Nigeria’s oil and gas sector has recorded its lowest crude oil losses in 16 years, following sweeping reforms implemented by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
A 28-year analysis of crude oil losses shows a dramatic turnaround, with theft-related losses plummeting to just 11,100 barrels per day (kbpd), representing a steep drop from the 2021 peak of 102,900 barrels that were lost daily.
The sharp decline in oil theft is credited to a combination of kinetic and non-kinetic strategies deployed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), targeting what experts describe as one of the biggest drivers of debt and poverty in Africa’s most populous nation.
A backstory of Nigeria’s oil theft before the birth of the Petroleum Industry Act, 2021 showed that from 1999 to 2001, the country was free from pipeline infrastructure sabotage and other forms of activities that are classified as oil theft.
However, crude oil theft began to creep in 2002 and the activity came with significant consequences for the nation’s economy and security. Based on industry data released by the NPRC, crude oil theft rose to a daily loss of 11,800 barrels and a cumulative loss of 4.3 million barrels of crude by the end of December 2002.
By 2023, oil theft, which is called “bunkering” in the Niger Delta region, had grown into a multi-million dollar empire and the losses rose year-on-year to 64.9kbpd and a staggering 23.7 million barrels by the end of 2023.
The activities became worse, rising to a daily loss of 69,200 barrels and 25.3 million barrels between January and December 2004.
Based on U.S. Energy Information Administration (EIA) oil price stood at an average of $42.6 per barrel, meaning that Nigeria lost $1.1bn to oil thieves in 2004 alone.
In 2005, oil theft losses dropped to 55.6kbpd and 20.3 million barrels annual loss, while the figure declined further to 19.7kbpd with an annual loss of 7.2 million barrels by 2006 ending.
Fast forward to 2009, oil losses due to theft dropped to 8.5kbpd and 3.1 million barrels in the whole of 2009, which the government described as a relief.
But the drop was due to late President Umaru Musa Yar’Adua Niger Delta Amnesty Program (NDAP), which is Nigeria’s version of Disarmament, Demobilization and Reintegration (DDR).
Despite the effort, crude oil theft losses returned to 17.8kbpd and 6.5 million barrels annual loss in 2010. In 2012, it hit 70.7kbpd and 25.9m barrels were lost in that year alone.
At an average price of $94.6 per barrel sold in 2012, the country lost $2.4bn in that year alone. The condition became worse during Covid-19 shutdown in 2020, where the daily volume of crude oil stolen in the country hit 71.2kbpd and a total of 26.1m by year-end.
Based on NUPRC data, the peak of oil theft was in 2021 when the country was losing 102.9kbpd, which resulted in an annual loss of 37.6m barrels in 2021.
Experts believe that oil losses under the Petroleum Act of 1969 exposed the weakness of the law, which was widely seen as outdated and weak in addressing issues around host communities and other pressing issues leading to theft and vandalism.
The gamechanger came when President Muhammadu Buhari, on 16 August 2021, signed the Petroleum Industry Bill (PIB), 2021, effectively giving birth to the NUPRC with Engr. Gbenga Komolafe appointed as the Commission Chief Executive (CCE) to reform the upstream sector.
Komolafe-led NUPRC, in line with the PIA adopted both kinetic and non-kinetic approaches to tackling crude oil theft, a move aimed at curbing the multi-billion-dollar losses suffered by the government.
“Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira, and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development,” senator Ned Nwoko, an expert and Chairman Senate Ad hoc Committee on Crude Oil Theft said.
One of NUPRC’s kinetic approaches to tackling oil theft was collaborating with the joint task force comprising the NUPRC, NNPCL, the military, and local communities to combat oil theft.
The commission’s approach led to arrests of vandals and destruction of illegal refining sites and equipment to deter further theft and illegal activities.
NUPRC further deployed technologies like the Automatic Identification System (AIS) and the National Production Monitoring System (NPMS) to track vessels and monitor production and export activities.
For the non-kinetic approach, the regulator embarked on community engagement, involving host communities in monitoring and reporting activities, as well as providing alternative livelihoods to reduce participation in illegal activities.
This is in line with Chapter 3 of the PIA, which focuses on Host Community Development, the NUPRC has pursued an aggressive implementation of the provisions, a move believed to make host communities protect oil assets.
For instance, the commission has overseen the incorporation of 146 Host Communities Development Trust (HCDTs) at the Corporate Affairs Commission (CAC), while 21 are under processing.
The commission facilitated the remittances of N97bn and $149m into the HCDTs fund account as of May 19, these funds are from the 3 per cent set aside by operators from the Operating Expenses (OPEX) in line with the PIA.
In December 2024, Host Communities Producing Oil, Gas and Pipeline Impacted States Youth Council of Nigeria, HOSTCOMYCN, commended the NUPRC boss, Engr Komolafe, “for his laudable transformation policies and reforms used to restructure, reorganize and sanitize the nation’s oil sector, by strategically repositioning the upstream sector, and for working closely with the host communities to ensure they inaugurate the Host Community Development Trust, HCDT, across the oil producing states and communities.
“We also applaud Engr Komolafe for his unwavering commitment and dedication to accountability, transparency and efficient utilization of the natural resources for the cardinal objectives of NUPRC, thereby, ensuring effective productivity and service delivery for the betterment of our nation, and for proper implementation of disbursement of the three per cent as contained in the Petroleum Industry Act, PIA, that goes directly to the host communities, and of which he has been able to disburse over N200 billion to the HCDT, for infrastructure and socio-economic development in the host communities.”
The Komolafe-led NUPRC further initiated the Metering Audit & Advance Cargo Declaration (ADC). The ACD system requires operators to submit accurate cargo details in advance of shipments, improving tracking of exports.
The system also aims to minimise underreporting and prevent illegal exports, reducing revenue leakages. The NUPRC also implemented systems like the Barging and Trucking portals to monitor and track crude oil movements, ensuring transparency in approvals and operations.
These reduced oil theft losses from 102.9kbpd or 37.6m barrels in 2021 to a loss of 57.2kbpd and 20.9 million barrels by the end of the year.
The losses further declined to 11.9kbpd in 2023, leading to a reduced loss of 4.3m barrels in the full year of 2023. The numbers crashed further to 11.3kbpd and a loss of 4.1m barrels lost in the whole year.
“The oil theft has significantly reduced to due to the ongoing Kinetic and non-kinetic intervention by the Government. The oil theft which averaged about 12kbpd in the last 24
months further reduced to 5 kbpd in the last quarter,” the CCE said in February 2025 during a Presentation at Renewed Hope Global Town Hall Conference.
According to the official data, crude oil theft loss has declined further to 11.3kbpd as of the first quarter of 2025, resulting to a 16 year low and the second lowest in the past 24 years.
At the recently concluded 2025 NOG Energy Week Conference & Exhibition, the CCE disclosed, “Protection of assets is also paramount. With 37 new evacuation routes approved and working closely with security agencies, we are curbing theft and boosting accountability.”
SOURCE: thewhistler.ng
