- Nigeria lost a staggering $1 billion in revenue in the first quarter of 2022 from crude oil theft.
- With millions of dollars lost daily, Nigeria has been experiencing some of the worst crude oil theft in its history.
- Following the increasing incidents of crude oil theft, there have been several allegations of complicity levelled against powerful individuals and security officials.
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In the last few weeks, news abounds of the discovery of illegal oil pipelines in the Niger Delta where crude oil thieves syphoned millions of barrels of the product to be sold to foreign collaborators.
Reacting to the discoveries, the Chief Executive Officer of the NNPCL, Mele Kyari announced that the company had deactivated the illegal refineries, taken down 273 wooden boats, and ruined 374 illegal reservoirs and 1,561 metal tanks.
Ex-militant leader, Government Ekpemupolo also known as Tompolo, whose company was contracted by the Federal Government to monitor crude oil pipelines, in collaboration with other security agents announced the discovery of 58 illegal oil points in some states in the Niger Delta.
The Rivers State Command of the Nigeria Security and Civil Defence Corps (NSCDC), also uncovered a huge dump site used in storing stolen crude oil and illegally refined petroleum products in Agbada Community, Ikwerre Local Government Area of Rivers State.
All these discoveries were made in a month of courtesy of the proactive force of Tompolo’s men, an activity Nigeria’s security agencies could not detect and put a stop to for many years.
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Oil thieves robbing Nigeria blind
With millions of dollars lost daily, Nigeria has been experiencing some of the worst crude oil theft in its history. Nigeria lost a staggering $1 billion in revenue in the first quarter of 2022 from crude oil theft.
The theft grew from 103,000 barrels per day in 2021 to 108,000 barrels per day on average in the first quarter of 2022, the Chairman of Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Gbenga Komolafe told Bloomberg a few months ago.
The Nigeria Extractive Industries Transparency Initiative (NEITI), in its audit report made public in July 2021, indicated that in 2019, Nigeria lost 42.25 million barrels of crude oil to oil theft, then valued at $2.77 billion, an improvement on the 53.28 million barrels stolen in 2018.
The issues of oil thefts, illegal bunkering and pipeline vandalism in Nigeria have been a menace with resultant revenue losses to the country. The illegal activities have also affected monthly revenue remittance to the federation account. The increasing and indiscriminate oil theft has prevented Nigeria from benefiting amid a sustained oil boom and is affecting the accretion of the country’s foreign reserves.
Stakeholders decry criminal activities of crude oil thieves
A few months ago, the founding MD/CEO of Seplat Energy and Executive Chairman AA Holdings, Austin Avuru, raised an alarm that some oil production wells don’t get to see 80% of production making it to the terminals due to oil theft.
Joining voice with Avuru, another oil sector stakeholder, the Chairman of UBA Banking Group and Heirs Holdings, Tony Elumelu stated that Nigeria is losing 95% of oil production to oil thieves and so, could not meet crude oil production quota and benefit from high oil prices is due to theft.
While speaking during the 49th session of the weekly State House ministerial briefing at the Presidential Villa in Abuja, Kyari maintained that crude oil theft has become widespread and involves different people in the society. Kyari stated that the network of vandals is now in collaboration with churches and mosques where they tend to store some of these products.
Despite high crude prices in 2022, Nigeria is also not able to raise major foreign exchange earnings and is also unable to meet up with its Organization of Petroleum Exporting Countries (OPEC)’s quota in recent years.
Who are the crude oil thieves?
Following the increasing incidents of crude oil theft, there have been several allegations of complicity levelled against security officials.
A report by Vanguard claimed that security sources revealed that the real looting of Nigeria’s crude oil and its by-products is carried out with the connivance of so-called eminent personalities in the society, higher authorities with some security officials looking the other way.
This claim was attested to by the Rivers State Governor, Nyesom Wike when he declared that intelligence available to him indicated that the military, police and Nigeria Civil Defence Corps personnel are collaborators in the crime.
Giving his remark in a panel session held at the NOG Conference in Abuja, the Managing Director of Chevron Nigeria/Mid Africa Business Unit, Richard Kennedy described crude oil theft as organised crime. The Chevron boss may be right in his assertion.
Through recent discoveries, security agencies have only been able to arrest local gangs who could be said to be the foot soldiers of the main financiers of these crimes. Crude oil theft is a multi-billion dollar business which these local gangs cannot afford unless they are working for highly influential individuals taking advantage of their privileged position and vast networks to perpetrate this grave crime.
The involvement of government officials, powerful individuals, security operatives and stakeholders in the host communities cannot be overlooked. Occasionally, members of the security agencies arrest some local vandals, but the big oil thieves often suspiciously remain aloof.
During the recent discoveries, a vessel that was arrested was burnt down to the amazement of many Nigerians instead of investigating the owners. Makes one wonder if the security agencies were trying to conceal evidence.
Time for government to act against crude oil thieves
It is imperative to understand the destruction that crude oil thieves are causing Nigeria’s economic potential. Unfortunately, the government has hardly demonstrated the political will to unmask the big fish in the business of oil thefts, illegal bunkering and pipeline vandalism
However, it is not too late for the government to redeem itself after failing for many years to secure the country’s oil assets. Firstly, security agencies must investigate to ascertain the chief perpetrators of this economic sabotage. NIMASA, Marine Police, Nigerian Navy and Nigerian Inland Waterways need to step up their game as it is only becoming more embarrassing how these barge movements make it through the Nigerian waterways undetected for many years now.
The network or cartel that benefits from these illegal activities, both local and international, must be traced and punished according to the rule of law as a deterrent to others.
Following the discoveries, Nigerians would like to see the government name and prosecute those behind the oil theft menace.
The N4 billion-a-month pipeline surveillance contract by the Federal Government to Tompolo might be controversial, but current events suggest Nigeria is reaping the benefits. However, rather than sporadic and expensive surveillance contract awards, there is need to seek a more permanent solution.