Nigeria: The Problem of Large Oil Theft


As damning as a current report that Nigeria might have misplaced about 200 million barrels to organised theft within the first 11 months of 2021 would appear, it got here as no shock.

Going by figures from the Nigerian Upstream Regulatory Petroleum Fee (NURPC) obtained by THISDAY, whereas Nigeria was anticipated to pump roughly 635 million barrels of oil by final November, solely 441 million barrels had been produced throughout the interval. This aligns with a report from the Nigerian Extractive Industries Transparency Initiative (NEITI) launched earlier final yr that Nigeria loses 138,400 barrels of crude per day (about 7% of its whole manufacturing) to theft, oil spills, or shortage-in manufacturing. The loss, based on the report, is “neither hypothetical nor episodic. It’s actual and endemic.”

It’s unlucky that oil theft has for many years remained an enormous drain on the financial system of Nigeria with out concerted efforts to take care of the issue. Little doubt, these unlawful funds from stealing the crude may have been channelled to different sectors of the financial system. Moreover, as a result of the legal cartels concerned want illicit arms and ammunition, they’ve contributed considerably to our nationwide safety problem. Sadly, the political will to implement actions and measures that might or may curb these nefarious acts that profit only some is sorely missing. In truth, many safety operatives foyer to be posted to Niger Delta due to what they are going to profit from unlawful oil enterprise.

The obvious lack of transparency in Nigeria’s oil sector is mirrored in the truth that authorities depends closely on operators to supply knowledge with none unbiased verification. In a report on the mismanagement of the oil and fuel sector in Nigeria in 2016, for example, The London Economist wrote: “… oil can be being stolen at a file fee and merchants’ figures present output at effectively beneath the federal government’s figures. Details about Africa’s largest oil trade is an opaque myriad of numbers. Nobody is aware of which of them are correct; nobody is aware of how a lot oil Nigeria produces. If there have been an authoritative determine, the actually horrifying scope of corruption could be uncovered.”

There isn’t a scarcity of legal guidelines to take care of the issue assuming the federal authorities is severe. A number of the numerous legal guidelines which have been handed embody a 1975 act sanctioning the demise penalty for pipeline sabotage, though wants modification to incorporate traces carrying crude and never solely merchandise. However the federal authorities appears helpless regardless of the massive sum of cash being thrown on the drawback. Among the many methods urged by NEITI was calling for the Division of Petroleum Sources (DPR) to place molecular markers into merchandise. This might permit the authorities to hint the place such provides go. Extra drastic measures ought to embody that authorities official concerned in oil stealing be made to forfeit all advantages to them, whether or not in or out of service.

In August 2019, the Nigerian Nationwide Petroleum Company (NNPC) reported shedding as a lot as 22 million barrels of oil at greater than 120,000 barrels per day (BPD) to theft within the first half of the earlier yr. Regardless of that disclosure, Nigerian authorities seem helpless in coping with the issue. But, at a really tough interval in a rustic nearly wholly depending on oil income, we can’t afford the luxurious of permitting a number of folks to illegally nook to themselves our collective wealth. This menace persists within the oil and fuel sector due to the existence of an assured off-taker market.

There may be an pressing want to deal with this problem if Nigeria is to derive the utmost profit from its oil and fuel assets. The federal authorities should be certain that the perpetrators of this crime are apprehended and delivered to justice.

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