Nigeria Tracks Down Bunker Vessel and Holds it on Oil Theft Charges

The Nigerian Navy reports it tracked and subsequently arrested a Panama-registered bunker vessel which it is accusing of oil theft. They tracked the vessel offshore before apprehending it with 13 crewmembers aboard and brought it back to Lagos over the weekend as part of a wider operation to crackdown on oil thieves.

The vessel the Sweet Miri (1,800 dwt) is reported to be owned by a Ghanaian according to the Nigerians but according to databases is managed out of the UAE. The vessel is 34 years old and operates in the Gulf of Guinea region.

Flag Officer Commanding the Western Naval Command, rear Admiral MB Hassan, told reporters on Saturday that the navy had been observing the bunker vessel and its activity for some time. He said the vessel had turned off its AIS signal on February 25 which raised suspicions. The Navy dispatched a gunboat to investigate and they had suspicion the vessel was smuggling oil.

The Navy dispatched a second vessel in the search for the Sweet Miri before they finally located the vessel approximately 174 nautical miles from Nigeria. It was traveling to Benin when it was apprehended. The command reported a search turned up nearly two million liters of oil and the vessel was ordered to return to Nigeria.

The vessel and its crew of 13 have now been placed under arrest while the commander said other departments of the government were also free to search the ship. The crew consists of one Ghanaian and 12 Nigerians.

The seizure was part of a wider crackdown across the region on alleged oil thefts. Over the past few months, there have been several reports of smaller vessels being held on allegations of oil theft.

The Nigerians in August 2022 chased a large tanker, the Heroic Idum, which they also charged with loading stolen crude. The vessel took refuge in Equatorial Guinea but was later handed back to Nigeria which used antipiracy laws to charge the crew. A settlement was finally reached in April 2023 when the vessel’s operators agreed to a public apology and a fine but it took till June 2023 for the crew to be released.

The Maritime Executive

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Oil pipeline blast kills at least one in Nigeria

A crude oil pipeline explosion killed at least one person and injured another on Friday, authorities on the scene said, while members of the affected community in Emohua said they feared many more had died in the blast.

Garuba Yabuku, civil defence spokesman for Emohua, in Rivers State, the heart of Africa's biggest oil industry, said the incident was reported around 4:30 a.m.

"The pipeline was gutted by fire. We are not sure the number of casualties but a lady was rescued and body burnt. We are still on rescue operations," he said at the scene, where the fire was still blazing from the pipeline next to five burned out vehicles flanked by a palm forest.

"Many people got burnt inside the fire, males and females. It could be up to 15 in number," community leader Ogbonna Francis told Reuters at the scene.

Oil theft and pipeline sabotage are common in the southern oil production heartland of Nigeria, Africa's biggest crude producer. The methods used to steal oil often result in accidents that cause fires.

In 2018, a similar disaster killed 60 people.

By Tife Owolabi, Reuters

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Video - Nigeria oil saga

More than 11,000 Nigerians from the oil-producing Niger Delta have filed a compensation claim against Shell at the London High Court. Some 17 institutions have also joined the suit. It’s the latest of several cases against the multinational oil corporation over its operations in the Niger Delta. The applicants claim widespread environmental destruction and loss of livelihood. In its defence, Shell, through a spokesperson, blames illegal third-parties for a majority of the spills. This week on the programme, we highlight the key issues in this latest suit and examine at length what experts have characterised as “years of devastating environmental destruction” of the Niger Delta.

CGTN

Video - Unprecedented levels of oil theft in Nigeria cost millions

Nigeria is facing unprecedented levels of theft of its main export. The theft of oil is costing the country an estimated $700m a month. And the losses are forcing the government to borrow more to fund a growing budget deficit. Al Jazeera's @AhmedIdris reports from the Niger Delta, Nigeria. 

Al Jazeera 

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Pirates in Nigeria Switch From Kidnapping Seafarer to Stealing Oil

The Gulf of Guinea is witnessing a shift in the dynamics of piracy, with criminal networks moving away from targeting commercial maritime and switching to oil bunkering, theft and illegal fishing, a development that indicates the global community must remain vigilant.

The UN Security Council (UNSC) has been informed that despite a significant drop in piracy incidents in the Gulf of Guinea in recent times, stronger action is still required to address the changing dynamics of piracy in the vast waters. Criminal groups have not gone away, but have transitioned to other activities.

Martha Pobee, an Assistant Secretary-General in the Department of Political and Peacebuilding Affairs in the UN who presented the Secretary-General’s latest report on piracy in the Gulf of Guinea, warned that the shifting dynamics will require greater response not only from countries in the region but also from international partners.

“Pirate groups are adapting to changing dynamics both at sea and in coastal areas. In this respect, the recent decrease in instances of piracy may in part be attributable to the shift by criminal networks to other forms of maritime and riverine crime, such as oil bunkering and theft, which they likely view as both less risky and more profitable,” she said.

Nigeria has witnessed an unprecedented surge in large scale cases of oil theft and pipeline vandalism, whose impacts have been crippling of the country’s oil industry, with production in the months of August and September plummeting below one million barrels per day (bpd), the lowest levels in decades. An investigation by the country's senate reckons the widespread cases of thefts have resulted in Nigeria losing more than $2 billion during the first eight months of this year.

Once a hotspot of maritime piracy, the Gulf of Guinea has recorded a drastic decline in incidents due to concerted efforts by national authorities supported by regional and international partners, both on land and at sea. Actions such as increased patrols, deployment of naval assets, enhanced coordination as well as convictions have served as deterrents to criminal networks.

In a quarterly report released last month, the International Maritime Bureau contends that although global piracy and armed robbery incidents have reached their lowest levels since 1992, the world cannot afford to be complacent, particularly in the Gulf of Guinea. Of the 90 incidents reported in the first nine months of 2022, 13 were in the Gulf of Guinea region compared to 27 over the same period of 2021.

In her report to the UNSC, Pobee reports that due to the changing dynamics of criminal activities in the Gulf of Guinea, it is imperative for states and their regional and international partners to accelerate efforts to establish security in the region as outlined in the Yaoundé Code of Conduct, signed in June 2013.

The code, which is approaching its 10th anniversary, promotes information sharing and reporting, interdicting suspicious vessels, ensuring apprehension and prosecution, harmonizing national legislation, guaranteeing resources to maritime security and safety, and outlining state responsibility to patrol anchorage areas.

Part of recent measures to wage a coordinated war against the piracy networks include the signing of an agreement to establish a Multinational Maritime Coordination Centre for a zone covering Cabo Verde, Gambia, Guinea-Bissau, Mali and Senegal and conducting a maritime exercise involving 17 of the 19 countries bordering the Gulf of Guinea.

The Maritime Executive

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26 men charged in suspected crude theft from oil tanker

A Nigerian court has charged 26 men with conspiracy to commit a maritime offence and attempting to illegally deal in crude oil after authorities accused their supertanker of sailing in Nigerian waters without authority.

The captain is an Indian national while the crew members are from Poland, India, Sri-Lanka and Pakistan, court papers showed.

At the request of Nigerian authorities, Equatorial Guinea detained the Heroic Idun, a vessel capable of carrying 2 million barrels of oil, on Aug. 17 for sailing without an identifying flag, fleeing from the Nigerian navy and sailing in Equatorial Guinean waters without prior authorization.

The 26 men, including the captain, appeared in a High Court in the Nigerian Rivers state capital Port Harcourt on Monday and Tuesday and the judge ordered them to be detained on their ship under the guard of the Nigerian navy.

The men, who all denied the charges, were accused of having "attempted to deal with crude oil within the Nigeria Exclusive Economic zone without lawful authority".

Nigeria said the vessel had not loaded any oil before the navy approached it, but said the ship made a false claim of a piracy attack, entered a restricted area without authorization and attempted to load crude oil illegally.

Oil theft has taken more than 400,000 barrels per day from Nigeria's oil output, hit state finances and knocked it from Africa's top exporter to number two, the state oil firm says.

Reuters, by Tife Owolabi

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Nigeria loses $12.6b worth of crude oil in nine months

Nigeria has lost nothing less than 120 million barrels of crude oil from January and September this year amidst revenue crisis.

The level of crude oil loss in production translates to $12.6 billion going by crude oil production data obtained from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

While Nigeria had proposed a budget of N20.5 trillion ($47.3 billion) in 2023 with the feasibility of relying heavily on borrowing amidst the country’s debt crisis, the $12.6 billion loss from the oil production would have provided a quarter of what is needed to finance the budget.

Infrastructure issues, pipeline leaks and oil theft have squeezed Nigerian output this year, leaving the country consistently below its OPEC+ crude targets. Nigeria’s own submission to the OPEC Secretariat put September crude output at just 938,000 b/d, just over half its quota for the month, while total liquids production was only 1.14mn b/d, according to the NUPRC.

Notwithstanding the challenges, the Nigerian National Petroleum Company (NNPC) Limited is hopeful the country’s oil production will rebound to 1.8mn b/d by the end of the year and to increase further in 2023.

If Nigeria is successful in increasing its oil production, it may again broach the subject of adjusting the baseline production figure that determines its quotas within the OPEC+ group.

In 2021, the country produced 1.7 million barrels per day (bpd) in January, 1.76 million bpd in February and 1.74 million bpd in March. Production volume dropped slightly to 1.68 million bpd in April, went down to 1.65 million bpd in May and went to 1.63mbpd in June and July before dropping to 1.5 million bpd in August and September.

Compared to the same period in 2022, January production figure in terms of daily average was 1.67 million bpd, 1.52 million in February. In March, it dropped to 1.49 million bpd, went down slightly to 1.48mbpd in April before dropping sharply to 1.27 million bpd in May, 1.40 million bpd in June. It crashed to 1.31mbpd in July and worsened to 1.1 million bpd in August and September.

The total production from January to September of 2021, which included crude oil and condensate, stood at 452,051,631 barrels.

The total production from January to September of 2022, made up of crude oil, blended and unblended condensate stood at 331,825,054 barrels.

This development brought the level of loss in a space of nine months to 120,226,577 barrels.

While Brent was trading for $95.5 to barrel yesterday, the average between 2021 and 2022 stands at about $105 per barrel. The 120,226,577 barrels loss in the period under review translates to $12,623,790,585.

By Kingsley Jeremiah

The Guardian 

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Nigerian Authorities Defend Decision to Burn Vessel Carrying Allegedly Stolen Oil

 Nigeria's defense chief defended the destruction of a seized ship that was smuggling stolen oil, saying no investigation was needed. Critics say the military's burning of the ship last week destroyed vital evidence and accused the military of a cover-up.

Nigeria's chief of defense staff, General Lucky Irabor, spoke after last Friday's national security meeting with the president.

Irabor said the swift response of security operatives followed the rules of engagement and that they didn't need to carry out any investigation because the ship was caught in the act.

Security operatives last week seized and burned an 87-meter-long vessel allegedly carrying 650,000 liters of crude oil in southern Delta state. The vessel had seven crew members aboard.

The bust was one of the biggest in recent weeks led by a former Delta state militant, Government Ekpemupolo, widely known as Tompolo. Nigerian authorities in August awarded him a multi-billion-dollar surveillance contract in a desperate bid to address rampant oil theft.

On Sunday, popular human rights lawyer Femi Falana called for the removal of the defense chief. Human rights lawyer Marshall Abubakar said he agrees and said the burning of the ship is highly suspicious.

"Why the hurry in destroying this vessel?” Abubakar said. “There have been allegations that the menace of oil theft is being perpetrated by persons in authority. The hurried destruction lays credence to that particular allegation."

Experts say Nigeria has been losing thousands of barrels and millions of dollars every day to crude oil theft.

The ex-militant's company has so far uncovered 58 instances of oil being siphoned from pipelines, including one connected to Nigeria's major export line where oil was tapped unnoticed for nine years.

Tompolo has also alleged that security operatives, oil companies and local residents usually collude to steal oil. Last week, lawmakers promised to investigate the matter and make public their findings.

Abuja-based lawyer and economist Eze Onyekpere said the burning of the ship will make any investigation more difficult.

"When you apprehend an offender, you'll need evidence to be able to prove before a court of law that such a person committed the offense in question,” Onyekpere said. “The vessel on which the crude oil is being carried is one of those pieces of evidence that you'll need to bring before a court of law."

Abubakar also worries about environmental damage.

"The destruction of this vessel in open space without appropriate paraphernalia to protect the ozone layer is an injustice the struggles and environmental rights of the Niger Delta people,” Abubakar said.

Critics are waiting for answers and monitoring what authorities do next.

By Timothy Obiezu 

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Shell investigates in Nigeria after report of nine-year oil theft

Oil major Shell's (SHEL.L) Nigerian subsidiary is investigating reports that an illegal oil tap ran for nine years on a pipeline it operates, a spokesperson said on Wednesday.

An NNPC spokesman said on Sunday the theft point extended from the Trans Escravos pipeline and that the Afremo platform, operated by the Shell Petroleum Development Company of Nigeria (SPDC), was the suspected exit point of the stolen crude.

"We are also conducting an investigation to establish where the theft lines end and whether there have been any breaches of the unmanned platform's security barriers (locks etc.) or any unauthorised use of the equipment on it," an SPDC spokesperson said in an email.

SPDC said it had detected illegal connections as part of regular surveillance and would launch a joint investigation with regulators to "establish the nature and condition" of the lines before removing them.

NNPC pointed to the theft line discovery as evidence that Nigeria's coordinated interventions, including contracts with companies owned by former militants, to crack down on theft were paying off.

Large-scale theft from Nigeria's pipelines has throttled exports, forced some companies to shut in production and crippled the country's finances.

By Libby George

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Nigerian oil export terminal had theft line into sea for 9 years

Officials in Nigeria discovered an illegal connection line from one of its major oil export terminals into the sea that had been operating undetected for nine years, the head of state oil company NNPC LTD said.

The 4-kilometre (2.5-mile) connection from the Forcados export terminal, which typically exports around 250,000 barrels per day (bpd) of oil, into the sea was found during a clamp-down on theft in the past six weeks, NNPC Chief Executive Mele Kyari told a parliamentary committee late on Tuesday.

"Oil theft in the country has been going on for over 22 years but the dimension and rate it assumed in recent times is unprecedented," Kyari said in an audio recording of the briefing reviewed by Reuters.

Thieves often tap land-based pipelines to siphon oil undetected while they continue to operate, but an illegal line in the ocean is highly unusual and suggests a more sophisticated theft operation.

Forcados operator SPDC, a local subsidiary of Shell (SHEL.L), did not immediately provide a comment.

Nigeria, typically Africa's largest oil exporter, is losing potential revenue from some 600,000 bpd of oil, Kyari said, as some is stolen and as oil companies idle certain fields rather than feed pipelines tapped by thieves.

Crude oil exports fell below 1 million bpd in August for the first time since at least 1990 as a result, starving Nigeria of crucial cash.

Loadings at the terminal have been stopped since a leak was found from a sub-sea hose at the terminal on July 17. Shell said this week that it expected loadings to resume in the second half of October.

In August, NNPC awarded contracts to companies including those owned by former militants to crack down on oil theft.

By Camillus Eboh

Reuters

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Ex-Militant Tapped to Protect Nigerian Pipelines He Once Blew Up

Nigeria’s government has turned once again to a man it previously hunted as a thief and enemy of the state, recruiting him to curb rampant theft on the oil pipelines he used to blow up.

Oil production in Nigeria has plummeted over the past two years, hitting the lowest level in about half a century. The government blames rampant crude theft, pipeline sabotage and illegal refining, which it says siphons off as much as a fifth of output every day. To stem the losses, the state-owned energy company has hired security companies linked to one of the most feared of the Niger Delta’s onetime warlords: Government Ekpemupolo.

“We are going to move into serious action where we will stop all the illegal activities in the Niger Delta region,” Ekpemupolo, 51, more commonly known as Tompolo, told reporters on Sept. 2 in the town of Oporoza in Delta state.

Few people know more about wreaking havoc on the Nigerian oil industry than Tompolo, who -- as a leader in a loose coalition of heavily armed rebels -- waged a campaign from the mid-2000s for greater local control over the delta’s hydrocarbon wealth. Their attacks slashed nearly a third from peak production of 2.5 million barrels a day, before he and his peers accepted a government amnesty that granted them lucrative pipeline surveillance contracts and put an end to the violence.

That truce soured after President Muhammadu Buhari came to power seven years ago, terminating the contracts and renewing hostilities with Tompolo in particular -- as of this week he is still listed as a wanted man by the country’s anti-corruption agency.

But daily production is currently nearly 800,000 barrels lower than it was at the militants’ peak, while the Nigerian government is spending billions of dollars subsidizing gasoline and earning less than its debt-service bill.

At a media briefing last week, Mele Kyari, chief executive officer of the Nigerian National Petroleum Co., defended the decision to hire, among others, two companies connected to Tompolo as part of a plan to use private security to protect the vulnerable pipelines that crisscross the delta in the south of Africa’s largest crude producer.

“Contractors were selected through a tender process for people who can do it,” he said on Aug. 30. “Not everyone can do it.”

Tompolo has stakes in two of the companies contracted by the NNPC -- Tantita Security Services Nigeria Ltd. and Matton International Services Ltd. -- according to his spokesman, Paul Bebenimibo.


“We don’t want to be second-class citizens in this country because we produce the oil that feeds everybody in this nation,” Tompolo said in the Sept. 2 television interview. His argument echoed those made by militants in the late-2000s to justify attacks on pipelines.

Average daily crude production in Nigeria fell to about 1.2 million barrels in July from about 1.9 million barrels as the Covid-19 pandemic struck in the first quarter of 2020, according to data compiled by Bloomberg. The unfolding collapse has left the country unable to meet its OPEC+ quota or to benefit from high oil prices.

Top military officials have disputed the levels of theft advanced by the NNPC and other oil companies, pointing to the firms’ inability to maintain aging facilities or good relations with local communities. But Kyari said Nigeria could be producing up to 700,000 barrels a day more if not for criminals stealing crude and oil companies holding back for fear of theft.

“There is no company that will produce oil and then lose 80% of that and continue to produce the oil,” he said.

Companies injecting into onshore pipelines in the eastern Niger Delta are facing the most trouble. The Shell Plc-operated plant at Bonny, Nigeria’s largest export terminal, received an average of only 42,000 barrels a day in May, less than a fifth of 2020 input, according to government data. Sixty miles away, the Eni SpA-owned Brass terminal has experienced a similar deterioration.

Since June, the 180,000-barrel-a-day Trans Niger Pipeline, one of two that feed Bonny, has ceased transporting oil altogether due to theft. The pilfered haul is either turned into black market fuel at illegal refineries in the delta or barged out to sea for sale overseas.

Now the government is betting on one of the men responsible for a previous production crisis to resolve an even larger dip, despite accusing him in 2015 of being behind a new wave of attacks and seeking his arrest in early 2016 for an alleged 46 billion-naira ($106 million) fraud.

Tompolo told reporters last week that he planned to spread the benefits of the new pipeline security contracts widely in the delta.

“I have been in this struggle for all these years and I know that greed is the cause of all the problems in the country,” he said.

By William Clowes

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Nigeria's Buhari worried over large scale crude oil theft

Nigeria's Buhari worried over large scale crude oil theft

Nigeria's President Muhammadu Buhari expressed concern on Friday over large-scale crude oil theft, saying it was affecting the country's revenues "enormously".

Nigeria lost $1 billion in revenue during the first quarter of this year due to crude theft, the oil regulator has said.

Nigeria is unable to meet some of its financial obligations to its citizens due to the oil theft, Buhari told government workers who are requesting a pay increase to help deal with double-digit inflation.

"On your request for a salary review, I wish to urge you to appreciate the revenue constraints being presently faced by government which is caused mainly by the activities of unscrupulous citizens through the theft of our crude oil, a major contributor to our revenue base," Buhari said.

Crude theft poses an existential threat to Nigeria's oil industry, the local head of Shell (SHEL.L) has said, resulting in the shutdown of two of its major pipelines.

Nigeria is currently battling to stabilise its ailing currency , to curb surging inflation and boost growth after the economic disruption caused by the COVID-19 pandemic.

Annual inflation (NGCPIY=ECI) in Nigeria hit a 17-year high in July, data showed on Monday. read more

Buhari also blamed the war in Ukraine for the rise in global food prices and high transportation costs for goods and services.

He instructed security agencies to speedily clamp down on those involved in oil theft in the Niger Delta, adding that Nigeria was also strengthening cooperation with its neighbours to stop criminals syphoning away stolen crude by sea.

"We will not allow a few criminals to have unfettered access to the nation's oil supply," Buhari said. 

By Felix Onuah

Reuters

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Nigerian Authorities Launch App to Monitor Crude Oil Theft

Africa's largest oil producer, Nigeria, says thieves and vandals cost the country up to 200,000 barrels of oil per day - that's billions of dollars in lost revenue. To combat the problem, Nigerian oil authorities have launched a mobile app for reporting the incidents and rewarding those who do.

The launch of the crude oil theft monitoring app took place last Friday in Abuja, during the signing of renewed production contracts between the Nigeria National Petroleum Commission and its oil drilling partners.

Authorities said the mobile platform was created for members of host communities in oil-rich regions to enable early reporting of incidents and spur immediate action from relevant security and government authorities.

Whistleblowers will also be rewarded.

During the launch, the NNPC group head Mele Kyari admitted that pipeline vandalism has become difficult to control.

In July, Nigeria changed its oil firm from a solely state-run entity to a commercial oil company.

Emmanuel Afimia, the founder of Abuja-based energy consulting firm, said addressing oil theft is an important issue the new company must deal with to improve its earnings.

"At this point, NNPC would be able to at least find solutions to the issue of subsidies, to the issue of inefficiencies, to the issue of loss every year,” he said. “Because the effect would actually be felt by them, so I'm not sure they would want to continue with the way they've actually been operating the corporation. So this is definitely the right step in the right direction."

According to the NNPC, with losses at 200,000 barrels of crude oil a day Nigeria loses about $4 billion in revenue every year.

Kyari said so far this year, the country has already lost $1.5 billion due to escalation of pipeline vandalism and oil theft at the Bonny Terminal in Rivers State.

But Toyin Akinosho, publisher of the Africa Oil+Gas Report, said beyond launching an app, political will is needed to address the problem.

"It's very important that the state hydrocarbon company itself is announcing this [but] it's not just a question about tracking, it's actually how you deliver on ensuring that those incidents don't happen again,” he said. “There has to be the will power to deliver. That's what I'm interested in.”

Nigeria has been seeking to cash in on rising energy prices as Europe tries to wean itself off Russia's energy supply following the country’s invasion of Ukraine.
Authorities have revived decades-old “Trans Saharan” pipeline projects from Nigeria to Algeria and also from Nigeria to Morocco. Both projects are targeting European energy markets.

But Akinosho said the projects may not be completed until a few years from now.

"Whatever it is that we're even building will take a bit of time,” he said. “You can't construct these pipelines that the government is talking about, you can't deliver them in less than three, four years.”

In January of this year authorities in Nigeria's oil rich Rivers State began cracking down on illegal refineries locally known as “Kpo-fire.” Many operators were arrested.

Authorities say the government's oil and gas revenue target this year is now threatened by a production shortfall of 28 million barrels caused by oil theft between January and July.

By Timothy Obiezu

VOA 

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Nigeria loses 400,000 barrels of crude oil per day to theft, says FG

The Federal Government has decried huge crude oil theft resulting in substantial loss in production.

Minister of State for Petroleum Resources, Timipre Sylva, who disclosed this, yesterday, when he visited the Imo State Governor, Hope Uzodimma, at the Government House, Owerri, lamented that hoodlums who perpetrate the act has caused the production level to reduce by 400,000 barrels per day (bpd), translating to a drop from 1.8 million to 1.4 million bpd.

Sylva, who was accompanied by a high powered team made up of the Minister of State for Education, Goodluck Opiah; the Chief of Defence Staff, Gen. Lucky Irabor; the Group Chief Executive Officer, the Nigeria National Petroleum Company Limited (NNPC), Alhaji Mele Kyari, said they came as part of industry-wide intervention mission to find a lasting solution to curb crude oil theft in Nigeria, noting that they were also in the state to get the buy-in and support of the state government on how to tackle the problem.

His words: “We’ve come here to engage the state government to get your buy-in and support.” Sylva disclosed that his delegation was in the state to seek the cooperation of the state government, adding that the oil host communities should play a collaborative effort to stop the alarming levels of crude oil theft, which has now become a national emergency.

Speaking, Uzodimma pledged the commitment of government to curb the menace in the state. He said: “We are committed; we are determined. The consequences of oil theft are alarming. Our economy is bleeding.”

Uzodimma regretted that the development has led to a drop in the earnings of government, creating environmental pollution and other health hazards.

He promised that the state government would do its best to support oil-producing companies, as well as collaborate with Federal Government to achieve the goal.

The governor thanked the NNPC Limited for the 200- bed hospital it is building at the Imo State University Teaching Hospital, Orlu.

By Charles Ogugbuaja 

The Guardian

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Explosion at Nigerian illegal oil refinery kills more than 100

The Criminals Undercutting Nigeria’s Oil Industry

Earlier this month 100 people died because of an explosion at an illegal refinery in Nigeria, a tragic event that highlighted a major problem facing the country’s government.

Illegal oil bunkering has long been a problem in Nigeria, with estimates suggesting roughly 10 percent of the country’s daily oil output is lost due to vandalism and theft.

While the government has moved to shut down as many illegal refineries as they can, critics claim that they need to focus on providing alternatives for those people who have been pushed to steal oil.

Illegal refineries have been plaguing Nigeria for years. The government has repeatedly tried to curb clandestine refining activities and has reduced the number of operations substantially in recent years. But several clandestine refineries still exist, presenting a clear danger to those working informally in the oil industry.

Nigeria drew global attention this month as 100 people died because of an explosion at an illegal refinery in the Abaezi forest in the southeast of the country. In addition, many of the vehicles waiting to purchase the fuel were burnt. This is just the most recent of incidents. In October, around 25 people were killed at a different illegal refinery in the region.

Due to high unemployment and poverty rates across the Niger Delta, illegal refining activities have become commonplace. Locals tap the crude oil from pipelines of oil majors running through the region to refine and sell. This has had the twofold impact of causing many deaths, due to the dangerous nature of the activities, and polluting the environment across the region. The crude is highly flammable, meaning the slightest spark can cause a huge explosion and widespread devastation.

The scale of the issue is clear, with Nigeria losing approximately 200,000 bpd, or 10 percent of its daily output, due to vandalism and the tapping of oil pipelines. In 2019, it is estimated that Nigeria lost around 40 million barrels of crude, equivalent to around $2.77 billion.

In addition to the structural problems in the country, many locals are simply fed up with international companies coming in and taking national resources, while they see little of the profits being reinvested in the region. Many believe that if Big Oil comes in and pollutes the land, then they should be able to do the same, earning revenue from Nigeria’s natural resources.

Illegal ‘oil bunkering’, as it is known, is viewed as Nigeria’s most profitable private business. The crude being siphoned from pipelines can earn locals $15 to $20 per barrel. In addition, there are few costs involved as the government and oil majors have already invested in largescale oil infrastructure across the Niger Delta.

Nigeria’s oil industry has existed for over 60 years, with international energy firms investing heavily in developing the sector over that time. It currently has 18 operational pipelines and is the world’s 11th biggest producer. The petroleum industry contributes around 9 percent of Nigeria’s GDP. With an industry this big, it’s no wonder that communities living in poverty are dissatisfied with the reinvestment seen in the country over the last decades, leading them to take the situation into their own hands. The Nigerian government has been working hard to curb this major criminal industry. Earlier this year, the government attempted to curb the trend of illegal refining, particularly as the impact of the activities on air pollution is worsening across the Rivers state region. The government succeeded in halting operations at 128 of 142 illegal refining locations identified by destroying the sites. The next month, reports suggested that the military had deactivated 30 more sites across the Rivers, Bayelsa, Delta and Abia States.

It's clear the government is cracking down on illegal operations, but it doesn’t seem to be enough to put a stop to these types of activities. With such widespread poverty, many simply move from one illegal refinery to the next, well aware that they can make a decent living from tapping oil pipelines despite the high risk involved.

Some environmental groups are now pressuring the government to open small-scale refineries to create jobs and encourage locals to find formal work in the oil industry. They believe that simply destroying illegal refineries will not put an end to illegal operations without replacing them with better working opportunities.

At the beginning of the year, Governor Nyesom Wike provided around $1.1 million in funding to support 23 local governments in fighting ‘oil bunkering’. He suggested that destroying the sites was the only way to stop operations. But little effort has been made to create new opportunities across the oil regions.

While Nigeria presents perhaps the worst case of oil bunkering, similar issues are faced by several governments around the world. In Mexico, for example, oil theft has been on the rise as oil prices have increased. Oil theft or huachicoleo supports violent crime in Mexico as it is often driven by criminal gangs due to the lucrative nature of the activities. The situation led President Andrés Manuel López Obrador to make curbing huachicoleo a core pledge of his 2018 election campaign. Meanwhile, oil theft in Colombia increased last year as supplies of Venezuelan gasoline were halted.

Nigeria has the most widespread activities of illegal oil refining worldwide, causing the government to lose billions of dollars every year as well as wreaking havoc on the environment. While the government attempts to tackle the crime, the failure to reinvest oil revenues into the Niger Delta region or offer formal job opportunities continues to encourage locals to seek informal work in illegal refining, no matter the cost.

By Felicity Bradstock

Oilprice.com

Related stories: Explosion at Nigerian illegal oil refinery kills more than 100

Nigeria number 1 in crude oil theft

Explosion at Nigerian illegal oil refinery kills more than 100

More than 100 people were killed overnight in an explosion at an illegal oil refining depot in Nigeria’s Rivers state, a local government official and an environmental group said.

“The fire outbreak occurred at an illegal bunkering site and it affected more than 100 people who were burned beyond recognition,” the state commissioner for petroleum resources, Goodluck Opiah, said on Saturday.

Unemployment and poverty in the oil-producing Niger Delta have made illegal crude refining an attractive business but with deadly consequences. Crude oil is tapped from a web of pipelines owned by major oil companies and refined into products in makeshift tanks.

The hazardous process has led to many fatal accidents and has polluted a region already blighted by oil spills in farmland, creeks and lagoons.

The Youths and Environmental Advocacy Centre said several vehicles that were in a queue to buy illegal fuel were burned in the explosion.

Al Jazeera’s Fidelis Mbah said that there are dozens of illegal oil businesses scattered around southern Nigeria.

“The unemployed youth are trying to produce oil on their own in order to sell to survive,” he said, speaking from Abuja. “The youths know that this is dangerous but because of the poverty levels, they have taken to [working in] illegal refineries.”

“The government said the owner of the illegal refinery is presently on the run and they have declared him wanted,” Mbah added. “They’re hoping that if he’s apprehended, they will find out exactly what happened.”

At least 25 people, including some children, were killed in an explosion and fire at another illegal refinery in Rivers state in October.

In February, local authorities said they had started a crackdown to try to put a stop to the refining of stolen crude, but with little apparent success.

Government officials estimate that Nigeria, Africa’s biggest oil producer and exporter, loses an average of 200,000 barrels per day of oil – more than 10 percent of production – to those tapping or vandalising pipelines.

That has forced oil companies to regularly declare force majeure on oil and gas exports.

Al Jazeera

Related story: Nigeria number 1 in crude oil theft

Shell raises concern on unprecedented oil theft in Nigeria

Video - Nigeria launches special navy operation to curb sabotage, theft

 

Nigeria's government has launched a special operation led by its navy to curb sabotage and theft of oil in the country's oil-producing areas. Nigeria is battling an unprecedented oil theft which has seen production drop drastically leading to huge loss of revenue. The country has also not been able to meet its OPEC quota for quite some time now as a result of the problem. CGTN's Deji Bademosi has more on the story.