Crude Reality: Combating Oil Theft in Nigeria for Sustainable Development

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By Cecilia Attah

Nigeria, which is often referred to as the “Giant of Africa possesses abundant oil reserves, a precious resource that should drive the country’s growth and development, yet beneath the surface of this wealth lies a pressing problem that has significantly hindered the country’s growth: oil theft.

The problem of oil theft and pipeline vandalism has become a source of national shame and humiliation in Nigeria.

Oil theft is a major problem in Nigeria, with varying estimates ranging from 200,000 to 700,000 barrels per day lost to pipeline theft and vandalism, this represents a loss of between 10% and a third of Nigeria’s total oil production.

According to the Nigerian Extractive Industries Transparency Initiative (NEITI), oil theft caused Nigeria to lose 619.7 million barrels of crude oil worth 16.25 trillion naira ($46.16 billion) between 2009 and 2020.

Oil theft in Nigeria has increased in recent years, and several factors contribute to this menace.

Unemployment and poverty are the main reasons for the increase in criminal activity, due to the scarcity of employment opportunities, many people resort to illegal means to earn a living.

Corruption within the government and security forces often leads to inadequate law enforcement and regulation, creating an environment in which oil thieves can carry out their activities without consequences.

Limited access to quality education limits awareness and understanding of the long-term consequences of oil theft, education plays a crucial role in shaping attitudes and behaviour towards illegal activities.

Inadequate laws and weak enforcement mechanisms fail to deter potential vandals, stricter laws and efficient legal processes are essential to effectively curb this menace.

The government must address these causes if it wants to reduce the rate of oil theft, Illegal bunkering, pipeline vandalism and crude oil theft result in the country losing billions of dollars each year. These losses directly affect government revenues and lead to budget constraints.

Funds that could otherwise be used for essential public services such as healthcare, education and infrastructure development are diverted, perpetuating a cycle of poverty and underdevelopment.

Just recently, Defense Headquarters reported that troops from Operation Delta Safe in the Niger Delta region discovered and shut down 53 illegal refinery sites, recovered stolen products and arrested 19 suspected oil thieves.

The number of oil thefts is on the rise, which is why the House of Representative, Philip Agbese of the 10th Assembly moved a motion in July calling for an investigation into the oil theft and loss of revenue by the Nigerian oil and gas company.

In 2022, the Nigerian oil authorities launched a mobile application called “Crude Theft Monitoring Applications”. The purpose of the application was to monitor crude oil theft in the country.

It is designed for members of host communities residing in oil-rich regions to provide them with the opportunity to report incidents early and prompt immediate action by relevant government and security authorities.

However, there is currently no current report on the effectiveness of the app in curbing oil theft.

During the launch of the application, Mele Kyari, Group CEO of NNPC Limited, disclosed that Nigeria suffered a huge loss of $4 billion due to oil theft in 2021, at a daily rate of 200,000 barrels. He also acknowledged that curbing pipeline vandalism in the country has become more difficult than ever.

The Nigerian government has implemented several measures to combat crude oil theft in the country. One of the latest measures is the adoption of the Nigerian Upstream Petroleum Measurement Regulations 2023 and six other regulations to combat crude oil theft and inaccurate measurements. In addition, the National Agency for Science and Engineering Infrastructure (NASENI) has announced its plan to introduce technologies to combat bunker and oil theft, also former militants from the Niger Delta region were recruited to protect the facilities.

Addressing/solving the problem of oil theft in the Niger Delta region requires a comprehensive approach. This approach should include government oversight, social programs and technological solutions. The government should strengthen its oversight of vast pipeline fields and introduce regulations to address cases of inaccurate measurements. In addition, measures should be taken to reduce oil theft in the region.  On the other hand, social welfare programs should be implemented to combat poverty in the Niger Delta region, which is a major contributor to oil theft.

Technical solutions can be used to prevent the theft of oil and fuel during transport or from tankers. The Intellia IoT fuel theft prevention system is one such solution. In addition, companies such as Saudi Aramco and Norway’s Equinor are using other technologies such as leak detection sensors, acoustic sensors, fibre optic sensors, satellite monitoring, pressure drop analysis and corrosion monitoring to protect their oil and fuel from theft or robbery.

Although Mele Kyari, announced in 2022 that the company would adopt Saudi Aramco’s pipeline video surveillance model to monitor the transportation of crude oil from wells to production stations in the Niger Delta. However, despite this initiative, oil theft continues to increase in the region.

Implementing such technological solutions in Nigeria could help reduce oil losses due to theft and damage to pipelines, increase the country’s overall oil exports, and prevent oil spills that cause severe environmental damage in the Delta. Niger.

Oil theft has serious consequences for the economy, the environment and society. Criminals use dangerous methods to extract oil, resulting in oil spills and pollution that damage the environment. These spills contaminate water sources, harm marine life, and damage agricultural land, negatively impacting the local community. The long-term impacts of this environmental degradation are immeasurable and have far-reaching impacts on ecosystems and biodiversity.

Oil theft results in significant revenue losses for the Nigerian government and oil companies and hinders economic growth and development initiatives. This in turn affects the overall standard of living.

Oil-related conflicts and vandalism contribute to social unrest and community displacement, disrupting social peace and potentially leading to violence.

Oil theft not only causes social unrest but also undermines security in Nigeria, illegal oil activities generate money for criminal organizations and militant groups, enabling them to acquire weapons and exacerbating existing security problems.

Furthermore, the illicit oil trade fuels corruption and weakens institutions, thereby undermining public confidence in the government’s ability to address pressing problems.

The impact of oil theft in Nigeria extends beyond national borders, as illegally extracted oil is often sold on the international market through a complex network of brokers and illegal refineries. This oil oversupply undermines the efforts of legitimate oil producers to stabilize prices and poses a significant threat to regional and global security by funding transnational crimes, including terrorism and human trafficking.

The theft of petroleum products from the pipelines of multinational oil companies is facilitated by the lack of government oversight, the profitability of crude oil products and the absence of social welfare in Nigeria.

Oil theft in Nigeria has had an impact on the country’s economy, environment, society and even the global community. The urgent need to combat this problem cannot be underestimated. However, President Bola Tinubu has directed his service chiefs and heads of security and intelligence agencies to take strong action against those involved in oil theft. He stressed that his government would not tolerate such criminal activities.

It is crucial that this government must take immediate and decisive action to end this dangerous trend.

Through concerted efforts at national and international levels, Nigeria can stem the tide of oil theft. This ensures that its vast oil resources are used for the benefit of its people and the world at large. It is only through such collective action and commitment to sustainable practices can Nigeria free itself from the shackles of oil theft and pave the way to a better and more prosperous future.

 

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