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Impact of Oil theft in the Niger Delta

January 4, 2014

Hon Kingsley Kuku, the Special Adviser to the President on Niger Delta, recently organized a conference to discuss the issue of oil theft in the Niger Delta. The event which took place in Lagos brought together the stakeholders to discuss a way forward.  For years now most articles on oil theft have laid emphasis on the cost to Nigeria’s economy, and indeed this cost is enormous. By some estimates, at the peak of our losses, we lost almost four hundred thousand (400,000) barrels per day to oil theft and pipeline vandalism. It must be understood though that this figure represents what the country is losing not necessarily what is stolen. Oil theft invariably entails the destruction of pipelines to effect repairs which cost a lot of money and take a lot of time.  This vicious circle of vandalism is what results into the estimated loss; part of which would, of course, be the actual stolen crude. It is, therefore, difficult to correctly estimate how much is actually stolen. This bleeding of our economy must stop so that we can earn more to fund development all over the country. This bleeding must stop so that the Niger Delta people can fulfill their full economic potential. This obviously is a problem of urgent and strategic national and international importance. However, its impact on the communities of the Niger Delta, on our environment, our health and our livelihood is even more serious. In many communities fishing and farming is no longer possible because of the damage to the environment on which our people depend for their livelihood. The vicious circle is such that the more the environment is destroyed along with prospects for agriculture, the more oil theft and its service activities become entrenched. While several estimates have been made regarding the cost to the national economy in lost revenue and pipeline repairs, no one has calculated the cost to the environment and the livelihood of the people of the Niger Delta. No one has calculated the cost of restoring the environment; but extrapolating from the cost of restoring aquatic life in the Gulf of Mexico following the BP Gulf Coast spill of 2010, the cost to the Niger Delta will amount to more than one trillion US Dollars ($1 trillion).  President Goodluck Jonathan has on several occasions expressed dismay over the increasing oil theft in the Niger Delta. Pursuant to his resolve to stem the ugly tide of oil theft, the president has since energized and empowered officers and men of the Armed Forces, especially the Nigerian Navy as well as the Joint Military Task Force ( Operation Pulo Shield) in the Niger Delta, to tackle head-on these persons who are hell-bent on sabotaging the economy and the environment. I dare say that the gallant officers and men of our Armed Forces and other security agencies have since risen to this challenge and profound results are being achieved. We are aware that several sites of illegal oil refining have been dismantled and destroyed. We are now entering a critical phase in frontally confronting this challenge and there is no doubt that we will triumph President Jonathan has also established a high power committee consisting of key ministers, the security agencies and the governors of states in the Niger Delta. It is the responsibility of all Nigerians and friends of Nigeria to support all Federal Government initiatives to defeat oil theft.  line with Mr. President’s wider strategy of addressing this issue that he commissioned a plan to stop oil theft and its illegal and damaging refining. How can we achieve this? What type of security arrangements would be required? How do we support agriculture? Can we farm the ocean? What kinds of support mechanisms are required to make fishing and farming more attractive and capable of sustaining our people? What other employment generating activities, like small-scale manufacturing and indeed legitimate oil related businesses can support our people and contribute to national GDP? What role would the early passage of the Petroleum Industry Bill play in facilitating an end to this scourge? What is the role of the federal government the state governments and the local governments and communities in implementing this pan? Is there any role for the international community? Would oil finger printing be a viable option? I am confident that if there are answers to these questions we would find them within our midst. I have no doubt that a community-centred approach to stopping oil theft holds many advantages. I urge us all to now delve into the challenge of the day and emerge with a community-led plan that will stop oil theft, restore our environment, employ our people and contribute to Nigeria’s economy. Hon. Kingsley Kuku, the Special Adviser to the President on Niger Delta, has implored Nigerians to join President Jonathan to seek lasting solutions to the ugly trend that adversely affects not just our economy but also our environment. So much has been said about oil theft which is also known as illegal bunkering. This means that if we have illegal bunkering, we also have legal bunkering which is the fueling of ships or vessels. The menace which is almost as old as the oil industry in Nigeria has created more problem to the nation than any other thing.  Findings of the report by Mr. Kuku indicate that oil theft and the illegal artisanal refining of oil is now so widespread that it suppressed the traditional community life. It is also a reality that most of the communities are suffering from ecological and environmental degradation. “Like most illegal economic activities, it hardly takes time before arms, drugs, gangs and other anti-social activities become part of the deadly mix. I’m not sure we are there yet but if we, the community leaders of Niger Delta, and governments at all levels, do not act decisively, we will unfortunately get there soon. “We, of course, cannot contemplate this eventually and must, therefore, move swiftly to support Mr. President to arrest this age-long economic sabotage” advised Kuku.  The illegal business is already undermining our social structures and if allowed to continue, will turn the Niger Delta into ganglands. Already, people in the chain of oil theft are dreaded, revered or even admired as people who are “doing well” in some communities and those at the top of the chain are probably considered as prominent international oil traders by an unsuspecting public. Many vulnerable and impressionable young people now aspire to join this growing but extremely dangerous and certainly illegal and immoral “business”.  Most of the commentary and literature on oil theft laid emphasis on the cost to the Nigerian economy, and indeed this cost is huge. By some estimates, at the peak of our losses, we lost four hundred thousand (400,000) barrels per day to oil theft and pipeline vandalism. This is said to be what the country is losing not necessarily what is stolen. Oil theft invariably entails the destruction of pipelines and once detected would mean the closure of the pipelines to effect repairs which cost a lot of money and take a lot of time. The vicious circle of vandalism, detection repair and back to vandalism therefore, makes it difficult to correctly estimate how much is actually stolen. This obviously is a problem of urgent and strategic national and international importance. However its impact on the communities of the Niger Delta, on our environment, the health and the livelihood is even more serious. In many communities fishing and farming is no longer possible because of the damage to the environment on which people depend for their livelihood.