Just as Nigeria gets to grips with militants who brought the nation’s oil industry to its knees a few years ago, another group of longstanding foes are slowly making a comeback: thieves.
Saboteurs including thieves caused an 80% increase in the number of spills in 2018, Royal Dutch Shell Plc, the largest international producer in the West African country, said in a report last month. By contrast, there have been no militant-related halts to operations since 2016.
The disruptions underscore how hard it will be for Nigeria to fully rid itself of security challenges that have plagued the nation for decades. Overseas crude shipments represented by far the nation’s largest source of export income, with about $43.6 billion of sales last year, according to ITC Trade Map, a venture between the WTO and the UN.
“Oil theft is a severe drain on Nigeria’s revenue,” said Cheta Nwanze, the head of research at SBM Intelligence, a Lagos-based consultant. “The losses to theft could easily fund Nigeria’s budget deficit.”
Eight Times
On one level, theft is probably a more palatable option for Nigeria and the companies operating there than attacks by militants. About 100,000 barrels a day are being taken out of pipelines, whereas militancy halted at least eight times times that amount at one stage three years ago.
The increase reflects a belief among local communities that multinationals don’t really own the barrels in the first place, according to Ledum Mitee, a lawyer and minority rights activist.
“They believe the oil is theirs and the government is the thief,” he said. “People now realize that instead of just cutting pipelines to spite the government, they can make money out of it.”
Big Employer
It’s also akin to an industry. Theft employs at least 500,000 people in the country, according to Mitee, former head of the Nigeria Extractive Industries Transparency Initiative.
Much of the stolen crude is processed in tiny, makeshift refineries comprising hundreds of cauldrons, each of which can hold as much as 150 barrels of oil, according to Nwanze. The world’s biggest refineries handle more than 1.2 million barrels each day.
Unlike politically-driven militancy, where fighters say they represent impoverished people in the Niger Delta region, stealing crude is considered a less risky option for those involved.
Multiple incidents of force majeure, a legal measure that allows companies to forgo their contractual supply obligations, have happened this year in Nigeria -- even if the precise causes often remain unclear.
Nembe Creek
Aiteo Group, operator of the Nembe Creek Trunk Line to Shell’s Bonny export terminal, has been one of the hardest hit this year, halting flows through the link at least three times since January.
And the challenges doesn’t appear to be getting easier. Shell lost an average of 11,000 barrels a day to theft in 2018, it said. That’s up from losses of 9,000 barrels of crude a day in 2017.
Chevron Corp. has also reported problems with third-party interference on its production facilities.
The rogue refineries, essentially scaled up versions of widespread gin distilleries in the region, typically employ about 100 people working in shifts. Yields from a single cauldron will include 7,500 liters of diesel, 2,000 liters of gasoline and 500 liters of kerosene a day. It costs about 4 million naira ($11,100) to construct a boiling pot.
Crude Operators
Oil producers often take their own security measures, deploying daily helicopter surveillance with infrared cameras while simultaneously pushing state authorities to do more. But large-scale theft persists.
Addressing the challenge requires a “holistic approach,” Nigeria’s Oil Minister Emmanuel Kachikwu said after attending a cabinet meeting in Abuja last month.
“Oil theft is rife because there is an economic gain to be made from it,” Kachikwu said. “So we want to shut those illegal gains by creating positive and legal economic opportunities.”
By Elisha Bala-Gbogbo
Bloomberg
Wednesday, June 5, 2019
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Students from Nigeria return home to heroic welcome after China contest
A team of 6 Nigerian students who emerged 3rd at the recently concluded Huawei Global ICT Competition in Shenzhen, China, have returned home to heroic welcome. At least 49 teams from 30 countries took part in this years contest.
Child viglantes in Nigeria return to school
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Thursday, May 30, 2019
Football boss of Nigeria Amaju Pinnick ordered to appear in court
The quintet, including NFF president Amaju Pinnick, are due to appear in court in the capital Abuja on 1 July, according to Justice Ifeoma Ojukwu.
Prosecution lawyer Celsius Ukpong, from the Special Presidential Investigation Panel (SPIP) for the recovery of public property says they will face a number of charges.
As well as Pinnick, NFF vice presidents Seyi Akinwunmi and Shehu Dikko along with general secretary Mohammed Sanusi and executive committee member Ahmed Yusuf have all been ordered to appear.
The charges include failure to declare their assets, the alleged disappearance of US$8.4 million paid by Fifa to Nigeria for participation in the 2014 World Cup and arranging international friendly matches that do not take place.
"We are expecting the accused persons, the defendants, to come to court and take their plea," Ukpong insisted.
However, all five men have always denied all the charges levelled against them, with the football authority calling the accusations "frivolous and baseless" early this month.
With the hearing set to resume in the middle of this year's Africa Cup of Nations, the NFF has played down speculation it could affect the team.
"Our lawyer is handling the matter and the NFF will only make a statement at the appropriate time," NFF director of communications Ademola Olajire told BBC Sport.
"The NFF is focused on important football matters and the priority is to ensure all our teams succeed."
It is not the first time officials of the NFF will be involved in corruption allegations.
Back in 2010, four former officials were arrested amid accusations that some $8m went missing during the World Cup finals in South Africa.
It took eight years for the quartet to be acquitted by the anti-graft agency.
By Oluwashina Okeleji
BBC
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