DURING his recent visit to the United States President Muhammadu Buhari said that his government was examining pieces of evidences that would lead to the arrest and prosecution of some government officials for stealing Nigeria’s crude oil.
President Buhari said this at the Nigerian Embassy in Washington while answering questions at a session with Nigerians in the Diaspora. He said that it will take at least 18 months to revive the economy.
The President lamented that “corruption in Nigeria has virtually developed into a culture where honest people are abused” He lamented that some of the affected officials were involved in illegal sales and diversion of crude oil monies belonging to the Federal Government to multiple private accounts abroad.
According to him, “250, 9000 barrels per day of Nigerian crude are being stolen and people sell and put the money into individual accounts, “adding that the United States and other developing countries are helping us to trace such accounts now. We will ask that such accounts be frozen and prosecute the persons, and let the accounts be taken to Nigeria.”
“We are now looking for evidences of shipping some of our crude, their destination and where they were paid and in which country. The amount of money involved is mind – bogging but we have started getting document where some former ministers were selling about one million barrels per day on their own.
We will negotiate such money and use the documents to prosecute them. A lot of damage has been done to the integrity of Nigeria with individuals and institutions already compromised.
The President frowned at the way and manner the Nigerian National Petroleum Corporation was mismanaged, saying this administration would check the excesses of the Corporation. President Buhari said unlike what obtained during his tenure as Federal Commissioner for Petroleum under military regime when the NNPC had only two traceable accounts before paying oil proceeds into the Central Bank of Nigeria (CBN), “now everybody is doing anyhow”.
OIL theft has cost Nigeria, Africa’s biggest economy as much as &10 billion a year.
Oil traders and members of local communities, all profit from “bunkering” of oil.
The trade in stolen oil has helped other transnational criminal networks to spread across the gulf of Guinea, creating global link, between oil thieves, pirates and traffickers in arms and drugs.
The damages caused by these oil murky also often forces oil companies to shut pipeline down.
As a result, Nigeria is producing oil below its capacity. In September 23, 2012 Shell who was also a victim had to close its trans-Niger pipeline, which should carry 150,000 barrels daily because of leaks due to theft, less than a week after it has been re-opened.
Profits are laundered abroad in financial hubs, including New York, London, Geneva and Singapore. Money is smuggled in cash via middlemen and deposited in companies and tax havens. Bank officials are bribed. Cash is laundered through legitimate businesses. Some of the proceeds and stolen oil – end up in the Balkans, Brazil, China, Indonesia, Singapore, United States and other parts of the world.
At the smallest scale, telltale plumes of smoking rise from illegal refineries in the Niger Delta’s labyrinthine creeks. But large-scale bunkering involves siphoning oil from pipeline on lands or under water and loading into small barges, from which it is transferred to bigger ships who may be unaware it is stolen.
However this act has been practised for so long and has great implications for the economy.
The crude oil theft is a crime against the economy. It is so sad to note that crude oil theft has drastically affected the daily crude production from about 2.7 mbpd to 2.4mbpd for instance, Shell Petroleum Development Company alone is said to be losing about 60,000bpd in the Number Creek Trunk line that runs from Numbe in Bayelsa through Niger Delta region to Bonny Island in Rivers State.
Also crude oil theft has negatively affected Nigeria’s internal revenue and foreign reserve, that is Excess Crude Account (ECA).
The country has recorded revenue shortfall due to the constant attack on the pipelines which is regarded as the economic arteries and livewires of the nation’s economy.
According to Allison Madueke former oil minister $12bn was lost to oil thieves and $5bn was spent in one year on pipeline repairs caused by oil thieves that such amount would have been used to address the issues of infrastructural development challenges affecting the growth of the economy.
According to environmental experts, crude oil theft has caused oil spillage especially the Niger Delta region, sadly the spillage is ravaging our environment and has become one of the greatest threats to the country’s ecosystem.
Oil spillage has reduced the evergreen mangrove forest to mere grasses while fish and other aquatic animals in the water are at the verge of extinction. More than 75 percent of oil spilled from SPDC facilities in the Niger Delta in five years were caused by crude theft and illegal refining which has resulted in consistent pollution of farm lands and rivers.
The war against crude oil theft is no longer a war against the poor people of Niger Delta but a war against “the big fishes” and powerful Nigerians with political connections which requires multidimensional approach.
However, for Nigeria to actualize its developmental objectives and achieve its vision 2020, crude oil theft should be tackled head on by increasing public enlightenment on the consequences of the illicit trade.
Preferred solution to oil theft
According to industry player, Mutiu Sunmonu, government should seek means of making access to oil pipelines extremely difficult to oil thieves adding the SPDC, has recently resorted to burying its pipeline at 13.5ft into the ground as a means of making it hard to vandals to access.
Government should explore the possibility of tracking the oil stolen from Nigeria through finger – printing to identify its origin.
Also, Nigeria satellite technology should be improved to show alls the ships in Nigeria’s offshore coaster water.
Government should review all relevant laws, replacing it with stiffer punishments for oil thieves to serve as a deterrent to those that have the ambition of joining the illegal trade.
The Joint Military Task Force (JTF) and other security agencies have a great part to play in the illegal trade, they should be recognized to enable it meet the challenges and expose the sponsors of oil thieves along with their international collaborators.
Federal Government agencies such as Department of Petroleum Resources (DPR) Petroleum Equalization Fund (PEF) should work out a model to tackle oil and gas export clearance permit to avoid loading more than the quality purchased.
Further more Federal Government should seek for international assistance from foreign countries where oil stolen from Nigeria is sold. Because these patronizers are not located in West Africa but end up overseas.
Nigeria is the third highest producers of crude, and has the fifth largest gas reserve. However, with the increase in the rate of oil theft in the country, it causes an impediment in the growth of the nation’s economy.
Oil theft, also known as oil bunkering still remains an issue in the Nigerian oil industry. A significant element of oil theft relies on the damage to oil pipelines which results in intermittent supply of oil.
There are two methods of oil theft – small scale oil bunkering and large scale illegal oil bunkering. Small scale illegal oil bunkering is an activity undertaken by mostly indigenous groups and opportunistic local residents who tap into oil pipelines for the crude refining and sale of the condensates for domestic consumption. Whereas large scale illegal bunkering involves the use of more refined equipments like long range tapping pipes, motorboats, oil tankers to steal oil.
Although so many people put the issue of poverty as a reason fro involving in oil theft, however little do they know that they are at risk as there could be an outburst of fire during the process of stealing the raw crude.
Reduction in oil revenues
Without oil revenues, the Nigerian economy will be brought to its knees as it accounts for over 70% of Nigeria’s export earnings. This is the reason the presidency is already tense about the situation throwing accusations in all corners.
Factually, inaccurate data has made it difficult for researchers to evaluate the extent at which the damage to oil infrastructure affects the balance sheets of oil companies operating in the country. Without being over-reliant on statistical figures, it is reasonable to suggest that oil theft will be a major threat to their profitability as oil supply is affected and damaged pipelines cost money, time, and resources to fix. The long term effect of this might be the continued declaration of force majeure and selling of exploration and production assets as we have noticed for a few years now. For example, recently, Shell Nigeria had to shut down its 150,000bld trans-Niger pipeline because of damage due to theft. This trend is not encouraging for the Nigerian economy in terms of foreign investment as it is currently ranked 131 out of 185 economies in the “ease of doing business” report compiled by the World Bank.
Oil theft affects the general economy of the country as it leads to a reduction in the revenue got from the exportation of raw crude.
Environmental Damage and Economic Hardship
Overtime, we hear of the issue of oil spillage, and the government looking for ways to curb this menace. Oil theft leads to oil spillage as those engaged in oil theft do so illegally, and in the process may lead to a spill of the oil.
Furthermore, the resultant of oil spillage leads to making the environment in conducive for residents, making farming and fishing impossible, as the land becomes infertile as a result of the oil spillage.
After decades of dealing with oil spillage, and gas flaring, deliberate attacks on oil pipelines leading to further spillage will continue to damage the local oil producing communities. According to a report by the United Nations Environment Programme (UNEP), the extent of damage done by oil spillage in the Niger Delta is underestimated. They found at least 10 communities in Ogoni land where drinking water is contaminated with high levels of hydro carbons thereby posing a significant threat to public health. The fisheries sector is also said to have been seriously hit by constant spillage leading to further economic hardship for local indigenes.
There are grounds to suggest that small scale pilfering for example has a causal relationship with different kinds of poverty. When you consider the percentage of people living below 1 dollar per day in the country, it gives an indication on what locals will be willing to do particularly when the proximity of this source is to their advantage.
Crude oil is one of the mainstay of the nation’s economy and continual stealing of this oil has an adverse effect on the economy of the nation, as well as on citizens of the country.
Oil theft is touted to be one of the biggest problems the government of Nigeria is currently struggling to tackle. However, those engaging in it should know that they are making life unbearable for themselves, family members, and the entire community where they reside, as most people living in that community rely on farming, fishing, and other menial jobs as their source of living and this therefore means that you are ripping people off their means of livelihood.
However, there is always an unscramble to every puzzle, an answer to every question and the issue of oil theft is certainly not different. Government at all levels should step up measures at ensuring that there is a stop to oil theft in the country. Relevant agencies who are responsible for fishing out these oil bunkers should execute their duties without fear or favour.
In addition, those in the rural areas where such occur should be properly enlightened and educated on this issue, so that they can report to the police or any other security agent whenever anyone tries to steal oil through any means.
Furthermore, the issue of oil theft should be brought to the front burner by the media. People should know what it is all about, and the negative effect it has on citizens, and relevant contact should be made available so that they can easily be able to reach the relevant bodies to report any issue of oil theft in their community
An end to oil theft in the country is a collective responsibility of you and I, together, this issue can become a thing of the past.
Hence, we need to be upright, vigilant and report any case or up rise of oil theft in our community.
