Senate’s discovery of unaccounted N300b crude oil proceeds raises dust

The recent discovery by the Senate’s ad-hoc committee investigating crude oil theft in the Niger Delta that about N300 billion crude oil proceeds were unaccounted for has been generating reactions from Nigerians.

The committee’s interim report to the Senate detailed massive discrepancies, weak oversight mechanisms and systemic lapses that have enabled large-scale diversion of Nigeria’s crude oil revenue.

A forensic review of domestic crude proceeds and tax oil proceeds records, according to the report, revealed crude oil sale’s differentials, mismatches and unaccounted funds, amounting to about $22 billion. It further found a shortfall of $81 billion between receipts declared by the Nigerian National Petroleum Company Limited, NNPCL, and those recorded by the Central Bank of Nigeria, CBN, for 2016 and 2017.

The committee also said its review of crude oil sales from 2015 to date, supported by investigations from international consultants projected that over $200 billion proceeds from the crude oil sales remained unaccounted for globally.

The interim report, which followed months of document reviews, written submissions and public hearings, traced the problem to faulty measurement systems, weak regulatory oversight and poor coordination among the government’s agencies.

It identified the use of unverified measuring instruments, lack of metrological control, ineffective interagency collaboration and uncoordinated enforcement mechanisms as major enablers of crude oil theft.

The report, however, faulted the suspension of the Weights and Measures Department’s activities in the upstream sector under the Petroleum Industry Act (PIA) 2021, saying the decision undermined accountability and accurate measurement in crude oil operations.

It also noted that the absence of a special court to prosecute oil thieves and the non-implementation of the Host Communities Development Trust Fund, HCDTF, under the PIA had contributed to persistent sabotage and theft in oil-producing areas.

The committee projected that the unaccounted proceeds from the domestic crude sales amounted to about N300 billion, calling for urgent local and international tracking, tracing and recovery of stolen crude oil funds for the benefit of the country.

It urged the Federal Government to mandate the Nigerian Upstream Regulatory Commission, NUPRC, to enforce international crude oil measurement standards at all production sites and export terminals or restore the Weights and Measures Department to its former regulatory role.

They also urged the government to provide the security agencies with modern surveillance technology and equipment, including unmanned aerial vehicles, to strengthen monitoring of oil facilities and detect theft and leakages in real time.