africa

Return of Nigeria’s crude oil mafia


WITH the Major-General Muhammadu Buhari (retd.) regime giving a broad hint on the removal of petrol subsidy to cut off huge payouts on imports, it is oddly disturbing that the country is paying scant attention to a sharp increase in oil theft. A widespread activity in the Niger Delta, oil pilfering costs the Nigerian economy billions of dollars in revenue annually. Feeling the pinch more than ever, Rivers State Governor, Nyesom Wike, has justifiably laid the issue on the table again for national discourse. Without a doubt, the salient points from the discussions might potentially persuade the Buhari regime to act firmly.

Taking no prisoners, the governor told the Chief of Air Staff, Isiaka Amao, who paid him a courtesy call in Port Harcourt that the security agencies are mainly to blame for oil theft in Nigeria. Since crude theft became rampant in the Delta, there have been unending accusations laid at the doorsteps of the military of aiding and abetting the saboteurs. Over time, this has not reduced. Wike pointedly told Amao, “You know this bunkering cannot stop because everybody is involved. The military is involved, the police are involved, the Nigeria Security and Civil Defence Corps is involved. If not, there is no way illegal bunkering can continue.” That is blunt.

Wike’s accusation is weighty, and he is right to feel aggrieved. Although the Buhari regime is on binge borrowing, it is neglecting key areas of income generation. In July, top regime officials stated that Nigeria lost 400,000 crude oil barrels daily. That is 25.81 per cent of Nigeria’s current production quota of 1.55 million bpd from the Organisation of Petroleum Exporting Countries. This widespread sabotage is nearly almost impossible if the security agents posted to man the oil assets are living up to their mandate.

Consequently, the latest data from the Nigerian National Petroleum Corporation stated that the economy lost N12.87 billion to oil theft and pipeline vandalism in the seven months to September, excluding January and August. Within the same period, 261 pipeline points were vandalised.

A 2013 estimate by British think-tank, Chatham House, put crude theft in Nigeria at £1 billion a month. In a year, that would be a chunk of the country’s N16.4 trillion budget outlay for 2022. Other estimates of oil theft are quite astonishing. The Nigerian Extractive Industries and Transparency Initiative reckoned Nigeria lost $42 billion to this cankerworm between 2009 and 2018. If this is recovered, it is nearly half of the current national debt profile of $86.57 billion.

This makes Nigeria the most notorious place on earth for crude oil theft, said Mohammed Abubakar, the immediate past Minister of Environment. In a lamentation, he juxtaposed that with Mexico that records between 5,000 and 10,000bpd theft to place a distant second. Seventy-five per cent of the stolen crude is exported through collaborators to European refineries; 25 per cent is refined in the slew of local illegal artisanal refineries, says the NGO, Stakeholders Democratic Network. In its report, the Nigeria Natural Resources Charter estimated that Nigeria lost N4.75 trillion to oil theft between 2015 and 2018.

Besides crude larceny, Nigeria suffers from wanton oil pipeline vandalism and spillage by oil prospecting companies. Between January 2019 and September 2020, 1,161 pipeline points nationwide were vandalised, Lai Mohammed, the Minister of Information and Culture, said. He put the loss at N60 billion yearly. A veritable cause is ageing, poorly maintained pipelines, rendering the Niger Delta notorious for oil spillage. This has decimated fishing and farming. Militants also blow up oil assets, further polluting the ecology. A 2017 report said it would cost $50 billion to clean up the Delta environment of pollution and degradation of its ecosystem.

Nigeria’s oil pipelines in the Niger Delta are part of the assets where the world’s 12th largest crude producer made $27.73 billion in 2020 (per OPEC data). Ordinarily, the country should do everything in its power to protect its main source of foreign exchange earnings.

Gangsters who have become entrenched in the oil industry should be rooted out. The first point of call is the military joint task force. This time, the military high command should not sweep Wike’s incriminating charges against the JTF troops under the carpet. They should be thoroughly investigated, and the command-and-control process overhauled completely. In the past, the JTF busted some illegal operations in the Delta, but not much has been done about prosecution. Government should consider the establishment of special courts to try the offenders and quicken the pace of prosecution. The Economic and Financial Crimes Commission should seize the ill-gotten assets of those found culpable after prosecution.

In a modern world, technology is increasingly taking a vantage position. To protect its 1.98 million km in natural gas transport and 240,711 km in petroleum products – the most globally — the United States deploys gadgets such as digital sensors, infrared cameras, and drones to monitor security and check for leaks, says FracTracker Alliance, a Pennsylvania-based industry non-profit. In addition, federal protection of these pipelines is undertaken by the Office of Pipeline Safety, within the Department of Transportation, and the Transportation Security Administration, within the Department of Homeland Security to identify and protect the pipeline assets through security reviews, risk assessment and inspections. Therefore, a review should empower the JTF, the police and the NSCDC that is primarily tasked with the protection of pipelines, to embark on a new era of protection of oil assets with a mix of technology, monitoring and interdiction of oil asset saboteurs. There is an urgent need to set up a hotline for the public to report fuel robbery.

These thefts expose Nigeria’s wider corrupt system and tenuous security architecture. The thinly stretched and underfunded security agencies are locked down fighting terrorism and kidnapping. In the long run, the President should take cognisance of the colossal losses, implementing comprehensive oversight of the security agencies tasked with oil assets protection.

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