TIME TO CONFRONT THE OIL THIEVES  

  Oil thieves bleed the economy. The authorities must impose stiff sanctions on those complicit to serve as a deterrent

Last week announcement by the Nigerian National Petroleum Company Limited (NNPC) that an 800,000-litre capacity vessel with a large amount of stolen crude had been impounded and destroyed is worrying. According to the NNPC, preliminary investigations revealed that the crude oil on-board was illegally sourced from a well jacket offshore Ondo State and had no valid documentation. The pertinent question remains: Who are those behind this heist of the country’s commonwealth and what are the authorities doing to bring them to justice? That task is even made more difficult with the destruction of the intercepted vessel that should provide the evidence in any trial. 

To be fair, some gains have been recorded since the ‘onslaught’ against these economic saboteurs. From September last year when the country recorded a production of about 900,000 barrels per day, the lowest in decades, Nigeria’s output has gradually climbed to roughly 1.25 million bpd in June this year, according to the latest data from the Organisation of Petroleum Exporting Countries (OPEC). But the volume remains a far cry from Nigeria’s production target, which currently stands at 1.742 million bpd, meaning that our country is still unable to produce as much as 492,000 barrels every day. Revenue from this deficit could go a long way to ameliorate the current illiquidity in the foreign exchange market. To add insult to injury, OPEC has also recently slashed Nigeria’s production baseline for 2024 to 1.38 million due to the country’s prolonged inability to meet its monthly target. 

Even though there are no recent statistics, Nigeria has for a long time topped the countries with incidents of crude oil theft in the world. As of 2014, when the problem wasn’t even so menacing, data released by oilprice.com ranked Nigeria worse than Mexico, Iraq, Russia, and Indonesia among the top five countries mostly plagued by oil theft. Between 2008 and 2018, according to a report by the Nigeria Extractive Industries Transparency Initiative (NEITI) in 2019, $38.5 billion worth of crude oil was stolen from the country, with an average of $11 million lost daily. NEITI also noted that while official figures claimed that between 150,000 and 250,000bpd of oil was stolen from country daily, data from private studies estimated that the case was between 200,000 and 400,000bpd stolen.  

To stop the theft of Nigeria’s crude oil, the nation must be willing to undertake a thorough overhaul of its security agencies deployed in the Niger Delta, the NNPC and its partners and fish out the so-called bad eggs among them. Any personnel of the national oil company or the security forces found to be complicit must not only be sanctioned privately but should be made to face the full wrath of the law to serve as a deterrent.Since a large portion of Nigeria’s crude oil is transported on internationally registered vessels, sold to international buyers, processed by international oil refineries, and paid for using international bank accounts, the Nigerian authorities must also intensify diplomatic collaboration with such nations to stem the problem that has plagued it for a long time. 

President Bola Ahmed Tinubu has shown indication in his first six weeks that the economy is a priority. That has created some excitement for both local and foreign investors. But without fixing the oil and gas sector, it is doubtful if the president can achieve much.

As we have consistently argued on this page, while oil theft poses great danger to our economy and our security, it is also evident that the problem persists because there is some form of official complicity in what has become an organised crime.

We hope the president will confront that menace. Aside the loss of enormous revenues, the security implications of these criminal activities are better imagined against the background that a huge chunk of the proceeds are reportedly used to buy arms. 

It is therefore time for the authorities to take serious interest in unmasking who these criminals are, checkmating them and bringing them to book.