Nigeria Crude Oil Theft: The Billion Dollar Gambit

Barges of stolen crude oil

Will this not reinforce failure in the fight against the criminals?

President Goodluck Jonathan recently announced that the federal government has set aside $1 billion for the implementation of a comprehensive programme to curb oil theft and the vandalism of oil and gas infrastructure in the Niger Delta. “Oil theft is an aspect of global terrorism which has become a big industry on its own. It has become a major threat to the Nigerian economy and we need to work with all stakeholders to curb it,” said the president at an event where the vice-president of Shell Upstream International, Mr. Mark Droll, disclosed that the declining rate of crude oil production of Nigeria’s hydrocarbon resources may be as high as 15 to 20 per cent.

While we have no problem with a new resolve to fight what has become a major economic and security challenge for our country, salient questions must still be asked on whether throwing a billion dollar at it is the way to go. For instance, what was wrong with all the previous efforts to contain the haemorrhage? What assurance is there that this is not another case of throwing good money after bad? But perhaps more specifically, of what use is the “Technical Committee on Oil Theft” that has been established, according to the Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe? Do you need a committee to fight what isclearly an organised crime?

As most accounts have indicated, oil theft impinges not only on our economy but also has serious security implications. Indeed, to underscore the gravity of the situation, the Senate recently lent its weight behind those seeking capital punishment for oil thieves if only that would help to redress the problem. According to Senate President David Mark, in the course of discussing the Petroleum Industry Bill (PIB) that is yet to be passed, “the law must have a huge punishment on those that steal our oil to serve as a deterrent. The bill must also ensure that the current rate of oil theft in the country is minimised to the barest minimum. It seems we are having a bad name internationally because of the rate of oil theft in the country. Oil theft deserves capital punishment”.

It is difficult to fault the Senate President on the gravity of a situation in which almost a quarter of Nigeria’s oil revenues is being appropriated daily by some criminal gangs. Yet as we have consistently argued on this page, it is also evident that the problem persists because there is some form of official complicity while the political will to address it is lacking. We recall that the European Parliament once pledged its support for efforts to track sellers of stolen crude by demanding the certificate of origin for their products. According to Mitchell Rivasi, acting President of ACP-EU, “we need to get traceability of oil to avoid theft. The oil companies are involved in this and everybody is making big money. The bunkering tankers are better equipped than the Nigerian Navy. This is a huge international organised crime. We did it with diamond; we can also do it with oil”. 

Since no serious efforts have been made to follow-up on such international commitment, it would appear that the local authorities seem to have given up on any serious attempts to rein in the criminal gangs. Yet there can be no solution until Nigerians themselves resolve to fight the menace.

Just recently, the Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed that the nation has lost over 136 million barrels of crude oil estimated at $10.9 billion through pilfering and sabotage between 2009 and 2011. Against the background that a huge chunk of the proceeds from oil theft are used to buy arms, is establishing another billion dollar technical committee the solution the authorities can come up with?