Risk Assessment of Pipeline Vandalism on Oil and Gas Production Levels in Nigeria

Solomon David Pere PhD; Kologa Inebimowei Freedom

doi:10.56201/ijefm.v11.no2.2026.pg75.90

📄 Download Paper

Risk Assessment of Pipeline Vandalism on Oil and Gas Production Levels in Nigeria

Solomon David Pere PhD, Kologa Inebimowei Freedom

Abstract

This study assessed the impact of oil pipeline vandalism on crude oil and gas production levels in Nigeria between 2010 and 2024. Despite the widespread assumption that sabotage significantly disrupts output in the oil and gas sector, empirical evidence has remained limited. Using a Vector Error Correction Model , along with correlation analysis and stationarity testing, this research analyzed the relationship between the frequency of pipeline vandalism and fluctuations in national oil production. The findings revealed a weak negative correlation between the two variables and showed that the direct effect of pipeline vandalism on production was statistically insignificant in both the short and long term. Furthermore, the impulse response and variance decomposition analyses indicated that crude oil production fluctuations were largely self- determined, with only minor influence from sabotage incidents. These results suggest that while vandalism remains a pressing security and operational concern, its measurable effect on production output is limited. Consequently, the study recommended that policy interventions should prioritize addressing the root socio-economic causes of vandalism, such as unemployment, poverty, and community marginalization rather than treating it solely as a production issue. Enhancing community engagement, investing in development, and adopting modern surveillance technologies are proposed as long-term strategies for mitigating the risk and improving the resilience of Nigeria’s oil and gas infrastructure.

Keywords

Pipeline VandalismOil and Gas ProductionNigeriaRisk AssessmentEnergy SecurityNiger Delta

References

Adishi, E. & Hunga, M. O. (2017). Oil theft, illegal bunkering and pipeline vandalism: it’s impact on Nigeria economy. International Journal of Economics and Business Management, vol. 3, (2), 4765. Anifowose, B. (2023). Attacks on oil transport. International Journal of Innovative Business Strategies , Volume 9, Issue 2, 2023. Bakpo, J., Ekong, A., & Musa, S. (2023). Crude oil theft, the resource curse, and economic growth in Nigeria. Journal of African Political Economy, 11(3), 120–137. Dimkpa, E., Lawal, A., & Uduak, F. (2023). Economic impact of oil theft and vandalism in Nigeria. African Review of Economics and Finance, 15(1), 88–105. Edun, O., Okon, J., & Bello, M. (2023). Systems thinking approach to oil pipeline vandalism in the Niger Delta. Nigerian Journal of Development Studies, 18(2), 77–94. Edward Ohwofasa Okumagba (2019) Oil and gas pipeline 'Vandalism' in Nigeria: Analysing alternative options beyond the traditional legal approach. International Energy Law Review 186. Jesse pipeline fire. (2018). Incident report and press coverage. Nigerian National Petroleum Corporation and local media reports. Knight, F. H. (1921). Risk, uncertainty, and profit. Houghton Mifflin. Nigerian Extractive Industries Transparency Initiative. (n.d.). Oil and gas industry reports. https://www.neiti.gov.ng Mmeje, D, U., Bello A & Mohammed U.D. (2017) Investigation of Pipeline Vandalism and Its Implications on Business Activities in Nigeria. A theoretical periscope African research review, 3(5). NNPC Ltd. (2024). Annual statistical bulletin. Nigerian National Petroleum Corporation. OPEC. (2022). Annual statistical bulletin. Organization of the Petroleum Exporting Countries. Oyovwevotu, E. (2023). Supply chain risk management in Nigerian marginal oil fields. Energy Logistics Review, 7(2), 45–61. Raiffa, H. (1968). Decision analysis: Introductory lectures on choices under uncertainty. Addison- Wesley. Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. The Journal of Finance, 19(3), 425–442. https://doi.org/10.2307/2977928 Stella, A., Ibrahim, T., & Nwachukwu, E. (2024). Non-technical risks in Nigeria’s oil and gas sector: Environmental and social dimensions. Journal of Energy Policy and Risk, 12(1), 34–52.

Risk Assessment of Pipeline Vandalism on Oil and Gas Production Levels in Nigeria

Abstract

Keywords

References

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT