Attacks on oil facilities by Niger Delta militants and activities of oil pipeline vandals cost Nigeria $7billion (about N2.1trillion) from January 2016 till date, the Nigerian National Petroleum Corporation (NNPC) has said.
NNPC Group Managing Director, Dr Maikanti Baru, stated this on Friday in Abuja, in his presentation on “Global Oil Prices, Militancy and Terrorism and its Impact on Government Revenue in Nigeria,’’ which he made at the 2016 Fiscal Liquidity Assessment Committee Retreat.
According to him, “Over 7000kpd of crude oil has been lost due to vandalism this year. A bulk of the loss is from JV assets. This implies that 60 per cent of oil production lost is NNPC-FGN equity.
“At an estimated price of 45 dollars per barrel, the total 2016 revenue loss to the Federation Account translates to about 7 billion dollars. This is money that the government could have used to achieve major infrastructural milestones.
“This loss is equivalent to a new 7,000mw power plant; new 350kpd refinery; over 30 per cent of National budget; and a new 1,700 kilometre pipeline,” he said.
He said that the NNPC has planned to increase security of oil and gas assets, improve its community social responsibility and the Amnesty programme, in order to curtail the ugly development.
He said, “NNPC plans to renegotiate terms of Production Sharing Contract with deep offshore operating companies because with the current agreement, only 17.7 per cent of total revenue comes to government’’.
Baru added that aside security challenges in the oil region, politics, judiciary, oil prices and production cost have continued to impact adversely on the oil industry.
sources: Ripples Nigeria.