A Review of the Nigerian Energy Industry

Unearthing real culprits behind illegal oil bunkering in Nigeria

Illegal-refinery-operation-220910 June 2014, Lagos – Illegal oil bunkering in the Niger Delta region is one of the perennial problems of Nigeria. The crime has grown in leaps and bounds in recent years because there was not much effort by successive administrations to address the problem.

While economies of countries where Nigeria’s illegally bunkered oil are sold thrive on this cheap and illicit oil, that of Nigeria, biggest oil producer in Africa has continued to dwindle.

The Nigerian Navy confirmed recently that the country loses about $20 billion annually to crude oil theft. Director, Nigerian Navy Transformation Office, who made the recent disclosure in Calabar, Cross River State, said an estimated 55,210 barrels of oil per day or monthly average of 1,656,281 barrels was stolen by oil thieves in 2013.

Military indicted
In 2001, President Olusegun Obasanjo, as he then was, had set up a Special Security Committee on Oil Producing Areas, with a target to identify those behind the illegal oil bunkering and proffer solution on how to tackle the problem.

The committee had noted in its report that “a major threat to Nigeria’s oil industry arises from activities of a ‘cartel or mafia’, which comprises highly placed and powerful individuals within the society, who run a network of agents to steal crude oil and finished produce from pipelines in the Niger Delta region”.

The committee also observed that those responsible for halting or diverting oil production and preventing free traffic on the waterways “could be enjoying the patronage of some retired or serving military and security personnel.”

The committee also discovered that vessels used in the sordid deal were often seized by the army and navy, but their cargoes were unaccounted for.

Also, the late President, Umaru Musa Yar’Adua, also in July 2008, appealed to the Group of Eight (G8) nations for assistance on how to tackle the problem.

Nigeria was said to have repeated the call at the United Nations in September that same year and again in Washington in December 2008 and March 2009.

It was learnt that efforts by the international community to assist Nigeria fight the decades-long problem had been frustrated by top military personnel and political allies of government, who benefitted from the illicit oil business.

Last week, Elder statesman and one of the Federal Government delegates to the National Conference, Chief Edwin Clark accused top military personnel of involvement in illegal oil bunkering in Niger Delta.

Clark, who made the allegation while contributing to the report of the Committee on Public Finance and Revenue, traced the trend back to the early ’70s when the oil began to create a boom in the economy.

The Ijaw leader claimed that when the trend was observed, he quickly alerted the then President Obasanjo who in turn directed General Theophilius Danjuma, who was the Minister of Defence at that time to investigate the issue. He said investigation revealed that military personnel were actually those behind the illicit oil bunkering.

Clark said some of the military officers linked to the sordid act had been retired, while others are still in the service. To stem te tide, he suggested that the troops in the Niger Delta should be changed from time to time, as doing so would go a long way to curtail the rate at which Nigeria’s oil is stolen.

In an attempt to exonerate youths in the region who have been accused of complicity in the crime, Clark said the Niger Delta youths only embark “on bucket bunkering, which is on a small-scale as they don’t possess the technological know-how required for such operation.”

Wikileaks revelation
The revelation last week by Clark was not the first time the military was linked to illegal oil bunkering. In 2010, a United States diplomatic cable, WikiLeaks revealed that politicians and military leaders, not militants were responsible for the majority of oil thefts in Nigeria.

According to the US cable, which quoted an unnamed Nigerian official, a member of a government panel on troubles in the Niger Delta implicated a late general and a former vice-president as being the biggest forces behind the thefts.

Those thefts, the report added, also fuelled arms sales to the restive region while causing environmental damage and cutting production in a nation crucial to US oil supplies.

Specifically, the US cable revealed that politicians, retired admirals and generals and political elites profited from crude thefts.

“The military wants to remain in the Niger Delta because they profit enormously from money charged for escorting illegally bunkered crude and from money extorted in the name of providing security on the roads,” the cable read, adding, the foot soldiers are not the only ones who profit; the commissioner of police, the director of the State Security Service and the military, all line up at the governor’s door asking for favours.”

In a special report in 2009 titled ‘Blood Oil in the Niger Delta’, the United States Institute of Peace, an independent, nonpartisan institution established and funded by Congress, Judith Burdin Asuni, founder and executive director of Academic Associates PeaceWorks, had noted that between 30,000 and 300,000 barrels of oil per day is carted away by oil thieves who operate in Niger Delta.

The report, which Asuni said was based on her extensive experience in the oil-rich region, where she had worked with Nigerian governments at the federal, state, and local levels; the oil and gas companies said approximately US$100 billion was lost from illegal oil bunkering between 2003 and 2008.

The report, which was also based on information from local communities; members of the armed groups in the region, as well as interviews with U.S., British, Dutch, and UN officials, identified three types of illegal oil bunkering as small-scale pilfering for the local market, large-scale tapping of pipelines to fill large tankers for export, and excess lifting of crude oil beyond the licensed amount.

In 2010 alone, the JTF impounded vessels carrying 724 metric tines of stolen crude. The JTF announced during one its operations  that it destroyed about 6,000 illegal refineries across Niger Delta. More than 150 persons suspected alledegly involved in illegal bunkering were said to have been arrested. Also, the Nigerian National Petroleum Corporation (NNPC) also revealed that the task force arrested vessels carrying 1.3m barrels of stolen crude.

Accusation/Counter accusation
Recently, the Special Adviser to President Goodluck Jonathan of Nigeria on Niger Delta Affairs, Kinsley Kuku accused oil workers of complicity in the oil theft.

But in a swift response, the oil workers’ unions under the aegis of PENGASSAN and NUPENG absolved their members from the crime and pointed out that they have consistently raised the alarm over the increasing rate of crude oil theft and pipeline vandalisation and its threat to not just government’s revenue, but also its threat to the environment, investment and national security.

The oil workers pointed out that the volume of oil stolen in Nigeria, which is more than 250,000 barrels/day of crude oil was more than double the total production of Ghana and could destabilise any government.

An oil industry who spoke on the issues weekend declared that that crude oil theft or illegal oil bunkering is a heinous act and national calamity and must be decisively dealt with. He stated the need for the federal government to get to the root of the issue by fishing out the real culprits and bringing them to book.


– Chika Amanze-Nwachuku, This Day

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