Illegal Oil Bunkering: One Headache too Many

Note: A very interesting read

This Day

8 November 2011

Illegal Oil Bunkering: One Headache too Many

The recent upsurge of crude oil theft, also known as illegal oil bunkering in the country has become an issue that now gives the government, oil producing companies and Nigerians as a whole sleepless nights. While economies of countries, where Nigeria’s illegally bunkered oil are sold thrive on this cheap and illicit oil, that of Nigeria, biggest oil producer in Africa has continued to dwindle, writes Chika Amanze-Nwachuku

The Nigerian constitution provides that all minerals, oil and gas in Nigeria belong to the federal government; therefore the possession of crude oil by an individual or group other than those licensed to lift oil is illegal and punishable under the law. Despite the law in place, theft of Nigeria’s crude oil has been a decade-long issue and in recent time, has been on the increase. Top government officials, the military and some highly-placed Nigerians, including top traditional rulers in the oil producing areas had been fingered as some of the culprits, but till date known of these top politicians or individual has been interrogated or brought to book. Not too long ago, a Nigerian magazine reported that a select group of officials in the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Ministry established “an enduring platform by which they continue to divert crude oil sale opportunity to their preferred middleman at discounted premium leaving enough premium margin for the cabal members when the middle man sells off the crude in the international market”.

Worried about the rising incidents of illegal oil bunkering in Nigeria, the administration of former President Olusegun Obasanjo,  in 2001 set up a Special Security Committee on Oil Producing Areas to among others, identify the causes, possibly those behind the act and then proffer solution to the problem.  The committee, in its report had noted that a “major threat to the oil industry arises from activities of a 'cartel or mafia', that comprises highly placed and powerful individuals within the society, who run a network of agents to steal crude oil and finished produced from pipelines in the Niger Delta region”.

It also observed that militant groups responsible for halting or diverting oil production and preventing free traffic on the waterways "could be enjoying the patronage of some retired or serving military and security personnel”. The report also revealed that some vessels used in the sordid deal were often seized by the army and navy, while their cargoes remained unaccounted for.