Attacks on major crude oil arteries responsible for revenue shortfall, says NNPC

The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr Andrew Yakubu, has said that the menace has impacted negatively on the nation's economy.

Yakubu in a submission to the Senate and House of Representatives Joint Committee on the Medium Term Expenditure Framework (MTEF) for the period of 2014 to 2016 on Tuesday said that the situation costs Nigeria over 150,000 barrels per day.

He said, 'The critical and most important point to note here is that when the artery conveying crude oil to the terminals is hit, this reduces our production volume by 150,000 barrels per day and for the period that the line is down and that accounts for the drop in crude oil production. From February to date, we have witnessed so many breaches and each time we go down about 150,000bpd goes down'.

The NNPC boss  said the oil and gas sector was a key component of MTEF and any impact on it would have a negative effect on revenue flow to the federation account.

He lamented that the continuous crude oil theft, pipeline vandalism and shut-in had constrained the sector from meeting its revenue projection.

'We have looked at the 2014 oil projection from a realistic point of view and we would continue to recalibrate it with the National Assembly and other relevant stakeholders to ensure that the petroleum sector continued to play a key role in the national economy,' he added.

According to him, there is no doubt that the menace of crude oil theft and pipeline vandalism have received the highest intervention from the President, Dr. Goodluck Ebele Jonathan, which resulted in the institution of a committee by the National Economic Council, NEC, comprising some governors, NNPC, Department of Petroleum Resources, DPR, International Oil Companies, IOCs, Security Agencies and other relevant bodies to work out modalities to mitigate the menace.

On the daily crude oil production figure, the NNPC GMD said it has been  very erratic as a result of the several attacks on the arteries from February to date, adding that the daily crude oil production figure ranged between 2.2mpbd to 2.3mbpd.

He said that the NNPC actively participated with the Budget Office in arriving at the MTEF, adding that the Corporation would do everything possible to ensure that MTEF was achieved in terms of accruals from oil and gas projected input.

Corroborating the GMD, the Director-General, Budget Office, Dr Bright Okogu, affirmed that the activities of crude oil theft and pipeline vandalism coupled with the discovery of shale oil and gas was responsible for the inability of the NNPC to realise the projected 2.5mbpd crude oil production in 2013.

In his opening remarks, the Chairman of the National Assembly Joint Committee on MTEF, Senator Ahmed Makarfi said the rationale behind the interface with all revenue generating agencies was to x-ray the workability of MTEF.