Nigeria’s $300 Billion Oil Theft Scandal

Nigeria has lost $300 billion to oil theft, auditors appointed by the Nigerian parliament said this week. The oil was sold illegally both at home and abroad, the Senate committee tasked with investigating oil theft losses said, as cited by Nigerian media.

“The ad hoc committee should be given the mandate to track, trace, and recover all proceeds of stolen crude oil both locally and internationally, as forensic review by the consultant shows over $22 billion, $81 billion, and $200 billion remains unaccounted,” the chairmen of the committee, Senator Ned Nwoko, reported, as quoted by Premium Times.

The report presented to Nigeria’s Senate was interim, meaning the final tally of oil theft losses could end up being even higher. The committee also proposed that the government set up a special court to prosecute oil thieves and use state money to reduce pipeline sabotage.

Oil theft and pipeline vandalism related to it have plagued Nigeria for decades, in recent years, interfering with state plans to reverse a decline in production. The country’s oil output peaked around 2 million barrels daily back in 2016 and has been shrinking since then.

Pipeline vandalism and oil theft are two reasons for this, as they discourage additional investments that are much needed for a reversal in production trends. Another reason has been Big Oil’s strategy that has seen the supermajors curb their presence in Nigeria in favor of other locations with better prospects.

This year has seen some success in reversing the decline, after Nigeria’s parliament finally passed an energy industry law years in the making, which aims to improve predictability for foreign investors in Nigeria’s oil industry.

A tax incentive initiative by President Bola Tinubu that came into effect earlier this year is also expected to help Nigeria boost its oil production by encouraging cost savings and efficiency improvements.

By Irina Slav for Oilprice.com

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