According to reports by the Finance Ministry, activities of oil pipeline vandals has greatly contributed to a decline in oil production of up to 42% in Nigeria. This translates to a gross revenue drop of N497.98 billion ($3.1 billion) in July.
An online financial website, Platts McGraw Hill Financial, also reported this in its report.
“The gross revenue of N497.98 billion received for the month was lower than the Naira 863.02 billion received in the previous month.
“This was due to continuous theft of crude oil, leakages, pipeline breaks at various terminals, high-pressure compressor failures and repair work,” the ministry said.
The statement further revealed that the country was forced to withdraw N115 billion from its oil windfall savings account to provide money shared out between Nigeria’s 36 states to pay public workers and finance capital projects for July.
Finance Minister Ngozi Okonjo-Iweala said in July that Nigeria’s revenues were dwindling due to the loss of about 400,000 b/d of its oil production to pipeline sabotage, illegal bunkering and large-scale theft.
Data released by Nigeria’s central bank this year, has shown that oil production has been lower than the 2.53 million b/d assumption used by the government for the purpose of revenue calculation in the 2013 budget.
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