Oil Bunkering in Nigeria

Nigeria – The amount of crude oil reportedly being stolen from the nation’s oil facilities is mind-boggling and calls into question whether there is an effective interventionist authority operating in this country. At a

time when crude oil prices are down to a third of their July 2008 peak and quantities available for export cut by a quarter through thievery, Nigeria is burning her candle at both ends. Add to this the debilitating effects of militancy in the Niger Delta and the over-arching global recession, the inescapable conclusion is that Nigeria has never had it so bad and that the nation is being strangled to death.

illegal oil bunkering in Nigeria

As at the time of the latest report, 680,000 barrels of crude oil are stolen everyday whilst total production hovers around two million barrels a day. It is claimed that those behind this massive theft are serving and retired military Generals and other highly placed Nigerians who unfortunately remain nameless. Officials from Shell, Mobil, Chevron, Total and Agip have consistently warned about the harm that oil thieves are causing Nigeria. The last six months have been particularly destructive as even shut-in wells are no longer safe from attack.

For instance, the Shell Nigeria Exploration and Production Company (SNEPCO) operated Sea Eagle which suspended production three years ago, nevertheless, witnessed routine illegal bunkering in and around its 19 oil wells. In the vicinity of Warri, Port Harcourt and Yenogoa, oil thieves with barges, speed boats and machine guns are said to be enjoying a field day taking crude oil at will with security forces looking on and unable to apprehend them.

All those who spoke on the condition of anonymity said that the government lacks the political will to go after these thieves. Some said that even where arrests were made, the culprits often escaped justice when terse orders from above compelled the release of seized vehicles and crew. The upshot to this development is that security forces when so minded mount feeble attacks that yield little or no dividend.

Of recent, the Joint Task Force, branded Operation Restore Hope, has been reorganised under the leadership of Major-General Sarkin Yaki Bello who has vowed to bring the oil thieves to heel. He has promised as we are wont to hearing that there would be ‘no sacred cows’. To do his job, he has been provided with two new 38-metre Fast Patrol Craft and three new Augusta helicopter gunships. Nigerians are waiting to see whether his tough talk will be matched by commensurate action. Major-General Bello must be aware that all generals are being smeared by illegal bunkering, hence the need for him to clear the deck and separate the wheat from the tares.

illegal oil bunkering in Nigeria

The issue of illegal oil bunkering has been an old chestnut predating the militants of the Niger Delta. We would have expected that the various governments, including state governments in the Niger Delta, would by now have come to grips with the situation. In reality, their failures of omission or commission have on the contrary encouraged illegal bunkering that has ballooned to an obscene degree. The amount of money we are losing to oil thieves can easily fix our decayed infrastructure, build roads and power plants, revive manufacturing, create employment and promote qualitative education.

As far back as 2003 when oil theft was an estimated 200, 000 barrels per day, the Group Shell Managing Director, Mr. Ron Van Den Berg, suggested the introduction of finger printing for Nigeria’s oil as a way to curb illegal bunkering, pointing out that the system he was advocating was already operational in countries losing less oil to thieves than Nigeria. He said that when operational, the new system would enable investigators of suspect oil cargo to trace the source of the consignment and the country of destination. Of recent, a German group has made similar offers to Nigeria. It is not known whether their offer of oil provenance was heeded.

It is a shame that we do not know how much oil we produce as a result of inaccurate calibrations at all 21 export terminals and the nefarious activities of criminal oil syndicates. President Umaru Musa Yar’Adua, exasperated by all this, singularly appointed a foreign company, Messrs Cobalt International Services Limited, as pre-shipment inspectors of crude oil exports with effect from November 1, 2008.

In this role, Cobalt International was to carry out crude oil inspections in addition to the non-oil pre-shipment inspections, which it currently undertakes. The President’s move appears to have taken top officials of NNPC by surprise and they have voiced their opposition to it. Industry watchers however feel that given its antecedents, an objection from top NNPC officials may well be a justifiable reason to support the President as he tries something new. It is not known what has become of the activities of Cobalt International.

The problem facing Nigeria is not a lack of ideas but a lack of the political will to pursue any corrective initiative to its conclusion. There is massive looting of Nigeria’s resources by a small but active band of desperadoes in the past 10 years. We lament the deplorable condition of thieving occurring in both upstream and downstream oil sectors. But other sectors are not faring well either. From the Presidency to the legislature to the political parties to the public and private sectors, the story is the same – malfeasance everywhere. From governors to state governments and local governments, there doesn’t appear to be accountability anywhere. A business run the way this country is being run will no sooner choke from corruption.

The example of illegal oil bunkering is a mere pointer to a general malaise. It is the duty of government to restore law and order by refusing to tolerate disorderly conduct now rampant in Nigeria.

Nigeria Guardian