New Telegraph

Booming business of crude oil theft

Oil theft

International Oil Companies (1OCs) operating in Nigeria, are believed to have lost a sizable chunk of $41.9 billion, being the total amount of money lost by Nigeria to crude oil theft in the last 10 years. Industry sources said that the oil majors in the country have lost substantial amounts to untoward practices such as theft, pipeline vandalism, sabotage among others, adding that the money that they have lost runs into several billions of dollars.

According to the sources, the development might have contributed to the spate of divestments in the Nigerian oil industry. They added that the firms, which have their parent companies abroad, are leaving Nigeria in order not to incur more losses. This happens, as the Nigeria Extractive Industry and Transparency Initiative (NEITI), said that Nigeria has lost more than $41billion to crude oil theft and other shady practices in the last few years.

In an interview with Saturday Telegraph, NEITI’s Executive Secretary, Mr. Orji Ogbonna, traced the cause of crude oil theft to actors and participants in the illegal oil business. He chided illegal oil refiners and pipeline vandals as accomplices in the stealing and trading of crude oil in the country.

He said: “Crude oil theft involves a range of actors and participants, who made up the illegal oil ecosystem. It includes a network of bush or illegal refiners, pipeline vandals, suppliers, middle men, distributors and array of service providers, whose aim is to make money through fraudulent means.” Citing data on crude oil thefts in Nigeria in the last 12 years, Ogbonna said that Nigeria has lost 605 million barrels of crude oil to theft, pipeline vandalism, sabotage and other problems during the period. According to him, the country lost 69.49 million barrels of crude oil to theft in 2019, 78.31 million barrels in 2010, 38.61 million in 2011, 51.58 million, in 2012, 78.32 million in 2013, 40.17million in 2014 and 27.12 million in 2015. Others are 101.05 million in 2016, 36.46 million in 2017, 53.28million in 2018, 42.25 million in 2019 and 39.16 million in 2020. “There are several other factors influencing any company to make choices of new investment destinations.

It is therefore a narrow argument to attribute any such decision of a company or a group to oil theft. Besides, every business has its peculiar environment challenges and opportunities. As an industry expert, I’m aware that the challenges before the oil majors are far more than the opportunities that are begging for attention,” he said.

Recall that Shell in a story credited to Reuters, put off its assets in Nigeria’s Oil Mining Leases (OMLs) at a cost of $3billion. So also other firms are making efforts to divest their stakes from the country’s oil industry due to what they referred to as part of their growth plans. Similarly, local oil companies are believed to be showing interest in some of the assets, which IOCs are planning to sell in the country. Shell, ExxonMobil and Chevron had in separate interviews with Saturday Telegraph, denied plans to divest their stakes in Nigeria.

However, it was not long after this that the reality dawned on the stakeholders that they were concluding leaving the nation’s energy landscape for new investments. In recent times, ‘kpo’ business has been on the increase because of poverty, unemployment among other things. That has also made oil companies divest, while many are now running offshore where they feel there won’t be much disturbance from the community folks. Reacting to the development, King Bubaraye Dakolo Agada IV, the Ibenanaowei of Ekpetiama Kingdom, an environmentalist and the author of “Riddle of oil Thieves”, said: “Oil companies are the authors of the challenges they are facing. When they came in the 60s, there were no challenges.

The oil companies are the only ones doing oil business in this place and they did it for forty years and things became turbulent. “Their divide and rule strategy was what has led to the situation that they can no longer cope with. But they are pretending that they can cope because they have seen that in terms of cost, it is going to be cheaper for them to go offshore because they are profit mongers. In the whole world, this is the only place where they make much profit. So, once they feel that the gain is no longer as big as it used to be, they want to run away.

“The real oil thieves are not those doing ‘kpo’ fire business. Oil thieves are not doing ‘kpo’ fire business. The ‘kpo’ fire people are the victims of oil thievery. They are the blind, innocent people that you refused to give education to, they refuse to give jobs to. They have pushed them to do the worst thing. Is it not cancer that they are swallowing every day? You now call them oil thieves because they don’t have a mouth and microphone to talk. “You refused to give their fathers jobs, no government school is working. They grew up in abject poverty and confusion.

So, their lives are worth nothing. That is why they can go and do that thing. Oil thieves have private jets; they have houses in England and America. They fly every day. They have their children all over the world going to school. “The vessel that the navy caught recently had about 22 trucks of crude, is that ‘kpo’ fire? The oil thieves will not come and stay around here because this place is dirty for them with their suits. Do you know that my kingdom is someone’s oil block? People have used so-called law to do all these things.” Solomon Ogbere, spokesperson for the Nigeria Civil Defence Corps, Bayelsa Command, in his reaction said that it was an allegation from members of the public, which, according to him, they were fully aware of.

“In Bayelsa State, I can vividly tell you that when it comes to ‘kpo’ fire and bunkering, I can beat my chest and tell you that in all the oil producing states, the state has tried as much as they can to make it very minimal and that it is so because of the security agencies. “We have been putting heads together with both the military, civil defence and JTF to see how we can curtail the menace. If we are colluding with the oil thieves, I don’t think we would achieve such because there is nothing of such in Bayelsa State. We have been trying our best and we have been making sure that illegal bunkers are arrested, and this is eradicating the menace in the state. If you go down to the production itself you will know that Bayelsa has improved. “As of 2021, we destroyed and set ablaze more than 118 ‘kpo’ fire camps.

Go to Southern Ijaw and confirm. We have our personnel there both at Ogboinbiri and Ologbobiri and they are working with surveillance companies. Even the military is there. Sometimes, we destroy three camps on a daily basis and when you destroy their camps, the next day they will go back and set it up again. “That is the problem we are facing and when we destroy the camps they will tell us it is causing environmental pollution. If we pour it in the river, they will tell us it is causing river pollution. So, we are also in a dilemma,” he said. The spokesperson for the Ijaw youth council, Abilade Ekerefe, while reacting, said that most of the oil thieves are ex-military generals and that they are colluding with serving military personnel to siphon oil to the high sea. “Our people know about these things, but nobody can say anything because they are being carried out by highly placed persons.

“Most times, the oil companies use insecurity as an excuse to leave the country, but the truth of the matter is that insecurity shouldn’t be an excuse because the Niger Delta now is relatively peaceful. At times they talk about pipeline vandalisation and youth restiveness, but pipelines are supposed to be upgraded. They failed to upgrade them and that is why you see equipment failure,” he said. Ken Robinson of the Pan Niger Delta Forum (PANDEF), however, noted that the young men, who out of frustration, hunger, unemployment, anger involved in illegal refining of crude oil, apart from the environmental hazards that they cause, were not the real economic saboteurs. He said: “There are big time oil thieves, who are escorted by the Nigeria military to vessels that are waiting outside. Every day, barrels of crude oil are stolen and exported out of Nigeria by international oil thieves in collaboration with high profile Nigerians and Nigerian military officers. What we see is a distraction from the real thing. It is unfortunate that the activities of these young men and women in the Niger Delta have increased environmental and health issues. “But they are petty thieves, they are like pick pockets.

The real big thieves are known by those in government and some of them are in the corridors of power. Young men and women in the Niger Delta have been driven out of necessity and they are doing what they are doing for survival. Unfortunately, it has adverse effects that are detrimental to the health of the people, particularly those in the coastal areas and now even those in the upland communities.” An environmental rights activist, Moris Alagoa, said in his comments that “I don’t think that this divestment is driven mainly by oil theft. Shell knows that it has caused a lot of havoc and violence in our environment and they now see that people have known their ways of operation and that it is no longer favourable for them.

So, they are trying to run to the ocean to continue their shameful environmental practices and it is most unfortunate that agencies like NOSDRA and the ministry of the environment do not have the capacity to monitor these offshore activities.

“They should not think that they can mess up the environment onshore and run offshore where we can’t reach them. It is not because of oil theft that they want to divest. The oil companies are also thieves that are shortchanging the country. Oil thieves include the oil companies and people who are trusted with public offices, security agencies and those at the management of the nation’s oil and gas resources.” But, Mike Adande, the spokesperson for Shell, said in a document he sent online that “following divestments of some assets in Warri area of the Niger Delta and the recently announced sale of OML 17 in the eastern Niger Delta, the SPDC JV in line with its current strategic intent has continued to streamline its portfolio. SPDC, as the operator, is restoring and repairing oil and gas wells. Many of these wells were either damaged or closed due to previous unrest.”

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