Oil Companies Decry Impact of Theft and Vandalism on Crude Supply

By Abass Ganiyu
Dangote Refinery

Lagos, Nigeria — Major oil companies are raising concerns over the adverse effects of crude oil theft and pipeline vandalism on their ability to supply sufficient crude to local refineries. Dr. Chinyere Almona, Director-General of the Lagos State Chamber of Commerce and Industry, highlighted these challenges, which have significantly impacted the oil majors’ capacity to meet daily production quotas and supply modular refineries.

Nigeria's crude oil production has declined from 1,426,574 barrels per day in January to 1,281,478 barrels in April 2024, according to the Nigerian Upstream Petroleum Regulatory Commission. This shortfall affects the Dangote Petroleum Refinery, which has a refining capacity of 650,000 barrels per day, and 25 modular refineries, which collectively can process about 200,000 barrels daily.

Oil theft and vandalism have led to substantial losses, with Speaker of the House of Representatives Abbas Tajudeen noting an annual loss of N1.29 trillion due to these issues. The President of Dangote Group, Aliko Dangote, has also criticized international oil companies (IOCs) for prioritizing crude exports over supplying local refineries.

Almona emphasized the need for government intervention to mitigate these challenges, suggesting policy adjustments and improved security measures to support local crude supply. She also called for government support through the Nigerian National Petroleum Company Limited (NNPC) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure consistent crude supply to the Dangote Refinery and other local facilities.

Despite the challenges, the government and industry stakeholders continue to seek solutions to enhance Nigeria's crude oil production and ensure the stability of the local refining sector.

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