A Review of the Nigerian Energy Industry

Only Three Million Barrels Stolen!

06 July 2012, Vanguard Newspaper Editorial, LAGOS – WE hope Chief of Defence Staff, Air Vice-Marshall Oluseyi Petinrin, was not feeling triumphant when he told the House of Representatives committee probing the oil industry that oil thieves stole only about three million barrels of crude oil monthly. He sounded so.

Petinrin said about 90 million barrels were stolen monthly before Defence Headquarters intervened months back. If he was simply looking at the “savings of 87 million barrels of oil monthly”, he could celebrate. Has he heard that many blame the security agencies for condoning the thefts, which put the economy at peril?

The defence chief must admit that how much oil is stolen remains guesswork. Even if only three million barrels of crude oil were stolen monthly, the magnitude of the theft should not result in the type of posturing that Petinrin brought to the House.

At $75 per barrel, three million barrels of stolen crude cost Nigeria N36 billion monthly. Such huge sums in wrong hands have vast implications. The N34.67 billion the 2012 budget proposed as capital expenditure for the Ministry of Defence – Army, Air Force, Navy – is less than what, from Petinrin submission, thieves steal in one month.

In a year, N432 billion would be lost to the thieves if they keep their ambitions and oil prices remain at $75 per barrel. The money is about 10 per cent of the 2012 budget and almost three times the N149 billion allocated to the Ministry of Works for capital expenditure.

The annual loss to oil thefts can build 14 new bridges across the River Niger at the estimated cost of N30 billion. There is a lot that N432 billion can do for the Nigerian economy. More damage is done to the economy and the security of the country when people acquire huge resources illegally.

The main measure Petinrin proposed for minimising oil theft is the registration of all boats and barges plying Nigerian coastal waters with Defence Headquarters and the Joint Task Force.

According to Petinrin, “the agency of government that is supposed to do certain things has refused to carry out its responsibilities; we decided to take up the challenge towards curbing the menace of illegal bunkering.” Oil thieves benefit from the conflicting roles of security and other agencies that watch our waters. Seized boats are the least challenge for oil thieves. The proceeds of a day’s operations can buy 60 new boats.

Ready markets for stolen crude, huge profits, minimal risks as government ignores the illegality and connivance of security agencies are factors that sustain the thefts.

The biggest threat to the thieves will be a concerted strike at them. Currently, the determination is unavailable.

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