ABUJA — In a startling revelation that underscores the scale of economic sabotage plaguing Nigeria’s oil sector, the Senate has disclosed that a staggering $303 billion in crude oil proceeds remains unaccounted for over the years, lost to theft and illicit transactions both domestically and abroad.
This disclosure came on Wednesday as the Senate received the interim report from its ad hoc committee investigating crude oil theft and related sabotage in the Niger Delta. The report, presented by Senator Ned Nwoko (APC, Delta North), Chairman of the Senate Ad-hoc Committee on Crude Oil Theft, detailed findings from a forensic review conducted by independent consultants. According to the analysis, Nigeria has suffered losses of approximately $22 billion, $81 billion, and $200 billion in separate instances of crude oil theft, painting a grim picture of systemic exploitation and regulatory failure.
The committee’s report calls for sweeping reforms, including the strict enforcement of internationally recognized crude oil measurement standards at all production sites and export terminals. It recommends that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) be equipped with modern measuring technologies or that the responsibility be reassigned to the Weights and Measures Department under the Federal Ministry of Industry, Trade and Investment.
To combat the entrenched theft networks, the committee urged the Federal Government to deploy advanced surveillance tools such as Unmanned Aerial Vehicles (UAVs) and integrity pipeline monitoring systems. It also proposed the establishment of a Maritime Trust Fund to bolster maritime infrastructure, safety, and economic development.
Further recommendations include the creation of a special court to expedite the prosecution of crude oil thieves and their accomplices, and the immediate implementation of the Host Communities Development Trust Fund (HCDTF) under the Petroleum Industry Act (PIA) to mitigate sabotage. Additionally, the report advises that all abandoned and decommissioned wells be transferred to the NUPRC and subsequently allocated to modular refineries to enhance local crude availability.
The forensic review also exposed significant fraud during the Direct Sale Direct Purchase (DSDP) program managed by the Nigerian National Petroleum Company Limited (NNPCL) between 2017 and 2021. The consultants highlighted irregularities in the handling of Tax Oil, Royalty Oil, and Profit Oil, further deepening concerns about accountability and transparency in Nigeria’s oil trade.
The Report
On Consultants Forensic Review and Analysis of Data and other, the report read, “A critical review and analysis of existing local database, reports and other documents by the Committee Consultant, revealed that during the period of Direct Sale Direct Purchase (DSDP) programme by the NNPCL, significant amount of fraud was perpetrated, especially as it relates to conversion or use of Tax Oil, Royalty Oil and Profit Oil. Below are figures from proceeds of crude oil based on DSDP between 2017 and 2021:
“In 2017, the crude oil taken as Domestic crude oil under the DSDP by fifteen (15) oil Marketing companies was 71,883,502 Barrels valued at US$3,954,168,484. Out of this, over 27% valued at US$1,093,487,742 was diverted/stolen;
” In the same year, the crude oil accruable to the Federation as Tax oil was 22,152,550 Barrels and valued at US$1,232,759,592. Out of this, over US$844,030,130, representing 68% was diverted/stolen:
“In 2019, the crude oil taken as Domestic crude under the DSDP arrangement, to provide petroleum products in Nigeria by sixteen (16) oil Marketing companies was 104,475,434 Barrels valued at US$ 6,782,719,831. Out of this, over 44.7%, valued at US$3,033,989,010 was diverted/stolen:
“In the same 2019, out of the Federation’s Tax oil of 38,873,132 Barrels valued at US$2,518,625,232 lifted by 13 oil marketers, over US$ 1,007,450,093 representing 40% was diverted/stolen:
” Between January and May 2022, a total of 57 vessels out of 125 vessels were involved in the DSDP programme and were used to divert crude oil of 4,305,589 MT and valued at US$4,497,021,332;
“Between February and June 2022, Tax oil valued at US$696,318,153 was stolen/diverted to accounts other than the Federation Account; in 2018, 2020 & 2021, over US$5Billion of Tax oil was diverted and an estimated Domestic crude diversion of over US$6. Billion was also reported:
“The above are components of crude oil sale differentials, mismatches and unaccounted funds of about $22billion (Twenty-two billion US dollars) through the domestic crude proceeds records and tax oil proceeds records combined.
“Also, a discovery of over 10 (ten) foreign Joint Venture (JV) crude oil proceeds accounts in naira and US dollars in the Nigerio and overseas were made.
“Additionally, the Consultants conducted a thorough screening exercise of over 16 (sixteen) companies from the Niger Delta Region to ascertain verifiable and actionable intelligence reports based on human intelligence (HUMINT) on local crude oil theft activities, their actors and the revenue leakages that can be curbed to the benefit of the Federal Government.
“Further interaction with the shortlisted companies revealed additional conduits of revenue generation for the Federal Government by curbing significant leakages perpetrated due to the technical limitations of the existing Government surveillance platforms, the lack of integration and synergy of the systems and the proliferation of surveillance systems.
“Furthermore, various human factors were demonstrated to be responsible for revenue leakages, through reporting, monitoring and evaluation gaps.
“Specifically, the evacuation and recovery of seized, arrested and forfeited crude oil, sludge and petroleum products onshore, offshore and within marginal oil fields have been identified as principal avenues for minimising the losses of crude oil proceeds to the Federal Government. Due to the gaps in the prosecution process for offenders and the specific mandates of the relevant Government Agencies in the sector, opportunities have been identified for an authorised Federal Government service provider and
“Consultant to undertake the evacuation and recovery of the illegal crude oil and petroleum products, sell through approved Government channels and Agencies and remit the proceeds to the Federal Government in a transparent and accountable manner. The Consultant shall work in collaboration with the Joint Task Force, Nigerian Navy, the Armed Forces, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Economic and Financial Crimes Commission (EFCC) etc.
“This proposition presents an innovative mechanism for addressing crude oil theft in the short term and more importantly, provide additional revenue streams to the Federal Government which have hitherto been lost to the incessant crude oil theft activities in the Region.
“Analysis of a document by Hon EJ Agbonayinma, a consultant to the Committee revealed a total shortfall of $81billion (Eighty-one billion US dollars) between expected receipts of crude proceeds declared by the NNPC and DPR in 2016-2017 and receipts declared by the CBN respectively.
“Also, based on interim investigations of crude oil sales from 2015 to date and other investigations by international consultants in the United Kingdom and Canada, the Committee projects the discovery of over $200billion (Two hundred billion US dollars) of unaccounted crude oil sales proceeds which require further investigation and recovery.”
In its findings, the Committee said, “the Committee after critical analysis of submissions made by stakeholders, observed and found as follows: That the use of unverified measuring instruments, absence of metrological control and verification of measuring instruments at production sites, ineffective interagency collaboration, uncoordinated regulatory enforcement mechanism and lack of knowledge of global best practice or requirements from some industry players and agencies are major factors enabling crude oil theft;
“the suspension of the Weights and Measures Department’s activities in the upstream sector in the Petroleum Industry Act (PIA) 2021, undermine the checks and balances necessary for accurate measurement and accountability:
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“the lack of special court to promptly prosecute crude oil thieves and the non-implementation of the Host Communities Development Trust Fund (HCDTF) under the Petroleum Industry Act (PIA) are enablers to crude oil theft:
“interim investigative local data shows crude oil sale differentials, mismatches and unaccounted funds of about $22billion (Twenty-two billion US dollars) through the domestic crude proceeds records and tax oil proceeds records;
“there exists a total shortfall of $81billion (Eighty-one billion US dollars) between expected receipts of crude proceeds declared by the NNPC and DPR in 2016-2017 and receipts declared by the CBN respectively:
” investigations of crude oil sales from 2015 to date and other investigations by international consultants in the United Kingdom, United States of America, Canada etc from the Committee consultants submissions, the Committee projects a discovery of over $200billion (Two hundred billion US dollars) of unaccounted crude oil sales proceeds:
“there is need for both local and international tracking, tracing and recovery of these proceeds of stolen crude oil for the benefit of the country: there are so many abandoned and poorly decommissioned oil wells in the Niger Delta region causing oil and gas leakages and polluting the ecosystem and communities; and recent reports revealed a remarkable improvement in Nigeria’s crude production and security environment. Crude production which fell by 11% between 2021 and 2022 (from 556.13 million barrels to 490.95 million barrels), rebounded by 9.5% in 2023 to 537.57 million barrels which implies reduced cases of Crude theft.”
Contributions were later received from Senators following one of the recommendations of the Committee that “The Ad-hoc Committee should be given the mandate to track, trace and recover all proceeds of stolen crude oil transactions, both locally and internationally as forensic review by the Consultants shows over $22billion, (Twenty-two billion US dollars), $81 billion (Eighty-one
billion US dollars) and $200billion (Two hundred billion US dollars).”
In his contribution, Senator Abdul Ningi, PDP, Bauchi central, said that the committee can trace and document losses, but does not have the mandate to recover stolen funds.
On his part, Senator Olamilekan Adeola, APC, Ogun west, said thaf the consultant must provide specific names of companies and individuals involved.
In his remarks, the Deputy President of the Senate, Senator Barau Jibrin, APC, Kano North said that the National Assembly does not have constitutional authority to recover funds and can only forward findings to the executive.
On his part, Senator Ibrahim Dankwambo, PDP, Gombe anorth, said that the final report must identify the actors involved and the specific wells, rigs, and locations where losses occurred.
Also contributing, Senator Enyinnaya Abaribe, APGA, Abia South, said that the document should be received as an interim report pending further work.
On his part, Senator Lola Ashiru, APC, Kwara south, said the estimated losses amount to “almost 10 years of Nigeria’s budget” and urged the committee to continue its work.
In his remarks, the President of the Senate, Senator Godswill Akpabio who commended the Committee, said the that the Senate will consider recommendations after the final report is submitted, just as he instructed the committee to continue its investigation and present a comprehensive final report.