A Review of the Nigerian Energy Industry

$400b oil theft: A revelation and an indictment

30 August 2012, Sweetcrude, London – On Tuesday, August 28, 2012 Mrs. Obiageli Ezekwesili was a guest speaker at the 52nd Annual General Meeting of the Nigerian Bar Association at Abuja. In her paper entitled “Corruption, National Development, the Bar and the Judiciary,” Mrs. Ezekwesili revealed that Nigeria had lost over Four Hundred Billion Dollars to oil thieves since 1960. Although Mrs. Ezekwesili chose the word, “thieves” her repeated reference to “poor governance of public resources,” “the negative effects of corruption” and like phrases suggests that she included corruption and corrupt practices to the general concept of “thieves” or the stealing of Nigeria’s oil and gas resources. The significance will become clear later in this discourse.

Oby Ezekwesili, affectionately referred to as ”Madam Due Process” by the Nigerian Press is no paper weight. Before being nominated for the office of Vice President of the World Bank, Africa Region, Mrs. Ezekwesili served the Obasanjo government as the pioneer head of the Budget Monitoring and Price Intelligence Unit. She is credited as the architect of the legislation for the Bureau of Public Procurement and the Nigeria Extractive Industries Transparency Initiative (NEITI) and for the first ever implementation of the global standards and principles of transparency in the oil, gas and mining sector. Mrs. Ezekwesili served as member of the Federal Executive Council for six and half years, from the Budget Monitoring office to the Solid Minerals Ministry as minister (2005) and to the Education Ministry as minister (2006).

As head of the Budget Monitoring and Price Intelligence Unit and as a substantive member of the Federal Executive Council, Mrs. Ezekwesili would have enjoyed the privilege of security reports on the state and health of Nigeria’s most important mineral resource, crude oil.

The necessary inference to draw from her bold statement that Nigeria has lost about $400B to oil thieves is that the federal authorities since 1960 have had knowledge that crude oil has been systematically stolen from us. If the authorities have known that oil has been stolen, then they must know the points of illegal extraction, theft, sabotage and the locations where ledgers and accounts have been silenced and manipulated for the benefit of the “thieves.” Again, if the authorities knew of the incidents of theft, the locations of diversion of the resource and the departments and agencies and personnel responsible for maintaining correct logs of crude movement and proper accounts for crude payments, then at least the authorities must have also known the particular departments, agencies and personnel that colluded with external factors to undermine Nigeria’s full access to the resource.

What did the federal authorities do? Did they apprehend and prosecute the offenders secretly? Why has the trend not been checked for good? Why didn’t Mrs. Ezekwesili go public with this information till August 2012? Have they again in this instance kept mum in order to protect that most important of Nigerians called ”National Security?” Or do such facts become public knowledge only when the scheme discards of the whistle-blower as redundant?

Whatever it is, we do not know that as citizens of a country, we must agree that this revelation by a former high ranking federal officer indicts successive regimes of the federal government as inattentive trustees of her most valued mineral resource. Would Madam Due Process have waited for this number of years to speak against such magnitude of theft if Nigeria’s oil and gas deposits were somehow willed to the Ezekwesili family? This is the point the people of the Niger Delta have made endlessly, that crude oil in Nigeria is not and should not be a res nullius (a property without a known owner) and that if Nigerians relinquish the rights in oil, gas and every other mineral resource to the people and states that own them while preparing an efficient tax regime at the federal level, the government would play it’s monitoring role more efficiently as it can only tax what is apprehended, the owners occupiers of the land would inspect operations more squeakily as they would suffer the primary effects of spills by oil loss and environmental degradation, the operators would be more circumspect as they would not have bogus cash call and production sharing agreements to hide their negligence in, oil regulators would raise the bar of performance and the system would work without waste. If the federal government only monitors and regulates oil production, the wage bill for three quarters of the Petroleum Ministry and the whole of the NNPC, DPR and all the other parasites on our commonwealth would be saved for other needy projects and who says that the federal government cannot impose a 40% or 45% tax on oil production, stay in the wings while the owner states and operators produce the oil it finally taxes?

And now thanks to the hundreds of ‘illegal’ refineries operated in the Niger Delta, it is no longer a matter for speculation that in addition to the bureaucrats, politicians and soldiers who facilitate the wheels of corruption to deny Nigerians unknown quantities of oil and gas, the people of the Niger Delta, the owners/sufferers of the exploited, polluted and excoriated lands, creeks and rivers have eventually “joined” the system they could not defeat through protests, passive and active resistance and for whose continuity the region has bled its best, by operating and allowing the operation of illegal refineries in their territories where crude oil is taken from pipes broken through the deployment of inferior materials, negligence and deliberate acts of sabotage by both operators and “refiners.” Oil theft had hitherto been elitist, the preserve of high bureaucrats in the Petroleum Ministry, the NNPC, retired soldiers, chairmen of important committees in the National Assembly, etc.

Having been joined by a cadre of thieves who are not only openly so but are also avowedly desperate in their hunger and their resolve to wash away the filth in their eyes with water from their own swimming pools used without leave so far by strangers to assuage strange impulses, the equation has become more compounded for the authorities to resolve not only due in part to government’s open culpability but more because this cadre, rising from the alluvial seabed of the Niger Delta are the living ghosts of the region created and defined by policies of government who seized their lands and resources and declared them inconsequential in the direct matters of their lands, their religious worship sites, lost occupations and lost self esteem, their despoiled environments and lost resources formed by the ancient fossils of their forebears.

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