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Balkans, Singapore top buyers of stolen oil - expert

23 October 2012, 07:41

Lagos - The main buyers of the 180 000 barrels of oil that thieves steal from Nigeria each day are organised criminal networks in the Balkans and refiners in Singapore, according to a former presidential advisor who launched a campaign against the practice on Monday.

Dele Cole, a politician from the oil-rich Niger Delta, at the heart of Nigeria's two million barrel a day (bpd) industry, told Reuters that 90 percent of oil snatched was sold on world markets, based on estimates from oil firms and the ministry.

Just 10 percent was refined locally by gangs operating in the creeks and swamps of the delta, he said.

Oil companies say so called 'bunkering' -- tapping into oil pipelines to steal the crude -- and other forms of oil theft are on the rise in Nigeria, despite an amnesty that was meant to end a conflict there in 2009 over the distribution of oil wealth.

Yet while local gangs hacking into pipelines to steal small quantities for local refining are the most visible sign, it is industrial scale oil theft involving collusion by politicians, the military, Western banks and global organised crime that is the real drain on Nigeria's resources, he said.

"International theft is diverting huge quantities ... and the sophistication of the exercise -- from breaching the pipeline, to having barges, to knowing when ships are at the port, to being paid -- is major," he said.

Cole, who has passionately argued for a global solution to the problem in the past, opened a campaign on Monday to raise awareness and try to nudge the government into action.

"It's been a problem for a long time, but when it was 50 000 barrels, people thought was tolerable. Now we're at a totally different level," he said.

Nigeria relies on oil for more than 95 percent of government revenues. The figure of 180 000 bpd stolen comes from the upper end of an estimate by Shell, the biggest operator in the country, which frequently complains about the practice.

"Some estimates go as high as 25 percent of oil revenue. The oil companies are going to realise they're working for these bunkerers and the government that its losing revenues to them."

Finance Minister Ngozi Okonjo-Iweala said in May that the government lost a fifth of its oil revenues to theft in April.

Cole said much of the oil sold had been traced to criminal networks in the Balkans, especially Ukraine, Serbia, and Bulgaria, better known for things like cigarette smuggling or trafficking sex workers.

"On the evidence we have, the Balkan mafia organisations are well represented in Nigeria ... You can't chase these guys easily. They're as slippery as the proverbial eel."

Singapore, the world's top refiner, was also taking a large chunk. He urged Nigeria to confront Singaporean authorities.

The 2009 amnesty sharply reduced militancy in the Niger Delta, a network of creeks and wetlands where the Niger river tips into the Atlantic, but bunkering has worsened since then.

Part of what facilitates it, Cole said, is that neither the state oil firm, nor the government nor the oil companies were publishing transparent figures about how much oil they produced, making it much harder to detect missing cargoes.

He called for better metering, accounting of ships coming to and from major oil ports, questioning crews of ships suspected to be involved and cracking down on collusion by the military.

"We want to make bunkering a lot less attractive," he said.

- Reuters


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