The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says Nigeria has recorded 1,600 cases of pipeline vandalism since January.
Kachikwu made the disclosure at the 2016 Annual Conference of National Association of Energy Correspondents with the theme, “Low Oil Price: Impact and the Way Forward”, in Lagos on Thursday.
The minister also said that the country recorded over 3,000 pipeline vandalism cases from 2010 to 2015
He said that the impact of attacks on oil and gas pipelines was that there was no money to fund the 2016 budget.
The minister said that declining price of oil in the international market had negatively impacted the country’s revenue leading to economic recession.
He said that proactive steps were required to bring Nigeria’s economy back on positive track.
According to him, while vandals wreak havoc on oil facilities and cripple local production, over-supply of product in the market is affecting prices and creating shocks to the economy.
Kachikwu said time had come for the country to face the reality of the time as there was no assurance that the price of oil would peak as being speculated.
He explained that OPEC merely controlled 30 per cent of the market while 70 per cent was in the hands of major producers, such the U.S., Russia and Mexico, which were not OPEC members.
He said that the industry was challenged by six billion dollars cash call indebtedness accumulated over the last five years.
The minister said that with inadequate financing of the industry, no investment had occurred in the sector in the last five years.
He said 643 million litres of petroleum products amounting to N51.28 billion was lost in 2015, while between January and June a loss of 109 million litres of petroleum products and 560,000 barrels of crude had been recorded.
He said that about 850 million standard cubic feet of gas production had been lost from crises and power outage exposure of 2,700MW. to 3,000MW.
The, minister said government was stepping up efforts to make robust policies that would finalise and gazette a comprehensive gas policy, unlock gas potential and ensure effective development of Nigeria’s gas market.
He said the policy would help to transit from gas flare penalty regime to gas commercialisation and shift focus from government built to investor built infrastructure.
Kachikwu said for the industry to rebound, efforts should hinge on developing National Oil, Gas, Downstream, Fiscal Reform policies as well as the Petroleum Industry bill.
He said that local refineries would be scaled up to attain full capacity from the present 60 per cent and added that by 2018, the country would reduce importation of products and finally cease product import by 2019.