Nigeria Misses Bus As Oil Syndicate Sits Pretty On Driver’s Seat

Unimaginable oil wealth is stolen on a daily basis by oil syndicates in Nigeria with a vast ecosystem of crime that reaches the very highest levels of government, while the West African nation remains impoverished.

Crude oil theft, lamented Mele Kyari, chief executive officer of the Nigerian National Petroleum Company (NNPC), the body charged with covering the spectrum of all petroleum industry operations, at a recent meeting, was enormous that the NNPC had seized thousands of illegal refineries in the past 45 months.

According to the NNPC chief, 395 illegal refineries had been deactivated, 274 reservoirs made inactive, 1,561 metal tanks, and 49 trucks seized so far.

In April, more than 100 people were killed in an explosion at an illegal oil refining depot in Southern Nigeria. In another instance of theft, oil major Shell's Nigerian arm is probing an illegal oil tap that ran for nine years on a pipeline it operates.

Theft of oil has been alarming, causing difficulties for the largest economy in Africa to meet its production quota as almost 700,000 barrels of crude are decamped per day.

After a lull, the thugs are back in business in Nigeria, Africa's biggest oil producer and exporter. Since the Covid-19 pandemic abated, the acts of vandalism returned, Kyari observed.

Oil theft is mainly centered around the Niger Delta, where oil was discovered for the first time in the country in 1956. The petroleum and gas industry accounts for about 90 percent of the country's gross earnings, and the Delta is home to this crucial resource. The resource-rich southern region is known for unemployment and poverty, which have made illegal refineries an attractive business option, forcing many oil companies to shut down production.

The worst-hit crude terminals in this southern part were Bonny, Brass and Forcados, which saw production output declining by 79 percent, 40.5 percent, and 96.5 percent, respectively.

The Forcados terminal recorded the highest loss, from over 3 million barrels in July to over 100, 000 barrels in September.

Nigeria has a production capacity of 2.49 million barrels per day but current production is pegged at 1.23 million barrels per day.

Crude oil production came down by 24.73 percent in September to 937,766 barrels per day compared with 1.246 million barrels per day recorded in the same period in the previous year, according to the federal government.

Over the last year, more than $3 billion of oil was stolen, according to government estimates. The siphoned-off oil is later sold on the black market in the country or exported.

The dwindling oil production has forced the Nigerian Upstream Petroleum Regulatory Commission to take steps.

Chief Executive Gbenga Komolafe said in October, "The commission will do everything within its authority to challenge the narrative and halt further degeneration by ensuring transparency in hydrocarbon accounting."

Illegal refineries and oil theft are taking a toll on the environment in the country. A large swath of the coast is under a toxic blanket of oil. Illegal refineries burn off the gas produced in oil extraction in an air-polluting practice called gas flaring. Pollution caused by illegal refineries is high at Port Harcourt, the major city in the Niger Delta.

Nigeria's oil industry is well-known for corruption, from the fuel subsidy scheme to the shadowy allotment of exploration blocks. President Muhammadu Buhari, who also acts as Petroleum Minister, has shown little interest in fighting it.

Despite Nigeria possessing the best-equipped army in West Africa, non-state actors are involved in the protection of oil pipelines and other critical infrastructure.

The NNPC awarded a multi-million dollar pipeline surveillance to a former leader of the Movement for the Emancipation of the Niger Delta, Tompolo, who in the past was reported to have been involved in blowing up the very oil pipelines he is now asked to guard.

The massive oil theft is denting the state's exchequer as malnutrition and disease are rampant across the country.

Many, if not most, of Nigeria's children, never had the privilege of seeing themselves inside a schoolroom. Many in Nigeria cannot afford even primary medical care. Malaria, water-borne diseases, and TB, the list of sicknesses claiming the lives of thousands of Nigerians every day is long.

An oil-rich Nigeria could become wealthy and make its people a role model for the entire of Africa if oil theft and the oil mafia are reined in and their black economy is dismantled.