How Nigeria is bleeding from oil theft

Tue, Jun 11, 2024
By editor
9 MIN READ

Opinion

By Prof. Mike Ozekhome, SAN

INTRODUCTION

NIGERIA is naturally blessed and endowed amongst the comity of nations, this is notwithstanding her chequered colonial history, and the fight for nationalism. As the largest black race in Africa, often referred to as – “the big brother”, she is blessed beyond measures, but regrettably – beyond resource control. The presence of crude oil in the Nigerian soil has made it topical issues de – die – in – diem. The clamour for equitable and fair benefits of same, led to economic and security disruption by some indigenous groups in the Niger Delta region.

The region has been the centre of environment encroachment and degradation, inhumane living conditions and zero attention by the government and multi-national companies on concessions. Life in this region is – brutish, nasty, solitary and wicked. Life is almost unbearable by the residents. The lack of democracy, the dividends and concern by government, couple with greedy influential elites, led to rapid and religious oil theft, bunkering and vandalization of oil pipelines in the region. This vista discusses oil theft in Nigeria, where it takes place, how it takes place, who commits this theft, why the theft, and the attendant cost of same to the economic future of the nation.

Nigeria, the giant of Africa, is the second largest oil and gas producer in Africa. Crude oil is majorly produced from the Niger Delta basin in two types: light, and comparatively heavy. The lighter has around 36 gravities while the heavier has 20–25 gravities. Both types are paraffinic and low in Sulphur. Throughout successive years, incomes and revenues generated from the oil and gas sector have accounted largely for supporting the economy and budget of the nation. The income and revenues also account for high level of the entire Gross Domestic Product (GDP). Nigeria is a major exporter of crude oil and petroleum resources to the United States of America. In 2010, Nigeria exported over one million barrels per day to the US, representing 9% of the U.S total crude oil and petroleum products.

HISTORY OF OIL EXPLORATION

Oil exploration originally dates back to 1903, when the Nigerian Bitumen Corporation carried out exploration in the Niger Delta territory. However, the firm’s operations were stopped due World War 1. Later, licences were granted to D’Arcy Exploration Company and Whitehall Petroleum, but same were returned by 1923 due to lack of discovery of oil in commercial quantity. There was an association of Shell D’Arcy Petroleum Development Company of Nigeria, a consortium of Shel and BP – which commenced work 1937. Oil drilling commenced during 1951 in Owerri, and non – commercial quantity was discovered in Akata, near Eket in 1953. 

In a bid to discover oil in commercial quantity, the Oloibiri oilfield was discovered in May, 1956.  The Oloibiri Oilfield is an onshore oilfield located in Oloibiri in Ogbia LGA of Bayelsa State, Nigeria. It is located about 45 miles (72 km) east of Port Harcourt in the Niger Delta. The field is about 13.75 square kilometres (5.31 sq mi) and lies in a swamp within OML 29.

The field was originally operated by Shell D’Arcy, which changed its name to Shell-BP Petroleum Development Company of Nigeria Limited on 30th April, 1956. Currently, the field is operated by Shell Petroleum Development Company of Nigeria Limited (SPDC). Other wells discovered are the Afam and Bomu wells in Ogoni territory.

Towards the end of the 1950s, non-British firms were granted licence to explore for oil: Mobil in 1955Tenneco in 1960, Gulf Oil, (later Chevron in 1961); Agip in 1962; and Elf in 1962. Prior to the discovery of oil, Nigeria (like many other African countries) strongly relied on agricultural exports to supply its economy. The first oil field at Oloibiri began production in 1958.

Now, it would have been naturally expected that, with these resources, Nigerian citizens would cry no more, and worry no more; but the reverse is the case. Government takes almost all the benefits; the citizens are left with nothing; while rich elites illegally smuggle oil out the country.

Having blazed the history, albeit briefly, we shall now embark on the kernel of this discourse, using the guide from the W3HC.

WHERE IS OIL THEFT CARRIED OUT?

Oil theft is actualized at different points of operations, ranging from the creeks, refineries, roads, waters, etc. It majorly takes place in states where oil is being produced. On July 27, 2023Tribuneonline.ng.com reported that the Nigerian National Petroleum Company Limited (NNPCL) has disclosed that Nigeria recorded a total of 240 crude oil theft incidents in one week. It said between the 15th and 21st of July, 2023, the incidents were recorded at various parts of the Niger Delta. In a breakdown, it said out of the total incidents, 69 illegal refineries were discovered and destroyed in Uppata and Abua communities in Rivers State, alone.

Also, it said, 27 cases of pipeline vandalism cases were also recorded and repaired, while 30 wooden boats used to convey stolen crude were confiscated in the past week. Interestingly, 13 automatic identification system infractions were flagged using NNPC’s maritime intelligence system and has been escalated to the Navy through NNPCL’S Incidence Management and Reporting Application; while two illegal vessels were arrested and five cases of oil spills were recorded. Note that 13 of these incidences were recorded in the deep blue water; 41 of these incidences were recorded in the Western Region of the Niger- Delta. 169 recorded in the Central Region; while 17 took place in the Eastern part of the-Niger Delta oil-producing region.

Meanwhile, the NNPCL had earlier in July announced that a private security contractor it engaged (Tantila Ltd) intercepted an 800,000-liter capacity vessel with stolen crude oil. The Vessel, MT TURA II (IMO number6620462), owned by a Nigerian Registered Company, HOLAB MARITIME SERVICES LIMITED with Registration Number RC813311, was said to be heading to Cameroun with the Cargo when it was apprehended. It said preliminary investigations revealed that the crude oil cargo onboard was illegally sourced from a well jacket offshore in Ondo State, Nigeria.

In Delta State, thieves have built their own 4k.m- (2.5 mile) long pipeline through heavily guarded creeks to the Atlantic Ocean. There, barges and vessels are blatantly and professionally loaded with the stolen oil from a 24-foot rig visible from miles on the open waters. 

How do we continue like this?

WHODUNIT?

To succeed in any oil theft, collaboration and firm synergy by species of participants and implementation of their various functions is sacrosanct. The process is situational and complex in nature, depending on the level of the oil theft in question. In large-scale and illegal oil bunkering, corrupt officials in the oil sector allow successful operations of theft. The most appalling fact is that our security agents serve as escort in transporting the stolen crude products. Also, most local citizens in the Niger Delta who are participants in the oil theft trade assist in the illegal refinery of stolen crude oil products and sell them at black markets in local villages.

Speaking during the ministerial briefing by the Presidential Communications team at the State House, Abuja in August, 2022, Melee Kyari fingered “high placed” Nigerians, including the religious/ community leaders and Government officials, as being fully involved in the theft. No names were mentioned. He also disclosed that stolen products were warehoused in churches and mosques with the knowledge of all members of the society, where the incidents occurred, including the clerics.

Prominent Niger Delta leader and former agitator, Mujahid Asari Dokubo, in Abuja, alleged that the bulk cases of oil theft recorded in the oil-rich region are traceable to the Nigerian Army and Navy. 

“The military is at the centre of oil theft and we have to make this very clear to the Nigerian public that 99 per cent of oil theft can be traced to the Nigerian military, the Army and the Navy especially,” Dokubo told State House correspondents after he met Bola Tinubu behind closed doors at the Aso Rock Villa, Abuja. He continued thus: “We’re going to walk with an NPPCL and the IOCs to make sure that oil tapped is brought to zero.”, “The blackmail of the Nigerian state by the Nigerian military is shameful. They said they do not have enough armament and people listen to these false narratives. So this blackmail must end. They have enough resources to fight.”

This is appalling, to say the least. Therefore, we shall examine the following as major accomplices in oil theft (bunkering):

MILITARY AND OTHER SECURITY FORCES

Upon the wake of large-scale production if oil, the presidency of Ibrahim Babangida from 1986 to 1993 and his appointment of officials to supervise the oil producing sectors, the Nigerian military has maintained extensive control over the crude oil trade. The military personnel and Joint-Task Force members that are involved in the illegal oil trade primarily serve as armed escorts for the stolen petroleum products during large-scale operations and gather the intelligence that is necessary for avoiding government probes in the region. Involved in this unholy trade are principally the Navy, supported by the Army, Airforce, Police, Customs, NDLEA, Civil Defence, Militants, Political Elites and Government Officials; Oil Companies; communities; local chiefs and sundry religious leaders.

The Nigerian Navy being charged with security on water, frequently and actively seize vessels containing stolen petroleum products from one destination to another. Regrettably, and Pitiably for this nation, accusations are being made against this security forces for oil theft facilitation. The disappearance of captured vessels and re-appropriated sets of seized products to foreign markets is a nagging problem. Also, security agents also pursue oil bunkering allegations against colleagues as means of absorbing sectors of the oil trade and strengthening individual positions in the regions. The albatross of these is that even these top officials are not being investigated and prosecuted, as they enjoy political immunity from the underdogs. The Buhari administration that promised to fight corruption, failed celebratedly. We are in a mess.

THOUGHT FOR THE WEEK

“A century ago, petroleum – what we call oil – was just an obscure commodity; today it is almost as vital to human existence as water”. (James Buchan).

LAST LINE

God bless my numerous global readers for always keeping faith with the Sunday Sermon on the Mount of the Nigerian Project, by humble me, Prof Mike Ozekhome, SAN, CON, OFR, FCIArb., LL.M, Ph.D, LL.D, D.Litt, D.Sc. kindly, come with me to next week’s exciting dissertation.

A.I

June 11, 2024

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