Lagos (Platts)--4Oct2012/648 am EDT/1048 GMT

Nigeria lost of a total of $7 billion in potential oil revenue in 2011 due to theft through sabotage attacks on pipelines and production facilities in the Niger Delta, constituting a major drain on the nation's economy, central bank chief Lamido Sanusi said.

At a meeting with lawmakers who are scrutinizing the government's 2013-2015 Medium Term Expenditure Framework in Abuja, Sanusi called for the bombing of illegal refineries in the Niger Delta region that serve as outlets for stolen crude.

"To save the budget is to increase [oil] output and block leakages, especially through oil bunkering and bombing illegal refineries in the Niger Delta. If we can do all this, then it will be better for the economy," the central bank governor, whose remarks were carried on state radio, said.

"We need to stop the stealing of oil in the Niger Delta. We lost $7 billion to oil theft last year alone."

Sanusi expressed doubts over Nigeria's current oil output level, estimated at around 2.7 million b/d by state oil firm Nigerian National Petroleum Corp., given the significant loss in production through vandalism of facilities and theft.

Lawmakers from the House of Representatives met with the bank's governor to discuss the possibility of increasing Nigeria's oil price benchmark for the 2013 budget from the $75/barrel proposed by the government.

Nigeria relies on oil for more than 95% of government revenues.

Oil companies say tapping into oil pipelines to steal crude and other forms of oil theft, known in local parlance as illegal bunkering, has been on the rise in Nigeria.

Nigeria's biggest oil player, Royal Dutch Shell, said Sunday that it had deferred the production of 150,000 b/d of Nigeria's Bonny Light crude grade, following a fire on a pipeline in the Niger Delta suspected to have been caused by oil thieves.

Earlier in the year Shell had estimated Nigeria was losing 150,000 b/d to theft.

Nigerian President Goodluck Jonathan has promised a crackdown on oil thieves, while security agents have destroyed several thousand illegal refineries in the Niger Delta and made several arrests of members of illegal syndicates.

--Staff, newsdesk@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

Creative Commons License

To subscribe or visit go to:  http://www.platts.com