Oil theft: Report puts 2014 loss at $14bn, recommends community-based prevention approach

A new report estimates that Nigeria lost $14 billion in 2014 alone to oil thieves and vandals.

The report, an analysis into the issue of pipeline vandalism in the Niger Delta, commissioned by the Social Democratic Network (SDN), an international non-governmental organisation, titled, “Building Bridges: Community-Based Approaches to Tackle Pipeline Vandalism,” calls for a community-based approach to tackle the menace.

The study conducted for months by a team led by Allison Timipere Felix identified two major types of oil theft – the industrial level theft and community level theft. The Felix report, which involved thousands of interviews across the oil region, notes that commercial level oil theft attracts financiers, including politicians, top military officers, and business leaders who want power and funds.

The report reveals that the second category involves communities who have control of oil pipelines within their areas and who help themselves out with the crude following through. In all of this, the security agencies expected to fight the menace are said to have joined the business.

The $14 billion was arrived at from direct oil theft, which amounts to almost 40 percent of total loss in 2014. Other subheads of the loss include shut-ins, clean-up cost, repair cost, and deferred oil values.

In a statement released on Wednesday, in Port Harcourt, Rivers State, Florence Kayemba IbokAbasi, SDN’s programme manager, noted that in communities, the feeling of anger and demand for attention motivated vandals to interrupt pipelines at the expense of their environment and livelihoods, with many addicted to easy money from surveillance and clean-up contracts.

Others vandalise to survive in the absence of other employment choices, ignoring the long-term impact to their local environment and health. “The environmental impact is immense with an estimated 51,500 hectares devastated by oil spills in 2014, as a direct consequence of pipeline vandalism.”

SDN said: “We argue for the fundamental need to renew the relationships between government, oil-companies and communities to a more success-based approach, aligning the interests of oil companies and communities, taking examples from National Oil Company approaches to tackle the issue.”

The organisation believes that efforts to reset relationships could lead to new social contract in the Niger Delta. “A sustainable approach to tackle pipeline vandalism will develop local institutions and economies, increase employment and lift many out of poverty while reversing current incentives away from vandalism and towards pipeline and environmental protection. The relationship between communities, oil companies and government has been broken for too long. Now is the time to fix it,” the SDN noted.

The main report suggests several strategies and programmes that could stem the dangerous tide, but admits that the overall attack on oil volumes lost would not be stopped by community-based initiatives because the commercial level oil thieves would need other approaches.

The report devotes large section on the impact of collusion and impunity, saying, “In every community visited, collusion and impunity of state security, particularly the Joint Task Force (JTF), was mentioned as a fundamental issue, why pipeline vandalism continues without punishment.

“One respondent said that the ‘JTF and pipeline vandals are working hand in hand. They encourage the boys to strike because they are making their money from it. They have the boys’ phone numbers and feed them with useful information. Even when their commander is transferred, they leave the phone numbers of the boys in their file for the new commander.’’’

The exposure went on: “Salaries of state security field employees are low, which has encouraged “moonlight” activities to secure extra income. Military personnel were soon co-opted into the business. The lure became irresistible as bribes received in one month could exceed their salaries for six months put together.”

SDN’s report further warns that: “The business of oil-theft is life or death, and dictated by powerful and influential persons seeking personal profit from the vandalism and theft of oil. Those who want to see change within state security forces have not been encouraged by the previous administration’s lack of desire to hold those responsible accountable.”