Reports have indicated that Nigeria government’s efforts to curtail crude oil theft in the oil producing region has failed to yield the desired results as loses increased from 100,000 barrels/day in 2013 to 400,000 barrels/day in 2023.
The report released weekend is a production of several months of deep investigation carried out by public policy firm, Nextier. It revealed that the large-scale theft of crude oil in Nigeria is made possible by the use of sophisticated networks of powerful actors, foreign buyers, security personnel, transporters, and government officials.
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The report authored by Ben Nwosu, an associate consultant at Nextier and a senior research fellow at the Institute for Development Studies, University of Nigeria; along with Ndu Nwokolo, a managing partner at Nextier and a fellow at the School of Government at the University of Birmingham, also indicated a “worrisome involvement of multiple small-scale artisanal actors and is conducted by locals creating underground economies, often supported by local political and security forces.
The authors noted that Nigeria lost 643 million barrels of crude oil (valued at $48 billion) from 2009-2021 due to theft, more than half of the 2021 national debt, due to this situation.
BusinessDay gathered that while the incident of crude oil theft continues on the upward trajectory, Nigeria’s ability to meet OPEC quotas has been reducing from 2.5 million barrels/day in 2010 to 1.38 million barrels/day, the report highlighted.
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On the home front, Nextier finding also shows high rate of environmental challenges as the
“illegal refining involves risks like uncontrolled heat, poorly designed condensation units, and environmental hazards, causing 285 deaths from explosions between 2021-2023.
“Despite dangers, local refineries thrive due to economic need and government corruption. Nigeria’s four refineries, with a total capacity of 4.45 million bpd, now function at only 6,000 bpd due to corruption and mismanagement” the report indicated.
It further pointed out that massive corruption in oil importation and subsidies, resulted in billions of naira missing or unaccounted for between 2016 and 2019; while government’s inability to support modular refineries ha led to reliance on illegal refineries.
“Interestingly, security forces often collude with thieves, providing protection for a fee; whereas recent interventions, such as the destruction of illegal refineries, have offered temporary relief, but these gains are short-lived as new illegal operations quickly emerge, said the report,” the report revealed.
According to Nwosu and Nwokolo, “the cumulative effect of governance failures, corruption, and the inability to effectively police oil infrastructure has fostered a moral justification for artisanal-level bunkering and illegal refining among local communities.
The report also revealed that to address the complex issue requires ” more than punitive measures.”
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The authors called for a “comprehensive approach that tackles the root causes, including the need for effective governance and economic opportunities for affected communities.”
