The price of Brent crude, the global benchmark for crude, fell on Sunday as virtually all grades of oil saw prices fall on the first day of the week despite efforts by the Organization of the Petroleum Exporting Countries to stabilize the cost raw material.
As oil prices plunged, data obtained from OPEC’s September 2022 oil market report showed that one oil rig in Nigeria was idle in August 2022 compared to the number of functional rigs during the previous month.
Industry figures seen in Abuja on Sunday showed the price of Brent fell $4.31 or 4.76% to $86.15 a barrel as of 4:18 p.m. Nigerian time.
WTI crude lost $4.75 or 5.69% to close at $78.74/barrel, while the cost of oil grades in the OPEC basket edged down $0.24 or 0, 25% to close at $96.31/barrel.
Data from OPEC’s World Rig Count on operational rigs in Nigeria in August this year indicated that the number of operational rigs in the country fell from 11 in July to 10 in August.
The organization said that in 2019, the average number of functioning oil rigs in Nigeria was 16 but fell to 11 in 2020, before finally dropping to seven in 2021.
In the first and second quarters of 2022, the average number of operating oil rigs in Nigeria was eight and 10 respectively.
OPEC data indicated that the number of working rigs rose to 11 in July this year, but that was not sustained as it fell again to 10 the following August.
The main reason for the inactivity or shutdown of Nigerian oil rigs was the alarming rate of crude oil theft.
The federal government, oil unions, the military, among other stakeholders, have repeatedly expressed their concerns about this.
The Petroleum and Natural Gas Senior Staff Association of Nigeria, for example, recently said that some oil companies have had to shut down some of their oil wells following the persistent theft of crude oil.
PENGASSAN also said that the military should be made to explain how huge volumes of oil were stolen from the Niger Delta despite the protection of oil installations by their personnel.
The Independent Petroleum Marketers Association of Nigeria’s national public relations officer, Chief Ukadike Chinedu, told our correspondent that while there may be inconsistencies in the data on oil thefts, the volume of crude stolen in the country was huge.
He said: “Regarding the amount of oil stolen in Nigeria, the various figures you see are all estimates. There is no precise gauge to measure stolen crude oil volumes in this country, because we do not have a standard measurement system.
“But due to the recent incident of a vessel being intercepted for allegedly attempting to steal crude oil from Nigeria, we believe a measurable amount of our crude oil is going unaccounted for.”
He added, “I also know that Nigeria is losing a lot of revenue because of this oil theft and the stakeholders are not happy with the way the cartel involved is handling the matter.
“So it is relevant that the federal government produce a standard measuring instrument that will give the exact number of daily production, export consumption and the amount reserved, as well as what we channel for local use.”
PENGASSAN recently held protests in Abuja, Lagos, Kaduna, Warri, among others, to address the continued theft of crude oil in Nigeria.
Furthermore, the Executive Secretary, Nigeria Extractive Industries Transparency Initiatives, Ogbonnaya Orji, said in an interview that the 2021 Petroleum Sector Audit Report will be ready this year to determine the level of oil theft across the country.
“We want to establish how much crude is produced, how much can be accounted for and how much has been stolen,” he said.
Orji added, “We should establish how much was exported, set aside for local consumption and how it was set aside or managed.”