*indicts security agencies, govt officials
As Nigeria grapples with economic challenges, findings have indicated worsening scourge of crude oil theft, with daily losses to the nation having risen from 100,000 barrels/day in 2013 to 400,000 barrels/day in 2023.
A report released by public policy firm, Nextier, during the week concluded that the large-scale theft of crude oil in Nigeria involves sophisticated networks, including powerful actors, foreign buyers, security personnel, transporters, and government officials.
Equally worrisome is the small-scale artisanal theft of the commodity conducted by locals creating underground economies, often with local political and security support, said the report authored by Dr. Ben Nwosu, an Associate Consultant at Nextier, a Senior Research Fellow at the Institute for Development Studies, University of Nigeria; and Dr. Ndu Nwokolo, a Managing Partner at Nextier and an Honorary Fellow at the School of Government at the University of Birmingham.
They also noted that Nigeria lost 643 million barrels of crude oil (valued at $48 billion) from 2009-2021 due to theft, more than half of the 2021 national debt, due to this situation.
This hinders Nigeria’s ability to meet OPEC quotas, reducing from 2.5 million barrels/day in 2010 to 1.38 million barrels/day, the report highlighted.
On the home front, Nextier stressed that “illegal refining involves risks like uncontrolled heat, poorly designed condensation units, and environmental hazards, causing 285 deaths from explosions between 2021-2023.
“Despite dangers, local refineries thrive due to economic need and government corruption. Nigeria’s four refineries, with a total capacity of 4.45 million bpd, now function at only 6,000 bpd due to corruption and mismanagement.”
It further pointed out that massive corruption in oil importation and subsidies, resulted in billions of naira missing or unaccounted for between 2016 and 2019; while government’s inability to support modular refineries ha led to reliance on illegal refineries.
Interestingly, security forces often collude with thieves, providing protection for a fee; whereas recent interventions, such as the destruction of illegal refineries, have offered temporary relief, but these gains are short-lived as new illegal operations quickly emerge, said the report.
According to Nwosu and Nwokolo, “the cumulative effect of governance failures, corruption, and the inability to effectively police oil infrastructure has fostered a moral justification for artisanal-level bunkering and illegal refining among local communities.
“Addressing this complex issue requires more than punitive measures; it demands a comprehensive approach that tackles the root causes, including the need for effective governance and economic opportunities for affected communities.”
