#TrackNigeria: Oil bunkering or theft is a very serious act of economic sabotage and crime, which has very deep roots and long history in Nigeria. Bunkering has gradually but steadily undermined various efforts to reorganize the national economy and put Nigeria’s political economy on a sound footing. The truth about this unfortunate sorry pass is that, local economic criminals have teamed up international collaborators to constantly steal Nigeria’s oil, thereby making ungodly gains. Hence, what should have otherwise been used to develop the commonwealth of the Nigerian state, has been cornered and diverted into private pockets of greedy, highly connected; very influential, extremely dangerous and wealthy individuals.
Nigeria and Nigerians have suffered immeasurably in the hands of these crooked economic saboteurs and they not see anything wrong with their endeavor, for them, it is just a means of livelihood, regardless of the fact that, it is illegitimate; it is immoral, it is scandalous but in their thinking, it is a survivalist strategy, in which only the fittest of the fittest survives, and all is fair in their business practices, as they continue to exploit the loopholes in the country’s security architecture as well as leakages in the oil and gas industry. The conspirators have devised several unorthodox means of getting cheap and unearned monies at immense loss to the country. All efforts to put these devious practices in check over the years have proved abortive; the cartels involved are very sophisticated and ruthless; they spare no efforts to achieve their dastardly and sinister objectives. It is imperative to underscore the fact that, hot-tapping and cold-tapping are extremely sophisticated methods of oil theft and are primarily used in large-scale operations during the crude oil stage. Terminal and vehicle transportation theft involves the re-appropriation of both crude and refined oil products from storage facilities during the process of export transportation.
It is for these reasons that the Edo State Governor Godwin Obaseki said the nation lost about 22 million barrels of its crude oil production to oil theft between January and June 2019. Obaseki disclosed this in a statement issued by Mr Ndu Ughamadu, the Spokesman for the Nigerian National Petroleum Corporation (NNPC) in Abuja recently. He said that if nothing was done to curtail the ugly trend, the figure could double by the end of the year. The governor, also the Chairman of the Ad-hoc Committee of the National Economic Council on Crude Oil Theft spoke at a stakeholders meeting held at the NNPC towers. He said the menace of oil theft and pipeline vandalism was beginning to pose a threat to the national economy. The governor called on stakeholders to join forces and work toward eradicating the menace of crude oil theft that was currently on upward swing in the country. It would be recalled that the NNPC Monthly Financial and Operations Report (MFOR) for June revealed a staggering 77 per cent rise in cases of oil pipeline vandalism across its network of pipeline infrastructure.
According to the report, 106 pipeline points are breached, representing an alarming increase from the 60 points vandalized in May 2019. The meeting had in attendance the group Managing Director of NNPC, Malam Mele Kyari, and representatives of the governors of Delta, Bayelsa, Ondo, Cross River, Akwa Ibom and Rivers. Also in attendance were representatives of the Police, Navy, Army, Civil Defence and the International Oil Companies (IOCs) and some indigenous operators.
Also, the renewed violence has also impacted maritime security in the Gulf of Guinea GoG. Pirate attacks emanating from the Niger Delta remain a major threat to the oil industry in Nigeria and merchant shipping in the GoG. An estimated 70 percent of all piracy-related incidents in the GoG are directly related to Nigerian criminal gangs, mostly originating from the Niger Delta. In the first quarter of 2016, at least 12 attacks were recorded in the Gulf of Guinea, including nine in Nigeria, one in Côte d’Ivoire, and two within the territorial waters of the DR Congo. Should the cycle of violence escalate, it is likely that the Niger Delta Avengers- NDA and other similar groups could increase attacks on vessels and offshore facilities. Consequently, the interests of foreign investors will be further compromised as their facilities come under destructive attack, their staff threatened, and safe navigation in the GoG undermined by militant pirates.
The Niger Delta is one of the world’s most important wetland and coastal marine ecosystems and is home to some 30 million people. Due to its rich natural resource base, environmental exploitation is rife and pollution affects the people in unprecedented ways. Oil has been extracted in the Niger Delta by the national and multinational oil companies since 1958. Oil pollution caused by oil spills and gas flaring by the oil industry devastates farmland, rivers, villages and the air. Oil pollution kills fish and their food sources; it damages agricultural land causing soil infertility and negatively impacts agricultural productivity. The government fails to formulate and effectuate proper environmental and compensation regulations. The failure of the oil companies, including Shell, Eni, Chevron, Total and ExxonMobil, to swiftly deal with oil spills exacerbates these problems as do spills resulting from oil bunkering.
As a direct consequence of the pollution, the people of the Niger Delta are facing impoverishment, loss of livelihoods through poisoned land and fishing waters, high rates of respiratory disease and illness, disenfranchisement and despair. Proper governmental policies to reinvest state income from oil in the Niger Delta for social and economic development are desultory. The disastrous situation in many parts of the Niger Delta violates people’s rights to health and a healthy environment, the right to an adequate standard of living and the right to earn a living through work. After many years of oil and gas operations in the delta, most of the 30 million people living there remain poor. The rapidly growing population is putting pressure on traditional livelihoods like fishing and agriculture. Only a very few have access to basic services and infrastructure like schools, health clinics, electricity and running water. And, nothing has changed.
In 2014, the Nigerian Navy in Warri, destroyed over 260 illegal refineries and apprehended five persons suspected to be involved in running the refineries. The Naval ship, NNS Delta, was used in destroying the illegal refineries during the eight-hour operation inside Oteghele Phase one and two forest, in Warri South-West Local Government Area of Delta State. Addressing newsmen at the scene of the operation, the former NNS Delta Commanding Officer, Capt. Musa Gemu, said that the operation would be a routine process. According to him, “We destroyed about 260 underground illegal refineries and also burnt over 100,000 metric tons of Automotive Gas Oil (AGO) diesel,” adding that, “We also apprehended five suspects; two women and three middle-aged men. The Navy also seized one small generating set, two pumping machines and two boats from the suspects.” Gemu said that the suspects would be handed over to the Economic and Financial Crimes Commission (EFCC), for prosecution.
In a related development, the Nigerian Navy on Thursday, November 13, 2014 burnt down two illegal refineries in Akuku-Toru Local Government Area of Rivers State with Base Operations Officer of the Nigerian Navy Ship Pathfinder, Port Harcourt, Commander Chido Yahaya disclosing that two Cotonou boats loaded with stolen crude oil were also set ablaze. Yahaya availed to newsmen that the destroyed refineries were capable of producing N8 million worth of diesel on a daily basis.
In Yahaya’s words: “We went out on patrol and based on intelligence report; the patrol team was able to discover this illegal crude oil refining sites at Opobo creek close to Abonema town. He explained that, “there are two active illegal crude oil refining sites (which) as at the time the patrol team arrived early this morning, were still working. On this refinery, you have crude oil and the crude oil is being refined to obtain AGO (diesel) and some quantity of kerosene. Based on the sizes of the (refining) tanks, there are about 15, 000 litres of refined AGO that have been produced while the remaining crude oil that they are yet to refine runs into thousands of litres.” He further explained that the decision to destroy the refineries and boats was taken as no arrests were made at the scene of the crime.
Officials of the Nigerian Ports Authority, NPA have been summoned to appear before the Senate to explain how 282 ships disappeared from Nigerian ports between 2010 and 2016.
The summons to the NPA officials who are to also explain the persistence of smuggling and other infractions at the ports came as ex-Speaker Yakubu Dogara at another functioned disclosed that an estimated N7 trillion is lost annually through insecurity and revenue leakages in the waterways. Besides, it was also revealed, that the Nigerian Navy recovered over N420 billion or $1.17 billion of Nigerian crude stolen oil in 2016 alone. That was aside stolen oil worth N6.7 billion or $18.8 million destroyed in various illegal refineries between January and June 2017.
Oil bunkering has continued unabated with serious negative impact on the Nigerian economy. The ex-Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke said that in the last three years (2011-2014), Nigeria has lost between 100, 000 to 400, 000 barrels per day. To this end, there is the need for regional and continental collaboration to this festering economic sabotage, as oil bunkering cost the nation $9 billion monthly. The Nigeria Extractive Industry Transparency Initiative (NEITI) also revealed that over 136 million barrels of crude oil worth $ 10.9 billion were stolen between 2009 and 2011, which represented 7.7 per cent of the total revenue. About 10 million barrels valued at $ 894 million was also lost to various nefarious activities including pipeline vandalisation in the first quarter of 2014.
Relatedly, Nigeria loses about $25bn yearly to illegal oil bunkering, piracy and other illegal businesses on Nigerian waters, a former Minister of Transportation, Mr Rotimi Amaechi, has said. Amaechi said perpetrators of illegal oil bunkering in Nigeria could be called the seventh largest oil producers in Africa because of the volume of oil they deal in. The former minister spoke at a reception and book launch held in his honour by a group from the Nigerian Maritime Administration and Safety Agency, Nigerian Shippers’ Council, the Nigerian Ports Authority and other stakeholders in the Nigerian maritime industry. He said, “Illegal economy in the (Nigerian) waters is about $25bn. The Americans spoke to me; they said Nigerian illegal bunkering merchants are the seventh largest producers of oil in Africa.
These figures are at best conservative estimates. The figures bandied around are just a tip of the iceberg. It is an established fact that Nigeria does not know for sure the exact amount of barrels of oil it produces per day, it does not know the exact barrels of oil it imports into the country from various parts of the globe, it does not know the exact amount that goes into the Federation Account, hence it is difficult to know the exact amount being stolen under different guises. In fact, the exact figure of oil it imports has constantly been a subject of controversy. The recent sharp drop in global oil prices has only compounded an already bad situation. With an estimated 400,000 barrels of crude oil lost to oil theft daily, the price volatility in crude futures underlines the dangers confronting the nation’s finances, which is already feeling the shockwaves including devaluation of the naira, adjustments to the budgets and the looming spectre of a moratorium on new government projects.
Furthermore, the African Development Bank Group had in its African Economic Outlook 2014 listed oil theft as one of the factors responsible for the drop in oil revenue in Nigeria. The report, which covers 54 African countries, presents the current state of economic and social development as well as prospects for countries in the continent. According to the report, Nigeria had been battling with serious disruptions in oil production and lifting operations occasioned by multiple leaks, pipeline vandalism and oil theft. According to reports, Nigeria is ranked worse than Mexico, Iraq, Russia and Indonesia among the top five countries most plagued by oil theft.
The Federal Government has restated its commitment to encourage both local and foreign investors to key into its plans to grant licence for the establishment of modular refineries, adding that such establishment would end illegal oil bunkering in the oil-rich Niger Delta region. It noted that President Muhammadu Buhari was deeply worried about the activities of illegal bunkerers in the region whose actions were causing huge environmental degradation and pollution thus has decided to encourage most especially local investors to key into the project instead of involving themselves in actions that are detrimental to the general wellbeing of the region. The former Minister of State, Petroleum Resources, Dr. Ibe Kachikwu stated this when he granted an audience to a delegation of America Modular Refinery Investor Missouri American Energy Moham led by former Chairman of the Delta State Oil producing Areas Development Commission, Chief Wellington Okirika at his office in Abuja.
Oil bunkering is very big business for local cabals and their international conspirators. It has been alleged that those involved are very highly placed and strategically located in high places in and out of government, and they fund politics and elections in the country. Hence, they belong to the exclusive class of the untouchables, because if government brings them to book it would amount to class suicide. Government needs to deal decisively with culprits no matter how highly placed or connected. There cannot be two sets of laws in the country, one for the rich and the other for the poor, because equality before the law is a cardinal principle of the rule of law and democratic ethos. This government has said it has zero tolerance for corruption; this is one area that it should really show a zeal for fighting corruption. The President who is also the Commander- in – Chief of the armed forces should read out the riot act to the security agencies and give them a free hand to operate. It is however, gratifying to note that, President Buhari has vowed to fight graft head on and that; there will be no sacred cows.
Nigeria that used to be the 6th largest oil producing country in the world and a key member of OPEC is now placed around 12th with most of the oil used locally in the country externally sourced. It would be recalled that only recently the Federal Government said, it would fight oil theft with $1 billion by putting in place a comprehensive programme to check crude oil and gas infrastructure, including the arrest and prosecution of crude oil thieves. According to the Federal Government, “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. The thieves must be traced, apprehended and prosecuted”.
President Muhammadu Buhari’s administration’s attempt to reduce corruption within the government through the targeting of suspected facilitators of oil theft led to an increase in violence within the country. For example, the creation of the Niger Delta Avengers militant organization occurred after President Buhari prosecuted the leader of a local militia group, Government Ekpemupolo, for his role in the practice of oil theft in the Niger Delta region. Consequently, Ekpemupolo and the Niger Delta Avengers have proceeded to sabotage multinational oil corporation pipelines. In addition to the violence associated with the Niger Delta Avengers, oil spilled from these sabotage operations and the illegal refinery practices committed by the local population have led to the severe pollution of the environment. Given that almost 83 percent of total exports revenue come from the petroleum products revenue in Nigeria, the political and military elite have sought ways to consolidate their control of the oil trade. This monopoly over the oil trade has prompted many local villagers to commit small-scale oil theft and to pursue the illegal refinery of stolen crude oil as means of entering into this unofficial economy.
However, President Buhari is fully aware of the nefarious activities of oil thefts as well as its deleterious multiplier effects on the national economy, to this end, several palliatives were put in place, not only to put paid to oil bunkering but also develop the whole of the Niger Delta region. Some of the efforts so far by the presence administration include
•The Federal Government is perfecting plans to supply crude oil directly to illegal refiners in the Niger Delta as part of President Muhammadu Buhari’s New Vision for oil-producing communities in the Niger Delta. It was learnt that an idea is also now being worked out to explore how some of the illegal refiners and the local communities in the region can become shareholders in the proposed Modular refineries concept of the Federal Government. The Presidency explained that a modular refinery is a refinery made up of smaller and mobile parts- (skid-mounted) – that are more easily fabricated and can be more quickly transported to site. They come in different sizes with varying capacities normally lower capacity than conventional refineries with more elaborate and complication set-up. Instead of doing the small illegal refineries, government wants to help us with the technology to do this bigger so that we will be involved in refining in such a way that the environment will not be destroyed.
•The federal government is working towards the establishment of a Niger Delta Development Bank to speed up the development of the region.
•The NDDC was set up by the federal government to address the problem of underdevelopment of the Niger Delta region. In addition to developing the physical infrastructure of the region, the NDDC will develop the human capital in the region. One of the key areas of the development is the young people. The NDDC has been mandated by the federal government to work out the framework with the Federal Ministry of Petroleum Resources, so that youths of communities in the Niger Delta will be empowered through the establishment of modular refineries.
•The establishment of Maritime University in the Niger Delta region
•Increased revenue to the Niger Delta Ministry as well as NDDC
•The president approved the Ogoni clean-up and environmental remediation
•Presidential approval of maximum security surveillance and protection of oil and gas infrastructure; and approval of increased military presence in the Niger Delta
•The President is committed to the completion of critical regional infrastructure
•Maintenance and sustenance of the presidential amnesty programme
According to President Buhari, represented by the Vice President, Professor Yemi Osinbanjo said, “the Niger Delta that you see today, including this kingdom we are now, is an area with poor infrastructures. No schools no hospital and severe pollution. The Niger Delta of today is that of daily pipeline vandalization. In 2014 alone, there were over 3,700 incidents of pipeline vandalisation. From January to June 2016, there were over 1,447 incidents of vandalisation. The Niger Delta of today, aside from environmental degradation, between 1998 and 2016, over 20,000 persons have died from fire incidents arising from breaches of pipelines. Illiteracy is poor, thousands of health challenges especially from environmental degradation. The Niger Delta of today, everywhere you go there are signboards of proposed infrastructural projects, mostly uncompleted and many simply abandoned. Many of the initiatives to change the story have not been able to make those changes. From the Niger Delta Development Board in the 1960s to ONPADEC to NDDC and the amnesty programme, many of these projects have not been able to meet the objectives they were set up to do. My message to you today: it is time to prepare for the future. It is not the future of degradation, poor infrastructure and it is not the future of no roads. It is not the future of harassment and locking up”.
Beyond oil, the federal government has looked at various ways and means of systematically diversifying the mono-cultural base of the Nigerian economy. There are several areas that the government is now looking into which have been neglected over the years, such as agriculture, tourism, gas, aviation, solid minerals, sports just to mention but a very few. Nigeria can ill-afford to be stagnated and an exception in the comity of nations where other countries with lesser abilities, capacities and resources are forging ahead; it is for this reason that President Buhari is determined to change the narrative of incessant oil bunkering and the degradation of the Niger Delta region.
Therefore the pertinent questions some violent and destructive leaders of the zone, who are creating unnecessary tension, should pondered about and ask is, what President Goodluck Jonathan did for the region for all the years he was in power, in terms of fundamentally addressing the diverse environmental issues in the region? They should have asked all the governors that presided over the affairs of the region since 1999 how they expended their annual budgets and 13 per cent derivation fund? They should ask the Niger Delta Development Commission (NDDC) officials since its creation, what they did with all the huge budgetary allocations given to them? They should have asked the traditional rulers and community leaders in the region what they did with monies paid to oil producing communities by oil companies over the years.
Again, when the former governor of Delta state, James Ibori was jailed for massive looting and embezzlement of public funds in the United Kingdom, what did they do? When he was released, he was praised to high heavens, publicly honoured and given a chieftaincy title. When the late governor of Balyelsa State, Diepreye Alamieyeseigha was discovered to have misappropriated state funds and even disguised like a woman to escape from the long hands of the law, what did they do? They supported him to go to the senate before death aborted his plan. When the former governor of Edo State, Lucky Igbinedion did plea bargaining to escape jail term for glaring case of looting and corruption, what did they do? When the former governor of Rivers State, Peter Odili went to court to seek a court injunction to perpetually halt any prosecution against his alleged acts of looting, corruption and misappropriation of public funds, what did they do? These are just a tip of the iceberg as the list is seemingly endless, even the former minister for Niger Delta ministry, Elder Peter Godsday Orubebe is presently facing corruption charges from EFCC, so what happened to all the funds that were allocated to the Niger Delta ministry? It is also germane to note that Oil Mineral Producing Areas Development Commission (OMPADEC) before NDDC was liquidated because of fraud by people of south-south origin. Until, the people of the region give serious thoughts to these questions and answer them honestly; genuine development in the area would be nothing but a tantalizing mirage.
Instead of blowing up oil and gas the pipelines, and destroying strategic economic interests of the Nigerian state, as well as engaging in oil theft, they ought to cooperate with the government of Nigeria under the leadership of PMB to fish out culprits that looted the funds meant for the growth and development of the south-south region, so that, such people can refund stolen funds which they have used to corruptly enriched themselves and their families, such funds would be methodically deployed to areas that will add far-reaching values to the lives and wellbeing of the people of the area. To all intents and purposes, the people of Niger Delta extraction should know and identify those fomenting trouble, fanning the embers of disintegration as well as ethnic discord and animosity. There is no doubt that, they are doing the bidding of some grumpy politicians who are desperate to continue to do what they are used to, using states funds and resources to feather their rapacious nests and gormandizing their insatiable appetites, as they get richer, the vast majority of the people of the region gets poorer. Hence, the PMB led government acted fast and deal decisively with the new waves of violence in area; and restore peace and order to the south-south, for proper economic activities in the overriding interest of the Nigerian state.