Tackling oil theft in an era of ‘change’
As the May 29 handover date draws nearer, Nigerians from all walks of life are full of expectations that president-elect General Muhammadu Buhari will effectively curtail oil theft that has become a national embarrassment.
Regrettably, no one knows exactly how much crude oil is stolen in Nigeria every day given that industry audits conducted under the auspices of Nigerian Extractive Industry Transparency Initiative (NEITI) in 2009 suggested that Nigeria did not know how much crude oil it produced daily. This NEITI audit finding was in agreement with the conclusions of the Major-General Emmanuel Abisoye-led Panel of Enquiry into Operations of the Nigerian National Petroleum Corporation (NNPC). Abisoye was appointed by the late General Sani Abacha. The retired general returned a damning verdict: “NNPC stinks and is in dire need of an overhaul.” More significantly, General Abisoye reported that a daily average of about 150.000 barrels of oil was lost by the country through sharp practices at the export terminals between 1991 and 1994. The finding was upheld by a panel headed by Major-General Tajudeen Olanrewaju that was set up to review the report of the Abisoye panel of enquiry.
We recall that Oilprice.com, an online publication estimated last year that Nigeria lost 400,000 barrels of oil per day in 2013 citing figures attributed to Nigeria’s coordinating minister for the economy and finance minister, Ngozi Okonjo-Iweala. The monumental volume of oil stolen on a daily basis is equivalent to a revenue loss of about $1.7 billion a month and $20.4 billion annually. This earned Africa’s largest economy the number one position among countries most plagued by oil theft in the world ahead of Mexico, Iraq, Russia, and Indonesia. The amount lost by Nigeria annually was reported to be more than the country spends on education and healthcare combined,
More recent data attributed to the chief of naval staff last year claimed that daily oil theft in Nigeria was on the decline falling from 2.6millio barrels per month or 84,000 barrels per day in January 2014 to about 900,000 barrels per month or 29,000 barrels per day in June 2014.
Oilprice.com maintained that “The numbers paint a harsh picture about the inability of the Nigerian government, and the multinational oil companies in the Niger Delta, to do anything about this rampant theft.” It also reported Shell’s head of communications in Nigeria, Philip Mshelbila as pointing to a sophisticated organization of people that have been working for years to steal oil from official pipelines.
The outgoing Jonathan Administration repeatedly gave assurances of its commitment to end oil theft with the help of the international community but no visible progress has been made in this regard as the illicit business continues to thrive.
Mohammed Namadi Sambo, Vice President lamented the oil theft menace during a meeting with a top level delegation from the United States Government, led by Sharon Burke, Assistant Secretary of Defence. Sambo described oil theft on that occasion as a gross criminal act against the people and the state, stressing that a huge amount of resources which would have been used for the development of critical infrastructure were being lost to the menace of oil theft in recent years. He assured that with the support and partnership of the United States and other members of the international community the menace would soon be brought to an end.
We also recall that a report by the Global Financial Initiative once points out that “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.”It soon emerged that one group of oil thieves reportedly admittd to profits of nearly $7,000 a day from their illicit activities, yet no workable strategy has been deployed to end the criminal trade.
We urge president-elect Buhari to swing into action after inauguration day by giving meaning to change in tackling the oil theft menace.