Good Company

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Monday, May 14, 2007

Oil theft in Nigeria: A $15 Billion Problem and worse?

What makes oil and even oil tankers disappear in Nigeria? There are pirate-like groups kidnapping oil workers, but there is also a lot- by which I mean- a whole bunch- of corruption going on, as set out in Oil theft: Experts advocate chemical tag on legal oil:
Experts, who spoke to Business Day on condition of anonymity, wondered why the government was yet to implement the proposal which could discourage refiners from buying illegal crude.

They maintained that stopping oil theft would require the same effort employed in stopping trade in contraband, adding that a total crackdown on both the buyers and sellers remained the best option.

They decried the increasing cases of crude oil theft in the country, barely two years after the disappearance of the MT African Pride, an oil-smuggling ship that vanished, while in the custody of the Nigerian Navy.
The smugglers tap into the pipelines and pumping stations across the country, using sophisticated equipment, the stolen crude oil is then pumped directly from pipelines through hoses onto barges.

Some of these barges, according industry sources could hold as much as 5,000 barrels each.

The oil could also be pumped into containers on smaller boats, and then transferred at sea to larger ships, such as the African Pride, which was cut by eagle-eyed naval personnel on routine patrol.

Business Day gathered that much of the crude sold to refineries in Ivory Coast, Cameroon and other nearby countries, were mostly stolen products.

Some oil company workers have been found to be involved in this crude theft in the country.

The Shell study said that "endemic corruption" among the nation’s police, political class and the military is aiding the oil thieves.
Experts say that the large volume of stolen crude suggests that the entire tankers may be loaded at export terminals in a normal fashion, and later, records of the transactions will simply disappear.

This shows that those involved in bunkering are very highly placed people. Residents of the Niger-Delta region defend oil theft to take what is rightfully theirs.

The militants and other criminal gangs operating in the area fund their activities through bunkering and sometimes trade oil for weapons.

Security experts allege that proceeds from the illegal crude may also be financing rebellions and terrorist activities in West Africa and elsewhere.

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