/EINPresswire.com/ For a full version of this article, complete with graphical illustration and evidence related sources, download the (.pdf) file by clicking on the link – Nigeria Government and Oil theft
[ Article Extract… ]
Oil theft is an illicit trade that involves the theft of crude oil and its derivative products through a variety of different mechanisms with significant economic, social, environmental, governance and security implications. This criminal act has contributed significantly to the poverty and degradation that exists in the Niger Delta region of Nigeria today. Nearly all of the country’s primary reserves are concentrated in and around the delta of the Niger River, but off-shore rigs are also prominent in the well-endowed coastal region.
The issue of oil theft in the Niger Delta has been a problem for a long time but considered by many as ‘tolerable’ however, today there is a clear recognition from the Nigeria Government that this illegal practice is now having a direct ‘negative impact’ on the entire economy.
According to Minister of Finance and Coordinator of the Economy Dr. Ngozi Okonjo-Iweala, the trade in stolen oil led to a 17 per cent fall in official oil sales in April, 2012 or about 400,000 barrels per day. The Central Bank of Nigeria, CBN Fourth Quarter Economic Report (2012), attributed the decline in crude oil production to floods (natural disaster), oil theft and sabotage to oil infrastructure.
Italian energy major ENI, a joint venture partner of the Federal government reported on the 23 March 2013, it was suspending its activities in Bayelsa in southern Nigeria due to frequent oil thefts from pipelines; the company cited an intensification of bunkering activities and sabotage of the pipelines as the reason for its action. ENI also revealed the level of theft “had reached levels that were no longer sustainable both from the view point of people safety and the damage caused to the environment by these activities”.
In support of ENI’s claim, the head of Shell’s Nigerian oil unit Mr. Mutiu Sunmonu sounded an alarm indicating Nigeria is in crisis as a result of a “significant upsurge” in oil theft and pipeline vandalism in recent times. He went further to state the theft levels are “unprecedented” as Shell (Nigeria’s biggest International Oil Company) was now losing 60,000 barrels of oil a day as a result, the heaviest losses in three years. Shell is now threatening to shut its Nembe Trunk line pipeline network in Bayelsa State as a consequence of these losses.
The US Energy Information Administration (EIA)’s data on pipeline vandalism in Nigeria between 2002 and 2011, shows the number of reported incidences fell sharply in 2010 during the introduction of the Niger Delta amnesty programme however the number of cases reported in 2011 rose sharply to almost the same levels as 2006; the year most people consider as the peak period of the Niger Delta insurgency.
WHY HAS THERE BEEN A SUDDEN INCREASE IN OIL THEFT ACTIVITIES?
There are so many schools of thoughts, let’s review a few.
•BBC Nigeria correspondent Will Ross says “many politicians are involved with part of the proceeds being used to fund election campaigns and buy votes and the Nigerian army is supposed to stop the thieving but, although some arrests have been made, soldiers routinely take bribes of cash or fuel to turn a blind eye to the crime.” – British Broadcasting Corporation (bbc.co.uk) – 26 Oct, 2012.
•“The Nigerian state and oil companies are losing a billion dollars or more a month to oil theft by criminal networks whose activities have expanded rapidly under the government of President Goodluck Jonathan.” – Financial Times (ft.com) – 26 Jun, 2012.
•Over N5 Trillion ($31 Billion) of government funds have been stolen through fraud, embezzlement and theft since President Goodluck Jonathan assumed office on May 6, 2010 – Nigeria PUNCH 24th March, 2013.
WHO ARE THE STAKEHOLDERS IN NIGERIA’S OIL INDUSTRY
•The Nigerian Federal government
•International Oil Companies (Policy makers at top of chain)
•The people of the Niger Delta region (Communities)
•Oil Workers (field operators)
•Nigeria Security personnel (navy, air force, police…)
•167 million Nigerians
NIGERIA BUDGET VS OIL THEFT
According to the International Energy Agency (IEA), it is estimated Nigeria losses N1.1 Trillion Naira yearly to oil theft activities; this loss is just over 20% of the Nigeria’s budget last year (2102), a budget figure of N4,877, 209,156,933 (N4.8 Trillion Naira). If this rise in oil theft is allowed to escalate further, we predict it will undoubtedly affect Nigeria’s oil price predictions for 2013 budget and subsequent national fiscal budgets.
In search of a solution to the oil theft crisis, the Federal government quite recently reached out to countries like the United States and Britain for assistance on the issue. From our view point there are question marks as to the role(s) foreign governments can realistically play in helping the Nigeria government address a problem many perceive to be a “Nigerian Problem” other than provide technical assistance to police Nigeria’s vast border land area.
The problem of oil theft could be half-solved if the government aggressively tackles the issue of poverty among the people in the Niger Delta region. If regeneration takes place in the region, its citizens will have no reason to allow criminal elements to steal the country’s wealth because the Nigerian patriotism factor will kick in.
The political will (or lack of it) of the current Nigerian government will play a major role in addressing (or escalating it even further) the issue of oil theft in the country.
The author of this article, Ken Uwotu is the CEO AAN-Network and the creator of “Freeview News” app for Androids and iPhones (a mobile app that delivers breaking news as it happens from around the world), available in Google Play store and Apple stores worldwide (Free downloads).
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