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NNRC: Why Crude Oil Theft Persists in Nigeria

NNRC: Why Crude Oil Theft Persists in Nigeria

The Nigerian Natural Resource Charter (NNRC) has given reasons why crude oil theft is still a thriving business in the country, several years after the discovery of oil.

According to the NNRC, factors such as government and societal influences have helped to sustain oil theft in Nigeria.
It stated that poor governance of Nigeria’s oil revenue as well as corruption were parts of the incentives supporting the illicit practice with the country’s federal structure also serving as a buoy.

 

According to the NNRC, between 1999 and 2016, oil-producing states received N7.006 trillion as payment under derivation principle but delivered very little development to their communities and people.
“A 2005 World Bank report estimated 80 per cent of Nigeria’s oil and gas revenues accrued to one per cent of its population, 99 per cent of the population received the remaining 20 per cent.

“Emergence of militant groups demanding for resource control and development. Kidnappings, sabotage and illegal bunkering followed. Security contracts to protect pipelines which gave direct access to the pipelines and started to steal oil again.
“Efforts to curtail this new trend was met with threats of further vandalism. (It became) cheaper to pay security fees than to repair,” said the NNRC in a presentation, a copy of which was obtained by THISDAY.

It further alleged that oil companies operating in the country were source of inducement for oil theft, stating that they support the act by making sure that they inadequately implement international best practices which often lead to devastating environmental degradation.

Furthermore, the NNRC which is supported by the United Kingdom to do its works in Nigeria, stated that widespread poverty amongst Nigerians have also made oil theft lucrative.
It explained that high youth unemployment resulting from the socio-economic conditions in the Niger Delta region had led young men to become oil thieves.

“Average annual income of artisanal refinery worker is N3 million. Low-level oil thieves who steal in small jerry cans claim to only partake in the activity because they need to feed their families. They normally scoop from leaking pipes,” it added.
Another source of incentive for oil theft, the NNRC noted was unemployment which it stated was at a rate of 33.1 per cent as of the third quarter (Q3) of 2017 amongst the country’s young population.

“Combined unemployment and underemployment rate for the entire youth labour force (15-35 years) was 52.65 per cent or 22.64 million (10.96 million unemployed and another 11.68 million underemployed). Increasing levels of unemployment are matched by increasing levels of criminal activity in the Niger Delta,” it added.

Further explaining how theft of oil happens in the region, the NNRC said it often involved vandalising infrastructure to divert oil away from its intended destination.
According to it, about 12,714 kilometres (km) of oil and gas pipelines were located in the Niger Delta, adding that between 2003 and 2013, there were a total of 15,685 pipeline breaks caused by vandalism.

“In 2016, Shell reported daily losses of 5,660 bpd. Most siphoned oil are refined locally in firewood. Small ships anchor near pipelines, drill and siphon crude, which is then taken to larger oil tankers on the high sea. Process is repeated multiple times till the tanker is full.

“Multiple siphoning points with hoses up to 2km used, barges can take 3,000 to 18,500 barrels of crude.
“Tankers can take from 31,000 to 62,000 barrels of crude and crude is normally sold on the international market with proceeds used to fund local and regional election campaigns.”