sector to drive the downstream industry.