Since the discovery of crude oil at Oloibiri, Delta state Nigeria in 1956, Nigeria became a major oil producing nation and by 2012 was the largest oil producing nation in Africa and the sixth largest in the world.though in recent years, Piracy And Oil Bunkering in Nigeria imparted badly to her economy.
There are eighteen international crude oil companies in Nigeria, these companies include Shell, Mobil, Texaco, Total, Chevron, and many others.
They account for about 90% of Nigeria’s crude oil production. These companies operate in partnership with the federal controlled Nigeria National Petroleum Commission (NNPC) in which the NNPC grants concessions to the oil company in return for a share of the product while the oil companies operate the blocks.
However, this situation has changed as Angola has managed to overtake Nigeria as the leading oil producing Nation in Africa today, this is because crude oil theft also known as illegal oil bunkering accounts for about 10% of Nigeria’s daily oil production and is a highly organized and financed operation.
This theft is a highly sophisticated operation in that the oil thieves tap directly into pipelines away from oil company facilities and connect into big ships hidden in big ships, often times, the police and military also involve in this process or paid to turn a blind eye to these nefarious activities of pirates or oil bunkerings.
The oil can also be stolen by gaining illegal access to oil wellheads and by forging false documentation to lift surplus amounts of crude oil past the approved quantity. Uncontrolled oil bunkering is endemic in Nigeria due to the failure of the government to build and maintain efficient domestic refineries.
Crude oil theft is probably the most profitable private business venture in Nigeria and militants and other economic saboteurs often fund their asymmetric war against the state through the sale of the stolen crude.
Other factors aiding this operation are the corrupt activities of the marine police, ill-equipped naval force and the inability of the Nigerian Maritime Administration and Safety Agency (NIMASA) to efficiently patrol the large porous coastal creeks littered with long stretches of unprotected pipelines. Rampant corruption among the police and armed forces often reported and the diversion of Nigerian security resources to the threat in the North means little attention is given to thorough policing of affected waters.
Nigerian crude oil production stats 2016
In the year 2016, the country’s crude oil production dropped from 2.2millions barrels per day to 1.4 million barrels per day.
The rise in piracy and oil bunkering in Nigeria could also be attributable to the widespread poverty and corruption prevalent in the country, coupled with high youth unemployment and regulatory uncertainty in the oil sector of the economy.
Oil in Nigeria is being stolen at a record rate and Nigeria has been rated the most challenging maritime situation in terms of maritime security.
With about 400,000 barrels stolen daily, most incidents of these thefts occur in Nigeria’s inland or territorial waters, however, recent reports suggest that gangs now venture further to sea including to the waters of neighboring countries.
The rise in oil thefts and piracy off Nigerian waters suggests that there is an existing and thriving black market for crude oil.
With the government subsidy encouraging illicit activities ( The government subsidy encourages oil thefts indirectly because of the illegal exportation of refined petrol to nearby countries where crude oil products are more expensive) the problem will be a long-term one.
The justification for the crime
Oil bunkering often financed by wealthy and elite people with top government and political connections, they have underlings who are always local, unemployed and uneducated youths who participate in these acts because they believe they have been abandoned, marginalized and sidelined and so this is a chance to get their slice of the national cake.
Water and Environmental Pollution
There is also the fact that oil spills and pipeline leakages have greatly destroyed the ecosystem of the Niger Delta and so normal farmers and fishermen can no longer go about their day to day fishing or farming activities.
The Impacts on all these activities;
Various experts have estimated the volume of oil theft at between 100,000-250,000 barrels /day and as much as 91million barrels yearly.
Individuals involved in these acts do not reinvest in oil exploration or production, rather after settling all principal parties involved in the crime, the bulk of this money is diverted outside the country into international bank accounts of the beneficiaries thereby depriving Nigeria of much-needed revenue.
With the country losing over 180,000 barrels per day to oil thefts, oil and gas production could be cripple if left unchecked.
The rising incidents of oil bunkering and piracy causes economic losses to the international oil companies operating in Nigeria.
Several of the big international oil companies have been counting heavy losses as a result of these thefts, the surge in oil thefts has greatly reduced their earnings and money that could have spent on other areas of oil exploration is being used to repair pipelines and clean up oil spills.
Failure to tackle this worsening situation could also be a threat to national security due to the proliferation of illegal arms and ammunition amongst militant and rebel groups resulting in kidnapping and rioting.
Another negative impact of this activity is that several areas in the Niger Delta have become flooded with oil as a result oil spill associated with illegal bunkering. Massive oil spillage causes environmental degradation and pollution and threatens wildlife conservation.
Environmental degradation caused by oil spillage and the rise in criminal activities could result in massive displacements and migration of people living in the affected areas in the Niger Delta to safer regions of Nigeria or nearby countries.
Impacts to Maritime sector
So far, a lot of foreign shipping companies who operate in Nigeria waters have left the country, since the raising of sea piracy.
These also have left must Nigerian seafarers unemployed and could lead to more creams.
Efforts from the Nigerian government
According to the recent developments, the Nigerian government has been putting more efforts to help the matter by a deployment of more security agencies, security equipment, in other to arrest these activities and as well bring back foreign investors. But however, the need to double check the security agencies should also be considered.
Increasing the salary and welfare of the security agencies may add more motivation to stop them from looking outside for more money. The law is for everyone and should not be limit to some individuals who are on the government top offices.
Hopefully, these efforts will be enough to crack down the cream and bring back calmness, economic growth, and employment of the youths.