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Report: Oil Theft in Nigeria Has Worldwide Impact


A man carries oil canisters at an illegal refinery site in Nigeria's oil state of Bayelsa in this November 27, 2012, file photo.

A man carries oil canisters at an illegal refinery site in Nigeria's oil state of Bayelsa in this November 27, 2012, file photo.

In Nigeria, stolen crude oil flows out of the Niger Delta at breathtaking rates, landing in markets in Nigeria and around the world. A new study by London-based think tank Chatham House says it is not just the Nigerian authorities that are to blame.

At a Niger Delta market Anna Arube sells black-market petrol from jerrycans for about 80 cents a liter. She pays the police about $3 a month not to get arrested. Even so, Arube says, the job is not without its dangers.

“They should be careful over this business that we are doing because there is risk, do you understand?” – asks Arube.

The biggest risk is the flammable nature of her product, she says. But there is very little risk of authorities clamping down.

Until 2009, militants in the Niger Delta battled the government and oil companies, saying they were fighting for the people’s right to the oil on their land. Since then, the region has quieted, but oil theft and kidnapping are still rampant.

Oil theft ‘deeply engrained’

A new Chatham House report says 100,000 barrels of oil are stolen daily from the Niger Delta, about five percent of the two million plus barrel per day output. Some analysts put the total amount of stolen oil much higher, at 400,000 barrels a day.

Council on Foreign Relations Senior Fellow John Campbell, a former U.S. ambassador to Nigeria, says the problem is endemic.

“The heart of the matter is oil theft is deeply engrained now in the fabric of the Niger Delta and I would suggest [in] Nigerian life generally," says Campbell.

The report says military and government officials, militants, oil executives, crime rings, and communities all profit from oil theft.

The report adds oil theft in Nigeria impacts economies around the world as big-time thieves launder money in foreign countries and stolen oil disrupts the markets. Foreign buyers, it says, should at least be researching the issue to see what they can do about regulating stolen oil in their own countries.

The report also suggests legal means, like lawsuits and tracking regulation, to slow the flow of stolen oil. But the report also warns many possible actions the international community could take, like sanctions or regulating oil sales, could worsen the situation.

Outside intervention ‘unrealistic’

Campbell says at this time international intervention is highly unlikely.

“It is unrealistic because for the international community to be involved to a greater degree in countering oil theft that’s going to require a very close partnership with the Nigerian government. That is going to require a substantial political will on the part of the Nigerian government,” says Campbell.

The Nigerian government, he says, has other things to do and the military is “stretched thin.”

“The Nigerian government right now is consumed with a jihadist revolt in the north called Boko Haram. It also worries about ongoing ethnic and religious conflict in the Middle Belt. You end up with questions about capacity,” says Campbell.

Nigerian politicians, he adds, are also focused on the 2015 elections, and any disruption in the flow of oil money, both illegal and legal, would impact campaigns, making it an issue many people do not want to touch.

Hilary Uguru contributed to this report from the Niger Delta.
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