Black Hole: Nobody knows how much oil Nigeria sells

As they have done every day for the past 50 years, oil tankers steamed away from Nigeria's coast yesterday loaded with hundreds of thousands of barrels of crude, from which Nigeria gets most of its income.
But the Nigerian government cannot say exactly how much oil is being lifted from the country, mostly by Shell, Mobil, Chevron, Total, Agip and a few others.
Instead, the government of Umaru Yar'Adua, like all others before it, relies almost entirely on whatever the oil companies tell them.
The situation is such that, if Mobil, for example, declares that it lifted 50,000 barrels of oil yesterday, the government just has to take their word for it.
Worse still, Nigeria's political leaders and top bureaucrats for decades have not shown the slightest interest in finding out. In a notoriously corrupt industry, which has spawn scandals such as the on-going Halliburton case, roping in the top echelon of the political class, it is very convenient to keep everything vague.
Add to this the increased crude oil theft or illegal bunkering in the Delta region described by President Umaru Yar'Adua in July 2008 as fuelling a trade in 'blood oil', which is run by powerful cartels and the figures officially quoted become increasingly weightless.
Obscurity
Even a cursory check by NEXT has revealed that various agencies of our government give conflicting figures of how much oil we produce and sell.
The Central Bank, the Ministry of Finance, the Department of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) cannot agree on exactly what the numbers are.
So they have come up with an ingenious solution: they simply 'average' the various figures and let sleeping dogs lie.
Among Nigeria's most significant oil ministers over the past several decades are the former president, Olusegun Obasanjo, who for several years served as his own oil minister.
And the current oil minister, Rilwanu Lukman, has been in and out of the same job so many times that he has become nearly synonymous with the portfolio.
If either of these two gentlemen, or any of their predecessors, ever was troubled by this shabby state of affairs, which almost certainly guarantees large scale theft of our resources, it is unknown to an unsuspecting public.
A brick wall
For several days, we tried to reach the minister of state for petroleum, Odein Ajumogobia, but each time he promised to get back to us but never did.
The Nigerian National Petroleum Corporation, our state oil company which enters into joint ventures with the oil multinationals, even goes so far as to say on its website that it cannot be held responsible for the accuracy of the sales figures it publishes.
The Central Bank, which receives the money on behalf of the Nigerian people, also would say nothing regarding the veracity of these numbers.
The Department of Petroleum Resources (DPR), the industry regulator, makes the astonishing claim that it does not know the figures.
After more than two weeks of constant calls, text messages and email, the department's acting director, Billy Agha, informed us through a spokesman that "we only corroborate what NNPC gives to us."
Oil revenues account for more than 90 percent of our foreign exchange earnings and more than 80 percent of total revenue.
How much of it we get directly affects our ability to pave our roads, care for our infirm, secure our neighbourhoods and educate our children.
The politics of numbers
The mystery surrounding a simple issue of accounting for oil revenue has proved impervious to changes in administrations, political parties, elected governments or military dictatorships.
Last month, the news agency Reuters quoted Mr. Lukman as putting our daily oil production at about 2 million barrels per day. But Mansur Muhtar, the minister of finance, has quoted an average of 1.6 million barrels per day, which according to him, is "significantly lower than government projections."
Last week, Mr. Ajumogobia put the production figure at 2.1 million. Even if Nigerian citizens are to be deceived, government officials should at least agree on a particular figure, and all of these announced figures are at variance with data supplied to the Organisation of the Petroleum Exporting Countries, the cartel that caps how much oil each of its members is expected to produce.
Nigeria has come a long way from producing about 500 barrels per day following the discovery at Oloibiri in 1958, but the oil majors that have been instrumental since that time, were understandably reluctant to talk to us last week. The current method of accounting seemingly works as well for them as it does for the public officials in charge who have maintained it.
NNPC's Disclaimer
Even the figures quoted in the NNPC's latest Annual Statistical Bulletin (2007) posted on its website, had a caveat; "The publications in this section present information on the oil and gas industry. Its content reflects individual as well as general analysis and trend of activities that characterised the industry within the country.
"Although NNPC endeavours to ensure accuracy of information in these documents, it cannot guarantee 100 percent accuracy nor can it be held liable for errors that may occur. Users are to note that use of any information herein is purely at their discretion."
In their defence, some in the industry say they have technical challenges that make it difficult to collate accurate figures. "Production figures are voluminous. If someone is sitting down and doing the stuff manually, the person will be confused," said a key industry executive.
"They should have a spreadsheet such that as the figures come in they are being recorded automatically. For them to come up with a compilation that is accurate, they need to have adequate data management, which they do not have, as is the case in all government establishments."
As a result, while some base their estimates on the volumes arriving at terminals and off-take points, others are based on volumes from oil wells and flow stations. These were responsible for the disparity in the NEITI's Audit of 1999-2004.
Oil workers don't know
Even oil industry workers don't have a clue. Peter Esele, former president of the Petroleum and Natural Gas Senior Staff Association, says, "Whatever information that is gotten from the NNPC is from the producers.
"One thing is clear, DPR does not even have the capacity to undergo or even know the quantity of crude. They don't have a meter, they don't have a measuring meter. Now, if you go to NNPC, the figure is different, DPR's is different, producers' different, CBN is different. So you cannot really reconcile all this." Esele for a time had served in NEITI.
Peter Akpatason, president National Union of Petroleum and Natural Gas Workers, said: "Officially we don't know. But we have access to the information each time we want to get them.
"But, it is not as if on daily basis, we get the figures. I'm sure you know that there is always discrepancy of some sort between what NNPC declares and what DPR declares.
"What somebody explained to us in DPR is that NNPC figure is taken at the point of production while DPR take theirs at the terminal."
For Mr. Akpatason, the reason for these discrepancies is because, "The case of oil production is like any other developmental issue in Nigeria. The government has always shown ineptitude in handling very serious economic issues in this country.
And for us, we believe that this is a mark of poor leadership. Because, there is no reason why a country cannot say specifically that this is the quantity of goods and services that are produced and this is the naira value of such goods and services."
Cut-backs, shut-ins and oil theft
Some international energy industry watchers and agencies believe that keeping the numbers vague is deliberate. For instance, some allude to Nigeria's tendency, like all other members, to exceed OPEC's quota. Last September, OPEC agreed to cut output by 4.2 million barrels.
For Nigeria, this implies a cut-back of 320,000 to keep output at 1.67 million barrels effective from January 1. However trading sources say that Nigeria's export levels for May are expected to average 1.81 million barrels - to the extent that anyone really knows.
The unrest in the Niger Delta also is having a significant impact. According to oil companies and trading sources, Nigeria has shut-in or lost about 606,500 barrels due to sabotage to oil facilities, representing about 20 percent of the nation's installed output capacity of around 3 million barrels per day.
Whatever the figures are, the reality remains that the new production targets of 4 million barrels and 40 billion reserves will not be achieved next year, according to Victor Agbe-Davis, president of the Nigerian Association of Petroleum Explorationists.
"Right now, we have challenges in the Niger Delta that is one big factor, and government is trying to solve the problem. For any exploration and production company to survive, you need to grow your reserves, but the challenge is that the areas where these fields are, are insecure because someone can just go and cut the pipelines and you're forced to shut-in some fields.
By the time this is done, you are reducing contribution. So it is not easy to ramp up production without adequate infrastructure and security," he said.