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Crude oil hits two year high at over $70 per barrel

Crude oil price opened the week on Monday trading at $70 per barrel more than two percent it traded on Friday following reports of attacks on Saudi Arabian facilities.

This is the first time since 2019; the price of oil has went past the $70 mark. The last time was in May 2019 according to data from oil price.

However, worries remained that higher prices could mean some Organization of Petroleum Exporting Countries (OPEC) members will want to pump.

The Organization of Petroleum Exporting Countries and its allies including Russia had been debating whether to restore as much as 1.5 million barrels a day of output.

Nevertheless, with the oil pricing rising above record level, this could mean more income for Nigeria at least for the near term.

Nigeria’s 2021 approved budget oil prices benchmark is $40 a barrel and 1.86 million barrels a day of crude production.

For seven years, crude oil lifted from Nigeria between 2005 to 2012 worth over $20 billion was unaccounted for according to the House of Representatives.

Chairman, Ad-hoc Committee on Crude Oil Theft, Hon. Peter Akpatason disclosed this on Wednesday, during the resumed hearing with top officials from the Department of Petroleum Resources in Abuja.

Akpatason also noted that the same trend of infractions were observed between 2016 and 2019.

“Forensic analysis of the data revealed a very wide margin between what was reported produced and what was lifted. We need an explanation from stakeholders involved.

“DPR is the agency of government saddled with the responsibility of monitoring crude oil production and lifting. The Committee requested and obtained schedules of crude oil produced and lifting between 2005 to 2019.

“Forensic analysis of the data revealed a very wide margin between what was reported produced and what was lifted. Between 2005 and 2012, DPR reported production of 1,746,621,167 barrels from four sampled oil terminals of Egeravos, Bonny, Forcados and Bonga.

Out of these production volumes, only 1,417,200,848 barrels were accounted for, as having been lifted officially. A whopping volume of 329,420,319 barrels, valued at over $20 billion, could not be accounted for. The same trend of infractions was observed in the years 2016-2019″, he revealed.

In defense, DPR Director/CEO, Sarki Auwalu, blamed the crude theft on third party interference, especially at the land terminals.

“I will like to use this opportunity to give a brief on how we will account for hydrocarbon in this nation. I think that will provide a better view of this committee as well as Nigerians. The process starts with well, because every crude oil comes from well, and you cannot drill a well without knowing the capacity of that well to produce.

“Most of the thefts, they are coming from land terminals because the land producers, they have to use pipelines to transport the crude into the terminals for export. In the process, you have a lot of third party interference in which those points of theft were there; small volumes that account for the larger volume are being taken and they are being stolen”.

Auwalu explained further that most of the discrepancies in production and export, you can easily calculate the theft volume. And the theft volume, if not all, come from the land terminals. But the offshore terminals, it is actually practically impossible to steal crude from offshore terminals, since it is from the bottom of the sea.

Department of Petroleum Resources appearance on Wednesday before the committee will be followed by Nigeria National Petroleum Corporation and the Central Bank of Nigeria on Thursday and Friday respectively