“This is a local problem that needs to be tackled by local government. It has definitely affected the industry a lot,” Giuseppe Recchi, chairman of Africa’s largest oil and gas company, Eni, told CNBC Africa on Wednesday.
Recchi spoke on the issue of oil theft in Nigeria at the World Economic Forum’s Annual Meeting of the World Champions 2013, also known as the Summer Davos in China.
Eni owns large oil assets in the region and is one of the major groups to be affected by the thefts.
“We're the biggest oil company in Africa and have been there since the early 50's so we feel at home in Africa,” he added.
However, with the lack of control by the Nigerian government on these thefts, international oil corporations such as Eni may eventually have to sell off their assets in the region and look to other African countries for oil exploration opportunities.
This in turn would severely affect Nigeria’s economy as a whole.
“This is the biggest risk around the world. It’s a risk we cannot manage, it needs control and mitigation because it’s not in our hands to take control of local security, it is a government thing and we hope it can be tackled soon,” said Recchi.
According to data from the first quarter of 2013, oil theft causes Nigeria to lose about 1.2 billion US dollars of oil revenue in a single month, resulting in a 17 per cent fall in oil sales.