Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Oil theft a global criminal enterprise

20 September 2013, 06:27

Lagos - Oil theft in Nigeria is a huge criminal operation affecting companies and states around the world, but interest in tackling the problem is low, Chatham House said in a report Thursday.

The new study from the London-based think-tank, based on interviews with some 200 government, private sector and independent sources, said "Nigerian crude oil is being stolen on an industrial scale."

Estimates on the scale of the problem vary, with some officials saying 150,000 barrels per day is stolen, costing some $6 billion a year in lost revenue.

Chatham House, which also reviewed thousands of documents, said the figure was almost certainly more than 100,000 barrels per day.

"Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria," according to the think-tank.

Few fully grasp the problem and those affected have shown little desire to act, it added.

"In Nigeria, politicians, military officers, militants, oil industry personnel, oil traders and communities profit," Chatham House said.

Cracking down could inflame tensions among powerful figures, particularly in the Niger Delta region, where unrest declined after a 2009 amnesty deal with rebels, but where stability remains elusive.

Despite rhetoric about the scourge of oil theft from Western governments and foreign oil majors, neither camp has fully attacked the problem, the report said.

There is "very little incentive for foreign partners to act, including risk of a diplomatic rift and almost no leverage," in part because of Nigeria's low aid dependence.

Global oil giants like Shell, ExxonMobil, Total, Chevron and ENI all operate in the Niger Delta, but it is "unclear how much export oil" these companies lose, Chatham House said.

"We have never reached the breaking point," one oil executive was quoted as saying. "Something always happens that rights the ship."

Among the majors, Shell has been the most vocal and is likely the hardest hit given its larger presence onshore.

But companies have in recent months sold onshore assets, seemingly to focus on deepwater projects, where the risks of theft and unrest are limited.

The initial stages of Nigerian crude theft are largely known, with gangs tapping into pipelines, pumping crude to smaller vessels which take it to larger ships for international sale.

A certain amount is refined and sold locally.

Chatham House said it was less clear where the illicit crude is taken abroad and how it gets there.

It partly reaches world markets through "co-loading", where stolen oil is put on a ship carrying legal oil. Documents are forged and the vessel departs seemingly laden with legitimate cargo.

The report suggests the United States, one of the largest markets for Nigerian oil, may not be a leading destination for illicit cargo, perhaps because US refineries more rigorously inspect incoming crude.

Refineries in regional markets, including Cameroon, Ghana and Ivory Coast, were listed as likely buyers.

Various sources told Chatham House that refineries in China, India, Singapore and Eastern Europe all purchased stolen Nigerian oil, but the think-tank found little direct evidence to support any specific charge.

The report offered various possible strategies to tackle the problem, but said the priority should be to learn more, including sweeping intelligence gathering involving all those affected.

"Oil theft is a species of organised crime that is almost totally off the international community's radar," Chatham House said.

"Without better knowledge of how the stolen oil trade works, not every government can ignore it with confidence."



Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...