An international campaign to end the theft of crude oil and its derivative products from the Niger Delta, in Nigeria, has been launched to further raise awareness about the scale and consequences of the prevalent illicit trade in the region.
Under the auspices of pan- African strategy and communications company africapractice, the Stop the Theft campaign is spearheaded by West Africa chairperson and former Nigerian politician Dr Patrick Dele Cole, an indigene of Abonnema, a small village in the Akuku-Toro region of Rivers state, which has been increasingly affected by crude oil theft over the last 15 years.
“Oil theft has grown from a small-scale localised activity into a huge parallel economy and has become a key factor in contributing to the social deprivation, environmental degradation, militancy and corruption that have become synonymous with the Niger Delta,” says Cole.
He adds that, while the scale of oil theft is open to debate, most observers agree that between 180 000 bbl and 250 000 bbl of oil is stolen daily, which means a loss of up to $10-billion in revenue for Nigeria each year.
“The country’s 2012 Budget is benchmarked against a production level of 2.4-million barrels a day at an oil price of $72/bl. Increasing oil theft not only prevents the federal and state governments from increasing revenue potential but also threatens the country’s ability to finance its yearly budget and, therefore, its ability to deliver in accordance with development goals,” says Cole.
He further explains that, considering the lost revenue associated with production cuts caused by sabotage, it has been esti- mated that Nigeria could lose up to 25% of its potential revenue.
“Given Nigeria’s dependence on oil revenues as a source of foreign exchange, the impact of revenue loss is serious,” says Cole.
He tells Engineering News that political pressure has been mounting in Africa’s top oil economy since the fuel subsidy was stopped in January 2012, causing a nationwide strike that brought the country to a standstill. The subsidy, which kept the fuel price at $0.40/l had cost the Nigerian government $8-billion a year.
“People are angry about government’s perceived mismanagement of the country’s oil resources. “Simultaneously, oil companies operating in the Niger Delta have become proactive in highlighting the issue of oil theft and its economic impact because they have been forced to shut down pipelines as a result.”
Cole says this all compounded the need for an independent campaign that will educate people, act as a unifying platform and push for solutions.
The initial idea for Stop the Theft, which was launched in October last year, was conceived four years ago when Cole, as international relations adviser to former Nigerian President Olusegun Obasanjo, drafted a plan to tackle the scourge of oil theft.
In the plan, he points out how vital the international community’s contribution is in stopping the theft.
“It was clear that, for effective solutions to be implemented, oil theft needed to stay on the agenda and the only way to ensure this was to launch a campaign with the ability to maintain momentum and apply pressure wherever necessary,” he says.
Sociopolitical and Environmental Impact
Oil theft in the Niger Delta has had a significant impact on the local community, where fatalities and environmental pollution are commonplace.
Cole emphasises that the region’s community has not benefited from the oil produced on its doorstep – the community has no electricity, water or jobs.
“In many ways, oil theft has been a response to these issues, but it has unfortunately reinforced them as well. Moreover, local communities have suffered, owing to the environmental damage caused by oil theft and illegal refining.
“Simultaneously, the riches associated with oil theft have lured young boys away from education, bringing further instability and militancy to the region which, in turn, means investors are reluctant to provide much-needed financing [for the industry].”
From an environmental perspective, Cole reports that the Niger Delta is home to about 31-million people. It is considered to be one of the world’s most important wetland and coastal-marine ecosystems, but has also been called one of the world’s worst man-made environmental catastrophes.
Cole cites a recent United Nations Environment Pro-gramme study of the environmental damage caused by oil spills in Ogoniland, a small region within the Niger Delta. The study, which was published in August 2011, indicated that it would take 25 years and $1-billion to clean up the region.
“The tapping of pipelines on an industrial scale across Ogoniland and the use of stolen oil in illegal refineries contribute significantly to the environ- mental damage in the region, although the percentage of oil spills caused by oil theft is open to debate,” he says.
Cole believes oil theft is an obstacle to resolving environmental issues because a full-scale clean-up operation cannot be implemented while the illicit trade continues.
How International Community Can Help
Every oil type has a distinct DNA signature, allowing its origin to be determined by a simple sample analysis. Cole explains, however, that the international oil distribution system is complex and oil from many different sources is mixed into shipments that are dispersed worldwide.
He highlights various ways to combat this.
“Firstly, research has been conducted on the viability of attaching a chemical tag to Nigerian oil, which means it can be quickly identified. “This will require international cooperation and a formal framework for a consistent analy- sis of shipments at oil refineries worldwide.
“Secondly, regulation can be improved to ensure that shipments from Nigeria are required to have more detailed documentation to enter the international system.
“Thirdly, oil tankers can be tracked to identify the first point of transfer.”
Neither an international requirement to chemically tag oil, nor any form of systematic international satellite monitoring of vessels suspected of shipping stolen oil currently exists, Cole says.
He believes, however, that these types of solutions need to be developed on a global scale, but says to implement any of these solutions will require endorsement from stakeholders.
“Immediate short-term solutions centre on technological solutions, such as satellite monitoring. “This requires commitment from local and international stakeholders to implement a common course of action once the information has been acquired. Stop the Theft advocates an integrated and holistic approach to this challenge, rather than applying individual solutions,” says Cole.
He adds that, in the long term, the initiative needs to be enforced by policy and regulatory changes in Nigeria.