Since the end of the Civil War, oil has become the mainstay of the Nigerian economy. It was expected that oil would boost the nation’s revenues and infrastructure. But, in recent times, the sector seems to have been plagued by myriads of challenges, the biggest of them being steady oil theft.
Recently, the Nigerian government has raised concerns over the rising trend of oil theft in the country in recent times. Recently, the Nigerian National Petroleum Company Limited (NNPCL) said it lost 470,000 bpd of crude oil amounting to $700 million monthly due to oil theft.
In this piece, we shall be looking at some of the 7 things to know about oil theft in Nigeria.
1. Heavy revenue losses
One of the most obvious things about the theft of any kind, oil inclusive, is that it leads to losses. Since the nation’s economy largely depends on oil, crude theft counts as leakage.
According to conservative estimates, oil theft in Nigeria is worth about $10 billion at current market prices. This is the equivalent of N4.3 trillion (at N430 to a dollar). This heavy loss in revenues is about half of Nigeria’s external reserves. This also doubles the country’s total revenue in the first quarter of 2022.
2. Organized syndicates and non-state actors
In most cases, oil theft involves a high degree of sophistication and precision that can only be undertaken by well-funded organized criminal groups or non-state actors. This is why most of the Nigerian government has granted permission to non-state actors to secure petroleum pipelines in several localities.
Only recently, one of the non-state actors with pipeline contracts, High Chief Government Ekpemupolo, threatened to mention the names of persons behind massive oil theft in the Niger Delta region.
3. Culture of violence and environmental degradation
Crude oil theft, like several other illegal extractive activities, fuels violence. This is because; the main perpetrators carry out these acts with impunity. They are often carried out with highly sophisticated weapons, equipment, and machines.
In some cases, these activities lead to environmental degradation and severe health hazards in host communities.
4. Political support
Politicians have been accused of being behind oil theft in Nigeria. Several reports have fingered top Nigerian government officials for their involvement in oil theft and illegal oil bunkering in the country.
The Peoples Democratic Party (PDP) accused the ruling All Progressives Congress (APC) of being behind the organised racket of illegal oil bunkering in the country. The party told President Muhammadu Buhari to “rise to the occasion and take urgent steps to halt the haemorrhaging of our national economy through crude oil theft.”
5. International conspiracy
For the most part, the market for the proceeds from oil theft goes beyond the shores of the country. In other words, there is an international dimension to illicit trade.
Dr. Ade Abolurin, Commandant General of, the Nigerian Security and Civil Defence Corps (NSCDC) said of the oil theft in the Niger Delta that there is an international conspiracy to the practice in Nigeria. According to him, the trade “…has been internationalised, it is no longer local because they have international contacts”.
There are also growing suspicions of the involvement of transnational oil firms operating in the country in the illicit trade.
6. Equipment and logistics
The equipment required for oil theft is quite sophisticated. Also, these are not the equipment that ordinary people can afford. Moving crude productions require delicate handling and will require a handful of logistics details.
As the Country Head, Corporate Relations, Shell Petroleum Development Corporation (SPDC, Igo Weli, had said, underprivileged people could not afford the kind of equipment deployed by oil thieves in unabated oil theft and asset vandalism. According to him, the equipment required “to carry out oil theft are so expensive, poor people cannot afford to set up oil theft and illegal refining businesses. Only those with deep pockets can…”
7. Culpability of security agencies
The security agencies in Nigeria charged with protecting the pipelines have been fingered as collaborators for oil thieves. According to this view, “the apparent involvement of senior politicians and security people is why the government appears unable to stop this enormous theft.”
The NSCDC commandant general once said about the security against oil thieves “We are helpless, handicapped and ill-equipped. Other stakeholders look down on the Corps as if we are not supposed to be there. We arrest trucks but our personnel are imprisoned and beaten. We are suffering in the hands of fellow stakeholders simply because we want to protect the people.”
In 2019, the Rivers state Governor, Nyesom Wike, accused some top military men of being involved and sponsoring oil bunkering in his state. He specifically accused a General Officer Commanding (GOC) who he alerted, had raised a team of soldiers to steal and sell petroleum products in the region. The military continued to deny these claims.