NIGERIA: Under-development continues to fuel oil theft

Monday, November 17, 2008

Crude oil smuggling continues unabated in the Niger Delta in southern Nigeria, spurred by chronic under-development, a disaffected youth, and increasing lawlessness.

Mohammed Umar, an Abuja-based oil industry analyst, estimates that at least 100,000 barrels of oil are stolen every day through the process known as bunkering, while Human Rights Watch says it could be as much as 300,000.

As late as 14 November the Nigerian military arrested 22 people on a boat in the Delta on suspicion of stealing thousands of tonnes of crude oil, according to Lieutenant Colonel Rabe Abubakar, military spokesperson in the region.

The Niger Delta, a vast wetlands region, sits atop more than 30 billion barrels of top-grade oil and substantial gas deposits, but it is one of the most impoverished regions in Nigeria, according to the UN Development Programme.

Abubakar said militants and members of local criminal gangs operate hundreds of illegal refineries in the Delta, where they refine oil to sell locally or to ships waiting offshore to transport it to the global market.

Chronic under-development

Much of the oil-bunkering is driven by local militants who, angry at under-development in the region, have taken up arms to demand a greater share of Nigeria’s oil wealth, according to Sofiri Peterside, a Niger Delta researcher in the regional capital Port Harcourt. Militant groups are made up primarily of unemployed youths who have few opportunities to earn a living wage, Peterside said.

According to Finance Minister Shamsudeed Usman since the 1970s Nigeria has produced more than US$300 billion worth of crude from the Delta region. Just 13 percent of the region’s oil revenues return to the Delta’s local economy, according to a 2005 UN Development Programme (UNDP) study.

“Inside the Niger Delta, we don’t see petrol, diesel or kerosene. We don’t see coal tar to tar the roads,” said a local rebel commander known as Tompolo. “We are refining petroleum products to help our people to get light, fuel to cook, even use it to tar our roads. Let them leave us to refine our oil.”

All sides profit

Bunkering has enabled rebel militias to amass money, influence and arms to the degree that they often outgun the military, militia members claim. “The military is no match for us when we mean to confront them,” the militant group Movement for the Emancipation of the Niger Delta (MEND) said in a 14 September press release announcing an "oil war" against military troops.

Local residents say members of the Nigerian military also profit from bunkering. Omolubi Nuwuwumi, a member of the Waterways Security Committee – a local government-run body investigating kidnapping, which is also widespread in the Delta – told IRIN some members of the military moonlight for the criminal gangs or rebel groups, “if the price is right”.

“The soldiers are deeply involved. There is no bunkering activity that is taking place in the Niger Delta that the military is not involved in,” Nuwuwumi said. “Eighty percent of soldiers in the region own the best cars – these are people who did not own a motorcycle before coming to the Delta.”

The military acknowledges that a few soldiers might be involved but insists it is addressing the matter. ”There are good and bad eggs in the army,” military spokesman Abubakar told IRIN. “But the commander is out to check the activities of those involved in illegal bunkering. Whether you are military or civilian there is no exception.”

Risky business

Researcher Peterside said the potential wealth from crude oil smuggling feeds the state of lawlessness in the Delta.

Bunkering groups may use money or intimidation to win over community leaders, he said, and fights over ‘bunkering turf’ often foment inter-communal violence. Peterside estimated that so far in 2008 up to 1,000 people have been killed in clashes in the Delta.

Representatives of oil company Royal Dutch Shell, which has dominated oil excavation in Nigeria for over 50 years, warn that the unrelenting scavenging for fuel has grave implications both for the industry and local communities. “Fires easily break out when crude methods are used to tap into the oil pipelines,” Joseph Ollor-Obari, Shell spokesperson in Wari, told IRIN. “There have been several instances where charred bodies are all that were left to tell the story of a failed attempt to tap into the pipelines.”
Since 1998, thousands of people have burned to death in southern Nigeria when ruptured fuel pipelines caught fire.

Ollor-Obari said: “Valves are welded into active pipes conveying crude oil and other products. Once the new tap is in place, the product is siphoned through hoses or pipes and into containers that are transported in boats. Sometimes the thieves use barges that can contain up to 100,000 tonnes of fuel.”

The scale of oil theft is also resulting in serious environmental damage. Nigerian Environment Minister Halima Alao said at a press conference in September 2008 that Nigeria recorded 1,260 oil spills between 2006 and June 2008, 419 of them in the first half of 2008, reflecting a “progressive trend” of theft and sabotage.

“Impossible to stop”

Military spokesperson Abubakar told IRIN the authorities are making some progress. “Just this week we destroyed 180 illegal refineries at Okogbe and Egbe Ede. We destroyed 30 metal storage tanks, 800 drums filled with diesel, and 1,000 empty jerry cans,” he told IRIN. He said the military has helped destroy 300 illegal refineries since April 2008.

Military gunboats have been positioned throughout the region to block waterways and restrict passage for smugglers vessels, he said, and the government has deployed thousands of troops in recent years in the Niger Delta to check bunkering.

But with oil pipelines criss-crossing the Delta over thousands of kilometres, it is nearly impossible to stop illegal tapping, said militant chief Tompolo.

Some residents say it is a mistake for the government to address the bunkering issue as a security rather than a development problem. “There cannot be a military solution to the crisis in the Niger Delta,” said Ebi Okrika, a local philanthropist. “We have seen numerous crackdowns by troops over the years and yet the violence has not abated. The Delta needs jobs, schools, electricity and roads…There is [no development] happening in the Delta…It remains under-developed and desperately poor.”