Illegal refining of crude oil, otherwise known as oil bunkering, appears unending in the Niger Delta region of Nigeria.
On a daily basis, despite the efforts of the Federal Government to tackle the problem, syndicates operating the illegal business devise new means of survival.
Bunkering involves oil theft, including the diversion and smuggling of oil and the unauthorised loading of ships.
It involves tapping into oil pipelines and transporting the stolen oil elsewhere to be sold internationally or refined locally. To access the oil, a small group of welders will puncture a pipeline and establish a tapping point from which the group operates.
The syndicates are made up of people from all sectors of the economy, including the locals, traditional rulers, clergy, security operatives, staff of oil companies, among others.
The business of crude theft and illegal oil refining is fast becoming a booming venture in the Niger Delta region, with many of the youths aspiring to go into the business of supplying illegally refined petroleum products.
Despite efforts by successive Nigerian governments to curb the illegal business, the cartels operating it are undaunted, taking advantage of the terrain and conspiring with compromised security agents in the region to continue with their sabotage.
Each day, oil companies in Nigeria lose between 300,000 and 400,000 barrels of oil to theft, which also account for almost 15 percent of the country’s 2.4 million barrels per day production capacity.
Oil export revenue accounts for 70 percent of Nigeria’s total government revenue and 95 percent of the country’s export income.
A loss of 300,000 barrels a day costs the government roughly $1.7 billion a month.
From 2015 to 2023, approximately 5,840 illegal refineries were discovered in the Niger Delta region, with over 50 wells uncovered by the Nigerian military.
The impact of oil theft is not lost on the economy. A recent study reveals that Nigeria loses about N1.29 trillion yearly to industrial-scale theft of crude oil.
Despite the involvement of the Nigerian Army, Navy and Nigerian Security and Civil Defence, the criminal activities have continued and will continue to thrive until the people rise against the cartels that are responsible.
It is a generally known fact that no vessel enters or leaves the Nigerian waters without the knowledge of the Nigerian Navy. Sadly, vessels loaded with illegal crude leave this country daily without being apprehended, except for the few that are often used to do media dressing.
Nigeria has allowed oil theft to go on for decades by not using the oil and gas resources properly for the welfare of the citizens, by not educating the citizens on the value of a clean environment, by not providing petroleum products at affordable costs or rates across the country.
In 2011, the United Nations Environment Programme found that oil pollution had devastated mangroves, contaminated soil and groundwater, destroyed the fish habitat, and posed a serious threat to public health in Ogoniland. The study concluded that it could take up to 30 years to restore Ogoniland.
It said the degradation of the environment had reduced arable land for farming and devastated fishing communities. Several people living in the Niger Delta do not have access to clean drinking water and many have reported oil in drinking water sources.
“The Nigerian economy is hemorrhaging, the oil thieves are having a field day and the authorities appear to be helpless if not hopeless in dealing with the situation.”
Illegal bunkering and refining are not only destroying the environment, they are killing the entire environment due to the misguided and unguided ways and manners the activities are carried out.
Despite efforts by the Nigerian government and the constant destruction of these illegal refining sites by the security forces, criminality still persists in the country, particularly in the Niger Delta region.
The Nigerian economy is hemorrhaging, the oil thieves are having a field day and the authorities appear to be helpless if not hopeless in dealing with the situation.
Whereas the oil quota allocated to Nigeria by the Organisation of Petroleum Exporting Countries in 2024 is 1.58 million bpd, with a federal budget benchmark of 1.78 million bpd, Nigeria is still far from meeting this target. The situation has, as expected, disrupted budgetary expectations.
To underscore how critical crude oil is to the Nigerian economy, the commodity constitutes up to 80 per cent of Nigeria’s foreign exchange earnings and almost 70 percent of its yearly budget. This is why the Federal Government working with the sub-national governments need to tackle the problem head-on.
The losses have been unprecedented. The National Security Adviser, Nuhu Ribadu, stated recently that the country lost 400,000bpd to theft.
Aside Ribadu, a former Minister of State for Petroleum Resources, Timipre Sylva, said Nigeria lost at least 700,000bpd to the thieves in 2022, not in any way comparable to other oil-producing countries plagued by oil theft like Venezuela, Iraq, Mexico, and Malaysia.
In October last year, the Nigerian Senate revealed that the country lost N2.3 trillion to crude oil theft during the year.
As it seems, neither the local security contractors nor the military has been able to win the fight against oil theft, thereby requiring a different approach from the authorities beyond the raids and destruction of crude oil and equipment used in harvesting it. The strategy has not worked in over a decade.
Many Nigerians, including the NNPC, have called for special courts to handle and quickly dispatch cases of oil theft. This call has not been heeded by the authorities.
With Nigeria’s growing debt, the president must ensure that oil thieves are punished in accordance with the law, not minding who is shielding them.
Rather than what seems like a slap on the wrist in the cases of the few that are caught, whichever way one looks at it, what is obvious is that the government is not doing enough to end these huge economic crimes.
Unless Nigeria ends crude oil theft and assets’ vandalism in the Niger Delta, the country’s economy will continue to wobble, at least in the short to medium term.
