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NNPC’s estimated crude oil theft loss is 700,000 bpd -Wunti

The Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, said the real loss caused by crude oil theft in Nigeria is 700,000 barrels per day.

Wunti disclosed this earlier today during an interview on Arise TV’s the Morning Show.

According to him, the 700,000 barrels per day loss, as per NNPC calculations, translates to 21 million barrels per month.

More details: Explaining further, Wunti highlighted the three types of losses as follows:

  • Engineering losses which nobody accounts for as it is a part of the engineering process
  • Actual losses where hydrocarbons are produced but get stolen
  • Opportunity losses arise because operators are unable to produce what was initially planned.

Arriving figures: He acknowledged there are varying figures on Nigeria’s crude oil theft losses and then explained how the NNPC arrived at its figure.

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  • According to him, Nigeria’s budget is anchored on 1.88 million barrels per day of crude oil production. In August, Nigeria’s reported production output was 1 million barrels. Therefore, the difference is what the country is losing which is 700,000 barrels per day.
  • Note that the discrepancies in oil losses could be due to opportunity losses. This is why speculative figures are quoted as losses associated with crude oil theft.

Security vulnerabilities: Wunti spoke about how the security vulnerabilities in the Niger Delta have impacted crude oil production. He said:

  • “As I speak to you, Brass and Bonny are on force majeure, that is about 300,000 barrels deferred already. We have been working hard with the private security contractor to return the Trans-Niger pipeline. Hopefully, we will open Bonny very soon. One of our major trunklines – the Nembe Creek trunkline cannot be used because of security vulnerabilities, although Trans Forcados, Escravos, and Trans-Remo are back. Now, the previous security architecture was not working, so, we carried out a robust diagnosis, which revealed major issues to be addressed.”

Addressing the issues: According to Wunti, the issues are that Nigeria has a difficult geological terrain. So, it is impossible to have end-to-end visibility, particularly in the maritime economic zone. 

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He further explained that what is seen in the blue water is not connected to the brown water and the backwater.

So, there is a varied desegregated visibility. Also, Wunti talked about the lack of coordination among the sector players – regulators, security agencies, communities, and private security outfits. 

However, he said that the new security architecture is anchored on rectangular architecture, reliant on a command-and-control centre technology that brings together the security and intelligence agencies, the regulators, and the community.

  • “Today, we have end-to-end visibility. We can detect, deter and respond. We are still making a lot of improvements in our response. In responding, we detect, deactivate, destroy and remove, which is a complex process. 
  • Sometimes, we have to destroy a whole vessel. Removing these vessels is a big job. And we are recording significant success because of the improved security situation. We are now almost an average of 350,000 to 400,000 barrels increase.”

For the record: Bala Wunti earlier disclosed that Nigeria’s oil production as of December 6 is 1.59 million barrels per day. He stated this on Tuesday, December 6, at the ongoing 11th Practical Nigerian Content forum in Uyo, Akwa-Ibom state.

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