Nigeria’s lost a total $467 million in July due to shut-in of production from leaking pipelines carrying crude oil from wells to flow stations in the Niger Delta, where more than 90 percent of the country’s crude are explored. The loss comes from 6.29 million barrels of crude oil that the Nigerian National Petroleum Corporation (NNPC) said in its August monthly report that it could not take to the market due to shut-in of pipelines in July.

Further analysis into previous monthly reports of NNPC showed inconsistency in the records of pipeline vandalism as there was no detailed records of pipeline vandalism in the month of January, February and March and the records given in the month of April, February and July given were not well explained. Petroleum and associated products are transported through extensive network of pipelines in Niger Delta.

These pipelines are usually susceptible to sabotage from militants who usually break the pipelines to illegally tap crude oil. But sources in the oil and gas industry also admit that most of the pipelines are old and hence easily susceptible to damage and leakages. The August monthly report of the NNPC show that in July alone pipelines leading to five leading terminals for crude exports suffered major leakages costing the country several millions of dollars in lost revenue. The $467 million (N168 bn at US$/N360) is more than the N128 billion transferred by the NNPC into the federation account in July.

Source: Business Day