Nigeria loses $15b annually to oil theft — Study

By Grace Edet

Nigeria is losing an estimated $15 billion annually to oil theft and pipeline vandalism, according to a new study by energy economist Professor Usman Muhammed of Kaduna State University.
He warned the development could derail the Tinubu administration’s Renewed Hope Agenda beyond 2027.
Presenting the report at the 1st Citizens Engagement Conference (North-West Edition) in Kaduna, themed “The Positive Impact of Oil and Gas Reforms by President Bola Ahmed Tinubu,” Professor Muhammed described the losses as “a major threat to national economic recovery and fiscal stability.”
“Despite being Africa’s largest oil producer, the country continues to struggle with declining productivity and weak institutional accountability,” Muhammed said.

Sector under strain despite huge reserves

The study noted that Nigeria, which holds about 37 billion barrels of crude oil and 209 trillion cubic feet of gas reserves, remains hamstrung by poor governance, policy inconsistency, and decaying infrastructure.
Between 2019 and 2024, the country’s oil output averaged 1.4 to 1.67 million barrels per day (bpd) — below its OPEC quota of 1.8 million bpd, while inflation and unemployment climbed to 22 per cent and 33 per cent, respectively.
Muhammed said these trends have combined to erode national revenue, deepen economic hardship, and weaken investor confidence in the energy sector.

PIA implementation yet to deliver full impact

The report acknowledged that the Petroleum Industry Act (PIA) 2021 introduced key structural reforms, including the creation of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
However, he noted that the benefits remain “largely unrealised” due to weak enforcement and poor institutional coordination.
“Implementation of the PIA and the commercialisation of NNPC have begun to yield modest results, but production efficiency and local content development remain moderate,” he said.
Muhammed’s findings also showed a strong correlation (r = 0.74) between crude oil production and GDP growth, suggesting that higher output could significantly boost Nigeria’s economic performance. Regulatory quality and investment inflows, he added, account for over 81 per cent of GDP variance in the oil and gas sector.

Nigeria trails peers in regulatory performance

A comparative analysis presented at the conference placed Nigeria far behind global peers in regulatory efficiency, scoring 63 out of 100, compared to Norway’s 92 and the United States’ 90.
Muhammed attributed this gap to poor technology adoption, weak oversight, and inadequate policy coherence.
“The twin problems of oil theft and pipeline vandalism have continued to undermine the sector’s growth. Without decisive measures, Nigeria risks losing the transformative gains envisaged under the Renewed Hope Agenda,” he warned.
The study recommended digital monitoring of oil production, rehabilitation of pipelines with anti-theft technologies, and increased research and development funding. It also called for deeper investment in gas-based industrialisation to diversify the economy.

Private capital seen as the way forward

In his remarks, Mallam Nasir AbdulQuadri, Co-convener of the conference, urged the federal government to step back from direct participation in refinery operations and allow private investors to lead the process.
He said: “When we talk about reform in the oil sector, it means the government must take its hands off business. Public refineries have failed for decades, but one man’s vision has given us the 650,000 barrels per day Dangote Refinery — proof that private ownership works.”
AbdulQuadri argued that deregulation is already paying off through increased transparency and reduced corruption.
“When we deregulate, we kill corruption. The subsidy era enriched a few individuals at the expense of the nation. Now, the process is open and transparent,” he explained.

Bridging the policy-citizen gap

AbdulQuadri emphasized the need to improve public awareness about the government’s reform agenda, noting that misinformation has clouded citizens’ perception of the sector’s progress.
“This conference is about bridging the information gap between citizens and government. Many Nigerians are unaware of the positive changes happening in the sector, and that ignorance breeds misinformation,” he said.
He further appealed for unity and collective support for reforms, adding: “In this country, we don’t have Hausa, Igbo, or Yoruba; we don’t have Muslim or Christian — only good and bad people. Good Nigerians must work together against those using tribe and religion to divide us.”

Experts call for stability and transparency

Participants, including regulators, industry experts, and civil society leaders, agreed that the long-term health of Nigeria’s oil and gas industry depends on policy stability, transparency, and greater private-sector participation.
Professor Muhammed concluded that the sustainability of Tinubu’s Renewed Hope Agenda hinges on deeper institutional reform and diversification of the economy.
“Sustainable growth beyond 2027 depends not just on oil output, but on Nigeria’s ability to institutionalise regulatory excellence, diversify its economy, and strengthen public accountability,” he said.