Exactly six years after Chatham House, an independent policy institute based in London, the United Kingdom, first alerted the world to the systemic theft of Nigerian oil “on an industrial scale”, the country is still haemorrhaging from the deep cut inflicted by massive oil theft. Instead of witnessing a stem-to-stern effort to check the grand larceny, the situation has profoundly worsened. Although the Nigerian National Petroleum Corporation puts what is stolen at 120,000 barrels per day, a new report reveals that an average of 400,000 barrels of crude is purloined on a daily basis.
It is quite mortifying, and perhaps incomprehensible, that a country in the throes of crushing poverty could allow her prized resources to be so brazenly plundered. At her current daily production rate of a little below two million barrels, Nigeria loses one-fifth of her oil revenues to shady characters operating within the labyrinthine creeks of the Niger Delta. This amounts to revenue loss of about $24 million per day with the current oil prices hovering at $60 per barrel. It is indefensible for a country that has been going cap-in-hand to China, seeking loans.
What makes it so nauseating is that the stealing is done with active connivance of security men sent to check the unbridled criminality. According to the 2013 Chatham House report, politicians, military officers, militants, oil industry personnel, oil traders, communities and organised crime groups were involved in the murky business of oil nicking, while the “proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria.” Since then, instead of an improvement, the situation has deteriorated. From the 100,000 bpd that Chatham House raised the alarm about, the quantity has now quadrupled.
The latest report on global oil theft attributed to the Nigerian Natural Resource Charter shows that while Nigeria leads the pack with about 400,000 bpd, Mexico, the next among the chasing pack, loses just between 5,000 and 10,000 bpd. The margin is simply scandalous. To put things into perspective, 400,000 bpd is much more than what some oil producing countries flaunt as their daily production capacity. Ghana, for example, produces less than half of that per day. That country’s Minister of Finance, Ken Ofori-Atta, speaking in Oslo in February, told potential investors, “Overall, crude oil production is expected to increase from 196,089 bpd in 2019 to 420,020 bpd in 2023.” To such a country, every barrel counts.
Although corruption has played a major role in the poverty narrative of the country, this attitude of not harnessing national resources effectively to the benefit of the citizenry can never be discounted in defining Nigeria’s trajectory. While an increasing number of Nigerians has become more impoverished within the past two decades, other oil producing countries have reaped tremendously from the boom brought about by oil. Many of the so-called Third World countries like Qatar and the United Arab Emirates, for instance, have deployed their oil wealth in the upgrade of their infrastructure.
But, in Nigeria, due to unbridled thievery, things continue to get worse. Oil-bearing pipelines that criss-cross the land are indiscriminately destroyed and the content stolen. In the process, spills occur, causing damage to the environment. While some of the stolen crude is sold to the ever-present illegal refineries within the region, much more is laundered for sale abroad. The “Togo Triangle,” is a notorious spot in Togo, reportedly under the cover of the government of that country, where buyers converge to strike deals on stolen Nigerian oil.
Besides, dubious companies lifting crude officially declare much less than what they lift, thus undercutting the country. Most brazenly, massive barges snake their way through the creeks to load stolen oil, which is then transferred to bigger ships on the high seas for onward sale in the international market. Activities of oil thieves have also led to an increase in piracy in Nigerian waters, which along with the West Africa Coast, have become the most dangerous in the world, according to One Earth Future in a June 2019 report.
Yet, as Nigeria continues to fritter away her oil resources and pile up debts for future generations, Norway, also an oil producing country, has been able to save her oil revenues for future generations through her Sovereign Wealth Funds, which, as of last week, stood at a record $1.09 trillion. An Al-Jazeera online report of October 25 says the value of the Government Pension Fund Global corresponds “to more than $200,000 for every man, woman and child in Norway.”
Cleaning up Nigeria’s opaque oil industry requires a complete overhaul of the entire system by enthroning transparency and bringing the criminals to book. The challenge that faces the government includes employing technology to check oil theft. “Stealing of Nigeria’s crude oil can be minimised if we know exactly what we produce… We must have our independent way of assessing what we are producing as it exists in Saudi Arabia, Kuwait, Norway and others who do not have the kind of challenges we have,” Waziri Adio, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, said.
The metering technology has been widely deployed by oil producing countries to keep track of what happens to their oil along the production and supply chain; Nigeria also has to embrace it. Shell Petroleum Development Company’s plan to deploy “state-of-the-art high definition cameras for the monitoring of its facilities” is also in line with putting technology to good use. According to a statement credited to Igo Well, the company’s spokesperson, the cameras will be attached to helicopters that will fly over oil production areas, monitor facilities against vandalism and minimise oil theft.
Even though the former Minister of State for Petroleum Resources, Ibe Kachikwu, had announced in February the introduction of the Automated Tracking System, there should be an effective monitoring to ensure that it is not sabotaged. To stop oil theft, the security agencies should go beyond the usual destruction of illegal refineries; they have to arrest all the prominent people mentioned by Chatham House that are involved in this well-organised criminality.
