Leadership (Abuja)

10 July 2014

Nigeria Tops Countries Most Plagued By Oil Theft - Report

Photo: Premium Times
A man carries oil canisters at an illegal refinery site in Nigeria's oil state of Bayelsa (file photo).

With the theft of an estimated 400,000 barrels of oil per day, equating to a revenue loss of about $1.7 billion a month and $20.4 billion annually, Nigeria currently tops the list of countries most plagued by oil theft in the world.

Following Nigeria on the top five list of countries most plagued by oil theft according to a report by oilprice.com are Mexico, Iraq, Russia, and Indonesia.

The amount lost by Nigeria annually represents 7.7 per cent of the nation's GDP vanishing, or more than the country spends on education and healthcare combined, the report by oilprice.com noted.

The report maintained that "The numbers paint a harsh picture about the inability of the Nigerian government, and the multinational oil companies in the Niger Delta, to do anything about this rampant theft."

It said that Shell's head of communications in Nigeria, Philip Mshelbila, pointed to a sophisticated organization of people that have been working for years to steal oil from official pipelines.

With oil theft hitting record levels in 2013, the G8 has been reminded of its 2000 pledge to help Nigeria solve this crippling problem.

The federal government has repeatedly given assurances of its commitment to end oil theft with the help of the international community, but no visible progress has been made in this regard as the illicit business continued to thrive.

The Global Financial Initiative points out that "stolen Nigerian crude oil is transported on internationally registered vessels, sold to international buyers, processed by international oil refineries and paid for using international bank accounts."

With one group of oil thieves reportedly admitting to profits of nearly $7,000 a day from their illicit activities, yet no workable strategy has been deployed to end the criminal trade.

Meanwhile, closely following Nigeria on this list is Mexico with an estimated theft of between 5,000 and 10,000 barrels of oil per day.

The country's then head of Pemex's Exploration and Production subsidiary, Carlos Morales, last year, admitted that fuel theft was growing 30 per cent annually in Mexico.

The staggering 1,548 per cent jump in the illicit trade from 2000 to 2013 has been attributed to powerful drug cartels like the Zetas realizing the potential of the black gold being pumped through territory they control, fleets of tankers were now being stolen in the country.

For Iraq which came third on this list, it is difficult to estimate how much oil is being smuggled out of the country as its metering system is behind by a number of years.

However, the report noted that there had been substantiated reports of complex networks taking thousands of barrels right from the refineries and selling them illegally to Iran and Syria. In the chaos left over by the Iraq War, smugglers and terrorist elements have reportedly swooped in compounding the situation.

Russia which came fourth on the list has an ambitious target to attain an annual production of 535 million tonnes of oil by 2020 and with over 50,000 kilometres of pipeline, protecting them becomes a huge task.

In 2009 organised criminals stole an estimated 27,000 tonnes of oil from the pipelines. This past April, the country threatened to shut down oil supply to Ukraine, saying that oil worth $63 million dollars had been stolen from its Prikarpat Zapadtrans pipeline system heading to Ukrain.

Also on the top five list is Indonesia whose state of oil smuggling might seem insignificant when compared to Nigeria, at just around 2,000 to 3,000 barrels per day.

However, the government seems to have awoken to the issue after a pipeline explosion in October 2012 killed at least eight people, and injured dozens. The explosion was caused by one of the hundreds of illegal taps on the pipeline networks.

The country's national oil giant PT Pertamina, shut down one of its main pipelines, Tempino-Plaju, in July 2013, reporting losses of 17,500 barrels of oil within the first week of the pipeline's exploration, oilprice.com reported.

Ads by Google

Copyright © 2014 Leadership. 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.

InFocus

Nigeria Tops in Global Oil Theft - Report

A man carries oil canisters at an illegal refinery site in Nigeria's oil state of Bayelsa (file photo).

Nigeria has been listed as the country with the highest incidents of crude oil theft in the world, according to data released by Oilprice.com. Read more »