Friday, June 13, 2014

About Nigeria Oil theft

WHEN the G8 leaders met in Northern Ireland on 17 – 18 June 2013 to discuss tax, trade and transparency, we believed it necessary for them to consider how these issues can serve as the platforms to address the problem of oil theft in the Niger Delta, which in 2008 the G8 leaders meeting in Japan had promised to help President Shehu Yar’adua. Only a global partnership between the International community, the Nigerian Government and Local communities can end oil theft.

To this end they must

*Investigate the global trade in stolen Nigerian crude oil, from the ships used to transport it to the money used to pay for it.

*Engage International experts from different sectors to discuss the development and implementation of technological and other solutions that can be employed in combating oil theft.

*Support the efforts of the Nigerian Government to secure its territorial waters and so prevent the unhindered movement of the vessels used to transport stolen crude.

*Engage the local community to fight this evil.

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. The environmental impact of the trade and associated illegal oil refineries that process it in the creeks of the Niger Delta is devastating. A region already regarded as an environmental tragedy is being further degraded and efforts to rehabilitate the region cannot proceed until this illicit trade is contained.
Global Financial Initiative (GFI) in its study claimed that it aimed to “unpack the opaque”. Oil theft was reaching unprecedented levels by 2013. It was undermining the economy of Nigeria and jeopardising the integrity of the state. This situation demanded the most serious attention of Government and the global community committed to Nigeria’s well being

The most recent study claims that the average artisanal refinery operator consumes 10,000 barrels per day of stolen crude.   The stolen crude taken by vessels to off shore tankers amount to 336000, barrels. Digital Globe, a satellite imaging company, found that there were over 500 refinery sites in Nigeria with a through put of 19,000 – 24,000 barrels per day.

GFI synthesizing all these sources estimate that in 2013 total artesenal oil was between 179, 255 and 214,887 barrels per day. Attitudes to oil theft are hardening among the oil producing communities. The GFI also looked into the question of who owns the oil and attitudes of Niger Deltans to oil ownership.
The local communities, that is people who live in the Niger Delta, or live near an oil well – believe, perhaps erroneously or falsely, that, the oil belongs to them and that it is being stolen by outsiders right under their noses. They believe that they are the “owners” and are oppressed and deprived by “outsiders” because of oil and furthermore that so long as the present situation persists “the owners” that is themselves and their communities, will never be developed, they will never rest or be left alone and “Salvation” will only come after the oil has been exhausted, their farms and fishing villages despoiled beyond redemption.

They also regard the International Oil Companies as Criminals-

“How can a criminal company do something right”? They have come to see oil as a curse, not a blessing; their people are suffering; they have no roads, hospitals, electricity.

Their plan is to stop further exploitation but meanwhile, if only temporarily, must steal as much of their own oil as they could.

“We shall rise up and destroy their facilities.” They cry because the companies and the Government are deceivers, corrupt and not fair. The companies assist the Government to destroy their community through a policy of divide and rule.

Nigeria has over taken all oil producing countries in oil Theft activity – Nigeria loses more than US$10 billion annually to increasingly rapacious oil thieves from an increasingly reluctant administration to stop the theft. There is no end to calls for this trade to stop; Government has taken the matter to the United Nations, to the G8, to the EU – African partnership – but no one seems willing to do anything about it, because, some claim, they detect an apparent lack of political will on the part of the Government. It is true that committees have been set up; US$1 billion has been set aside to fight it. As it is, nothing or little seems to be happening.

Recent studies have produced alarmly frightening statistics. The growth of capacity of oil vessels not in the primary oil sea routes – their numbers are amazingly large.

There are huge discrepancies between what Nigeria says it sells to US and India and what US and India say they import from Nigeria. In 2012 both report more imports than Nigerian records indicate. In the US the discrepancy is 191,000 barrels, India- it is 22, 400 barrels indicating that exports were all either under reported due to deliverance of unregistered tanker or topping up at loading stations.

The availability of satellite imagery of artisanal oil refineries in Nigeria and their spatial distribution; the values attached to this and maps of the clusters of illegal refineries in Niger Delta taken from satellites are all part of the latest study on oil theft.

Together these studies paint a dismal picture that ought to scare Nigeria from slumber to action. There is available now in Nigerian waters, according to satellite imagery, enough vessel capacity to take every drop of oil Nigeria produces daily. What does this say about our security? 2013 was the worst year – US$10 billion; 2014 is predicted to be even worse.

Finally the Niger Delta remains the most polluted geographical area in the world – more oil spills – several times worse than EXXON Valdes and BP’s Gulf spill. Sadly, due to a number of factors – including Government ineptitude, indifference and impotence, also due to unaccountability of the oil operators and outright chicanery of some individuals in the oil producing communities – oil theft and consequential pollution, no clean up will take place, theft will increase and Government will prove to be helpless. Those who hope that Niger Delta will continue to be the golden goose to feed an irresponsible and unresponsive Nigeria are in for a rude shock.

DELE  COLE, a former ambassador,wrote from Lagos.


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