“Systemic irregularities” and $300 billion lost, Nigeria’s oil sector faces a terrible problem

Led by a senator in the West African country’s southern region, Ned Nwoko, a committee was set up earlier this year to look into some of the oil sector’s most prominent challenges, including oil theft, bunkering operations, illegal export networks, and alleged compromises within regulatory and security systems.

What was eventually discovered and disclosed by the head of the Ad Hoc Committee were “systemic irregularities, poor measurement standards, and weak enforcement” across the petroleum value chain.

As a result, the report issued several recommendations to ensure that Nigeria is able to retain the absurd sums it loses annually in its most lucrative sector.

“We are proposing to go straight to the recommendations as the full report is voluminous,” said Ned Nwoko.

“The committee, after extensive assessment, recommends that the Nigerian Upstream Petroleum Regulatory Commission should strictly enforce internationally accepted crude oil measurement standards at all production sites and export terminals,” he added.

As seen in the Punch, the report also recommended that the Government ensure that there are security services with unmanned aerial vehicles and other contemporary surveillance technologies to keep an eye on export routes and pipelines.

Additionally, it advised the creation of a Maritime Trust Fund to improve interagency intelligence operations, infrastructure, and maritime security.

Senator Abdul Ningi, a senator from the Northern region of the country, lauded the findings in the report and gave his suggestions, noting that the house should focus on the “direct recovery of stolen funds exceeds the powers of the legislature.”

“We can track and trace, but recovery is beyond the powers of the Senate. The committee should specify losses, locations, and report back for referral to agencies such as the EFCC or ICPC,” he said.

Oil theft has long plagued Nigeria’s economy.

The country’s petroleum sector, which was once the backbone of government revenue and foreign exchange gains, is now repeatedly disrupted by pipeline tapping, illegal refineries, and multinational theft syndicates.

The outcome is immeasurable income loss, poorer output, broad environmental damage, weakened energy security, and human tragedy, all of which limit economic growth and increase fiscal risk.

Accurate assessment of stolen petroleum is challenging since criminal activity is hidden and data sources are diverse.

However, several recent reports show that the magnitude remains large.

Satellite and agency tracking revealed that at least 589 oil leaks occurred in Nigeria in 2024, most of which were caused by theft and sabotage, indicating the extent of illegal tapping and refining across the Niger Delta.

As reported last year, the Nigeria Extractive Industries Transparency Initiative revealed that Nigeria lost 619.7 million barrels of oil valued at $46.16 billion over 12 years.

Additionally, the country lost $1.84 billion worth of petroleum products from its refineries over nine years.

Recent crackdowns by the Nigerian Army’s 6th Division shed light on the scale of the problem, as international gangs are reported to be a huge part of the issue.

Over 32,000 gallons of stolen petroleum supplies were recovered, and 69 persons were detained in a single operation.