NEITI’s audit findings reveal how crude theft, measurement errors and production adjustments complicate Nigeria’s efforts to reconcile oil volumes, establish losses and determine whether the country is receiving the revenue it is owed.
By Ese Ufuoma
Nigeria has spent years fighting crude theft, repairing pipelines and trying to raise production. Yet another problem sits at the heart of the industry: the difficulty of establishing exactly how much oil is produced, how much is lost, how much is exported and how much money ultimately reaches the public purse.
Nigeria has an oil problem that cannot be measured by the number of barrels stolen, the pipelines vandalised or the illegal refineries uncovered in the Niger Delta. It begins with a more fundamental question, one that should be straightforward in an industry built around measurement: how much oil is the country producing, and where does every barrel go?
The answer should be traceable from the wellhead to the export terminal, from the terminal to the buyer and from the sale to the revenue account. Every movement should leave a record. Every quantity should be measured. Every difference should have an explanation. Yet Nigeria’s oil industry has repeatedly struggled to reconcile figures relating to crude production, losses and adjustments, leaving regulators, auditors and the public to contend with numbers that do not always tell the same story.
The problem is not that every unexplained barrel has necessarily been stolen. It is that theft, measurement errors, production adjustments and operational losses can become entangled in the same accounting exercise, making it difficult to determine precisely what has happened and how much the country has lost.
A report by the Nigeria Extractive Industries Transparency Initiative (NEITI), published in September 2024, brought the scale of that problem into focus. Its 2023 Oil and Gas Industry Audit examined crude oil losses and production deferment, drawing on submissions from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), oil companies and Nigerian National Petroleum Company Limited (NNPC Ltd).
For 2023, the reconciled figures recorded approximately 7.68 million barrels in crude losses across the affected companies and crude streams. Of that volume, about 2.91 million barrels were attributed to measurement errors, approximately 5.25 million barrels to theft and sabotage, while a production adjustment of roughly 487,000 barrels reduced the net total. The categories must be read together because adjustments can increase or reduce the final figure.
The figures reveal why the country’s oil-accounting problem deserves attention beyond the familiar narrative of crude theft. More than one kind of failure can separate the volume recorded at one point in the production chain from the volume accounted for at another. Where the measurement is inaccurate, the difference may be wrongly attributed to theft. Where crude is stolen, poor measurement can make the true quantity difficult to establish. And where adjustments are not adequately explained, the public is left with a balance that is harder to verify.
For a country whose public finances are heavily exposed to oil earnings, these distinctions are not merely technical. They affect the credibility of production statistics, the assessment of royalties and other government entitlements, and the ability to determine whether companies and public institutions are accounting for the resources under their control.
The difficulty becomes clearer when the figures for different years are compared. NEITI’s audit recorded approximately 36.69 million barrels in crude losses for 2022, against 7.68 million barrels in 2023. The decline was substantial, but the figures also demonstrate why the methods used to measure and classify losses matter. The 2023 audit’s underlying submissions differed before the figures were reconciled and signed off by the regulator, companies and NNPC Ltd.
This is where the country’s accounting challenge becomes particularly uncomfortable. If institutions responsible for monitoring the same industry arrive at different initial estimates, the public needs to understand how those differences are resolved, which figures are adopted and why. Reconciliation is an essential part of auditing, but it should not be the end of the conversation. The reasons for material differences must also be clear enough for independent scrutiny.
The debate over the financial value of crude losses has demonstrated how easily the issue can become contentious. In September 2025, media reports put the value of losses attributed to theft and metering deficiencies between 2021 and July 2025 at N8.41 trillion. The NUPRC rejected that valuation, arguing that the calculation misrepresented its figures and applied an exchange rate of N1,500 to the dollar across a period when the official exchange rate was considerably lower. The commission also said daily losses had fallen from 102,900 barrels in 2021 to 9,600 barrels by September 2025.
The dispute offers a useful lesson: an alarming financial estimate is only as reliable as the volume data, pricing assumptions, exchange rates and methodology behind it. Equally, an official claim of improvement should be supported by transparent figures that allow the public to verify the progress being reported. Neither the headline value of a loss nor the announcement of a decline should substitute for a clear accounting of what happened.
Meanwhile, the physical problem of crude theft remains serious. Across parts of the Niger Delta, oil theft and illegal refining have damaged infrastructure, complicated production and contributed to environmental pollution. Crude can be diverted through unauthorised connections, removed from compromised pipelines or intercepted before reaching the facilities where volumes are officially measured. In such circumstances, enforcement operations are necessary, but seizures alone cannot establish the full scale of the problem. A country must also know what entered the production system, what left it and where the difference occurred.
Even when theft is not involved, the measurement process can be vulnerable to error. Oil volumes change with temperature and pressure, while water and sediment can affect the quantity of saleable crude recorded. Metering equipment must be properly calibrated, maintained and independently verified. Figures recorded at a production facility must also be reconciled with those recorded at receiving terminals and during export.
Beyond the technical questions lies a larger economic concern. Every barrel that is stolen represents a potential loss of value. Every barrel recorded incorrectly can distort production statistics or complicate the calculation of payments due to the government. Every unresolved difference makes it harder to establish whether the country has received what it is owed.
The consequences extend beyond the petroleum industry. Oil revenue supports public spending, while production figures influence national planning and expectations about export earnings. Where the underlying numbers are uncertain, government institutions, investors and the public have less reliable information on which to make decisions. The problem is therefore not only about oil that may have disappeared, but also about the quality of the information used to manage one of Nigeria’s most important economic assets.