Market News

BY  Nigeria steps up fight against illegal oil trade

Nigeria's military and security forces have dismantled illegal oil bunkering sites in a decisive blow against illegal trade. But can this bold crackdown lead to a permanent end to economic sabotage?

Nigeria's military and security forces have delivered a crushing blow to the shadowy illegal oil trade. By dismantling 56 bunkering sites, authorities are attempting to drain the lifeblood of this underground economy.

Despite being Africa's biggest crude oil producer, Nigeria has faced significant setbacks due to large-scale oil theft and pipeline sabotage. These issues have slashed output, reduced exports, crippled government finances, and posed a serious challenge for President Bola Tinubu. 

In a recent crackdown, the country's army and other security agencies have also seized at least 88 cooking drums and recovered 1.2 million liters (317,000 gallons) of stolen crude oil. Authorities have destroyed at least 15 illegal refining sites in the Okorodia forest of Yenagoa, Bayelsa state. Thousands of liters of stolen crude oil and illegally refined automotive gas oil were also recovered.

Seventeen suspects were also arrested and vehicles and oil refining equipment seized.

Between 2009 and 2020, Nigeria lost approximately 620 million barrels of crude oil, valued at $46 billion (€42 billion), according to the Nigerian Extractive Industries Transparency Initiative, which promotes accountability in managing the nation's oil, gas, and mining revenue.

Oil theft becoming 'sophisticated'

Oil theft in Nigeria is nothing new, but its scale and sophistication have increased in recent years. The oil-rich Niger Delta is considered the main hot spot.

According to Umaru Ahmadu, a financial consultant on oil and gas, oil theft will continue unless the government first tackles social and economic justice in the region. He told DW that successive governments had neglected the residents in the oil-producing areas.

"They don't have the infrastructure, they don't have the basic social and economic support. There are no social safety nets. They've lost their means of livelihood. Their environment has been jeopardized and obliterated completely," he said.

Ahmadu believes that as long as the government continues to extract the mineral resources without caring for the local community, "the chances and the propensity to continually sabotage the government by stealing crude oil by refining in an illegal refinery would not stop."

"As long as we continue to pay lip service to their issues and nobody is interested and we just come extract their crude oil, destroy their their environment and they don't get any reasonable financial reward, They will always resort to self help through either stealing the crude or refining it illegally," Ahmadu stressed, adding that by addressing these issues, the government can find a lasting solution to the problems caused by crude production.

Keeping the authorities accountable

Benjamin Boakye, executive director at Africa Centre for Energy Policy in Ghana, told DW that the situation in Nigeria is a case of people getting away with crimes and only looking out for money and not responding to regulation and protecting the environment.

Boakye noted that the issue persists because the same politicians and security agencies responsible for preventing environmental pollution and enforcing the law often operate within the same circles.

"Unless there is a political will to clean up the mess and get people accountable. We would just be speaking about this and not get a solution to the bigger picture," he added.

He further emphasized the need to hold people accountable for the power and mandate given to them to protect state resources and ensure that they do not allow individuals driven by profit to destroy the environment.

Impact on the environment

Studies have shown that oil theft has contaminated the air, land, and water, leading to devastating effects on residents' health and livelihoods.

Ahmadu shared similar sentiments, saying that illegal mining significantly impacts the environment "because these guys are not experts; they are not specialists."

"They go about doing this thing in the most crude form. As a result, the environment gets affected," he said. In extreme cases, fire outbreaks have occurred due to oil theft.

 Ahmadu noted that the Nigerian government is losing massive revenue due to the ongoing destruction of pipelines and other oil infrastructure, hindering progress.

Edited by: Chrispin Mwakideu