28 November 2012

Nigeria: Stop the Unprecedented Crude Oil Thefts

Photo: Daniel Hayduck/IRIN
Crew members leave a tanker in the anchorage. (file photo)


Stealing of Nigeria's crude oil has continued unabated in the Niger delta. Compared to last year, the latest figures show that the country lost more oil-and the revenue derivable from it-so far this year alone than the whole of last year.

They also indicate that Nigeria's oil output, mainstay of the national economy, stands at 2.5 million barrels per day, down from 2.7 million bpd. Figures computed by the International Energy Agency (IEA) from reports of various multinational oil companies operating in the country show that Nigeria, on average, loses 1.12 trillion naira (7 billion dollars) every year to oil thieves, who operate out of creeks and from small boats almost with impunity in the Niger Delta.

Last year, federal government officials expressed deep concern that such activities were hampering the country's budgetary policies because the thieves were making money than was accruing to national coffers. In July, President Goodluck Jonathan, under pressure to respond to this scandalous development, observed that Nigeria was the only oil producing country in the world where crude oil is stolen, and described the situation as 'embarrassing'.

Speaking at the presidential maritime security retreat held in Abuja, Jonathan said that the government had had enough, and would henceforth be decisive in putting a stop to it. So far there is no discernable measure to back the verbal commitment. If anything the oil thieves have only gotten bolder and more audacious.

This mainly maritime problem has other consequences as well, as for instance in the way it threatens the 96 billion naira ($600 million) in Nigeria's yearly fishing exports. These losses, resulting from sabotage principally by militants in the region and illegal sales through back channels, means a significant reduction in revenue for the country.

This is happening in spite of the 5.6 billion naira a year oil pipeline surveillance contract that the federal government awarded to firms that are now managed by erstwhile ex-militants.

It was to cut down on the significant cost of inadequate maritime safety and security to Nigerian society and the economy that the surveillance contract was awarded in the first place. Paradoxically however, instead of abating, crude thefts have escalated.

The surveillance contract has been controversial since its signing became public. With dwindling revenue from oil, and efforts by the government to borrow money from abroad, in addition to complaints over high budget deficit and questions about how to finance it, the government may begin to act by first terminating the Tompolo contract for maritime patrol that has clearly not addressed the issues it was meant to. The Nigerian navy should also do its job rather than get drawn into the organised theft.

This is imperative given that fresh reports are emerging suggesting that oil thefts that have continued almost unchecked in various parts of the Niger delta region have led to shutdown in some operational areas of Shell. It is our view that the level of oil theft is a threat to national security given the centrality of oil earnings to our economic well being. This means that stopping the organised threat to our economy should be dealt with immediately and decisively too.

Obviously, as the recent arrest and questioning of members of COJA, codename for a gang of notorious pirates that specialised in hijacking ocean-going vessels and stealing their crude content showed, prominent government officials and public figures are involved in this criminal activity. The government would not sound serious if it does not act to expose and bring them to justice.

In the meantime, more reliable and industry-oriented firms should be engaged to do the job of maritime surveillance with the specific task of curtailing the financial haemorrhage that the country suffers from these thefts. Criminal activities, like sabotage and crude oil thefts, must be punished; otherwise the problem will persist.

Copyright © 2012 Daily Trust. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.