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.

It called for the establishment of a Maritime Trust Fund to support the development and maintenance of maritime infrastructure, training and safety operations, as well as the creation of a special court to promptly prosecute crude oil thieves and their collaborators.

The committee further advised the immediate implementation of the HCDTF to reduce community sabotage and promote inclusion in the management of oil resources.

However, apart from financial losses, the committee equally expressed concern over the growing number of abandoned and poorly decommissioned oil wells across the Niger Delta, which it said were leaking oil and gas into the environment and polluting communities.

It recommended that such wells should be ceded to the NUPRC for handover to modular refineries to increase crude availability for local consumption and reduce vandalism.

However, it noted a modest recovery in crude oil production, which increased by 9.5 percent in 2023 from 490.95 million barrels in 2022 to 537.57 million barrels, indicating an improvement in production and security conditions.

The Committee, which was reconstituted on February 11, 2025, following the death of its former chairman, Senator Ifeanyi Ubah, urged the Senate to grant it authority to track, trace and recover proceeds of stolen crude oil globally.

It said the recovery of the funds was crucial to rebuilding accountability in the oil sector, strengthening Nigeria’s fiscal position and deterring future theft.

But while commending the committee for a good job, the Senate stressed that it was not its job to recover stolen funds. It directed the committee to conclude its investigation and name the oil thieves, after which its recommendations will be sent to the executive for further action.

However, reactions trailing the revelations have been a potpourri of anger, disappointment and silence, as well as a call for drastic measures to forestall future occurrence of such financial sleaze.

Those who are angry and disappointed with the report said the development has just confirmed what has been known over the years, which is that the level of corruption in the oil sector is stinking and deeply rooted.

Prominent in this group is an oil industry analyst, Idowu Christopher, who said the government knows the people involved in oil theft but had refused to do anything about it.

“Is anybody surprised about the report? The answer is no. The government knows where the problem is coming from but refused to act. Apart from those who steal our crude oil, what about those who own the oil well? Where is that done?

“How can an individual own an oil well? A commonwealth of the people being owned by one person and the government is not doing anything about it? It is only in Nigeria that such abnormality happens without consequences.

“I like the recommendation of the committee that such oil wells should be recovered and handed over to NUPRC, which in turn, will hand them over to modular refineries to increase crude availability for local consumption and reduce vandalism.

“Again, why has the government not implemented the HCDTF, under the PIA? The development has been identified as being responsible for persistent sabotage and theft in oil-producing areas. So, as far as I am concerned, the government should be held responsible for allowing such huge proceeds to be unaccounted for because it has deliberately failed to perform its functions,” he told DAILY POST.

For an analyst, Chikia Umeayo, there is no need to be angry or disappointed because such development has become a norm, a way of life in Nigeria.

“In fact, it would have been surprising if the report was contrary to what we now have,” the leading voice and legal practitioner stated.

Continuing, he said: “Some of us have been talking about these things for some years now without any result. The government does not want to take action; so we have decided to remain silent.

“I no longer bother myself about some of these reports because at the end of the day, nothing will come out of it. Absolutely nothing; so why should I be angry or disappointed over something I know will keep happening?”

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