Oil Theft: Security operatives, government officials run bunkering cartel −Report

*The biggest advantage of the big-time oil theft cartel is having security operatives that provide cover for them on ‘the instruction of top officers for vessels laden with stolen crude’, which sail outside the Nigerian waters to ready buyers with foreign collaborators, says report

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It is not hidden information that a sophisticated mafia of powerful Nigerians and foreigners, including top military operators, government officials, highly-placed and retired oil industry personnel, politicians and business persons are the big-time oil thieves and financiers of oil bunkering syndicates, which over the years have to suck the life out of the country’s economy.

Their oil bunkering cartel working with insiders steal crude directly from major crude oil pipelines in the Niger Delta, while officials pump crude to the different Terminals.

They know the time and duration of pumping and exact pipelines.

Gen. LEO Irabor, Chief of Defence Staff

The damage inflicted by small-time oil bunkers in Rivers, Delta, Bayelsa and other states, who illegitimately refine crude oil in the Niger-Delta region is a child’s play compared to the havoc the connected cartel that owns giant vessels and equipment wreak on the economy.

There are local thieves who also siphon from major pipelines and later sell their product to the big players, who use superior tubes and experts to drain off crude oil.

The biggest advantage of the cartel is that they have security operatives that provide security on the instruction of top officers for vessels laden with stolen crude, which sail outside the country’s waters to ready buyers with foreign collaborators.

Every security officer involved in the business is well ‘taken care of’ and so, secrecy is maintained. Security operatives who mount sentry on waterways also collect levy from small–time bunkerers and many want to serve in such lucrative beat.

They also make returns to superior officers.

An informed source hinted that at least 80 percent of the crude oil being pumped to the oil terminals in the country ends up with big-time oil thieves.

“If you pump 239,000 barrels of crude oil into either of the Trans-Niger Pipeline or the Nembe Creek Trunk Line (these are some of the major pipelines that convey crude oil to the terminals for export), they will receive 3,000 barrels.

“It got to a point where it was no longer economically sustainable to pump crude into the lines and a force majeure was declared,” he stated.

“With security operatives as escorts, they lead them outside the country’s waters and leave the crew and other members to proceed to purchasers in foreign countries.

“The vessels are basically labeled as untouchable in Nigerian waters because of the caliber of the owners, causing the country to lose billions of dollars,” he explained.

Outcries by Shell, Elumelu, others

Shell Petroleum Nigeria Limited, Chevron Nigeria Limited, Nigerian National Petroleum Corporation, as Nigeria National Petroleum Company (NNPC) Limited then was, and others had raised the alarm about sustained and increased oil theft for some period now, but the big-time thieves continued with the Federal Government doing little.

Malam Mele Kyari, Group CEO of Nigerian National Petroleum Company (NNPC) Limited 

Igo Weli, Country Head, Corporate Relations, SPDC, told reporters in Port Harcourt, Rivers State capital, that underprivileged people could not afford the kind of equipment deployed by oil thieves in unabated oil theft and assets vandalism.

“Equipment required to carry out oil theft are so expensive, poor people cannot afford to set up oil theft and illegal refining businesses.

“Only those with deep pockets can and they are killing you and I, destroying the economy.

“If we keep destroying our environment, the type of company that would want to come to this country that will give our children value proposition and contribute positively to our economy will not come. “That is why I give credit to the Rivers State Governor because some months ago, he showed leadership.”

Tony Elumelu, Chairman of United Bank for Africa (UBA) Plc, late 2021, tweeted that the country was losing over 95 percent of its production to oil thieves and recapped his worry about the matter, February.

Austin Avuru, former Chief Executive Officer of Seplat Energy and Executive Chairman, AA Holdings,  also forewarned that Nigeria’s oil production had reached an emergency critical status, recommending that NNPC and regulators should set up a “war room” strategy to deal with the rising issue of oil theft in the country.

Upshots

With the amplified oil theft between 2021 and June 2022, it was not surprising when the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) reported, recently, that the country’s oil output dropped by 12.5 percent to 1.4 million barrels per day, mb/d, including condensate, in the first half (January–June) of 2022, from 1.6 mb/d in the corresponding period of 2021.

Checks by Vanguard showed the oil thieves stole between 200,000 and 400,000 barrels of crude daily during the period.

In 2021 alone, oil thieves caused the country a loss of over $4.01 billion and by NNPC statistics, regular production in 2020 stood at 1.77mb/d, before sliding consistently to 1.6 mb/d and 1.4 mb/d in 2021 and 2022 respectively.

The oil output was relatively high in 2020 when COVID-19 and lock-down that followed hampered the movement of goods and persons from one place to another, resulting to the production of 2.49 mb/d April 17, 2020.

Available record indicated that the rate of oil theft kept rising as the price of crude oil recovered in the market “until March 2022 when there was zero recovery from all the volumes that were pumped into the line.”

It also showed that oil theft “is more endemic with Joint Ventures assets and those that belong to the Independents than with Production Sharing Contracts assets.

“This is likely because of the nature of the JV assets, which are mainly onshore or in swamp/shallow waters.

“This makes the evacuation pipelines more accessible than those of the PSCs, which are offshore and in deep waters.”

Gbenga Komolafe, Chairman and Chief Executive Officer (CEO) of NUPRC, who reportedly described the development as a national threat, stated that the  total value lost for the period spanning January 2021 to February 2022 was about $3.27 billion, as average monthly value loss for the period is about $233.99 million with a daily average of $7.72 million.

Currently, the country is unable to meet the quota of the Organisation of Petroleum Exporting Countries, standing at 1.826 mb/d as of now.

Who are the big-time oil thieves?

If truth be told, the government has not demonstrated tangible inclination to fight the big-time oil thieves, and whatever tough measures said to have been adopted have not put off the cartel.

To proclaim that the cartel is unknown is to stand the truth on the head because government knows the big oil thieves.

But probably paid scant attention to their activities until the nation was terribly hit and unable to meet Organisation of Petroleum Export Countries (OPEC) quota.

A knowledgeable source disclosed that the cartel, over the years, successfully sold a decoy making the Presidency to believe that oil theft was being carried out by small-time oil bunkerers and Niger-Delta militants bent on destroying the country’s economy, and so they must be eliminated, Vanguard report said.

The Presidency believed while the big-time oil thieves continued their business with protection from security operatives.

Senior Special Assistant (SSA) to President Muhammadu Buhari on Media and Publicity, Malam Garba Shehu, recently, said the federal government would soon go public with the identity of highly -placed Nigerians behind oil theft in the country.

Shehu also stated that it was embarrassing for Nigeria not to meet up with the quota given to it by the Organisation of Petroleum Exporting Countries.

The presidential aide said: “Oil theft is being tackled. The big problem we have in this country is that we ought to see more commitment from communities in assisting law enforcement agents.

“In some cases, where some actors in the law enforcement are complicit, it becomes bad.”

He further stated: “We used to fight the OPEC for more quotas; now, they have given us and we are not able to meet up.

“This is embarrassing. Security agencies are fully involved in stopping this act.”

Shehu also noted: “I am hopeful that in the next few days, the office of the National Security Adviser will be presenting to the country, big men who are promoters of this kind of business as they are being caught and illegal refineries are being bombed out.

NNPC’s latest measure against oil theft, pipeline vandalism

“The Nigerian National Petroleum Company (NNPC) Limited is also installing a monitoring capacity to detect or advice immediately when sabotage of oil pipelines happens.”

With the level of oil theft and damage it has caused the country, industry watchers and stakeholders are baffled that the Federal Government was merely threatening to go public “with the identity of highly-placed Nigerians behind oil theft in the country”, instead of arresting them to face the music.

Supposed Military involvement

In 2019, Governor of Rivers State, Nyesom Wike, bravely told the nation that top military men were involved and sponsoring oil bunkering in his state.

He fingered a General Officer Commanding (GOC) who he alerted, had raised a team of soldiers to steal and sell petroleum products in the region.

Not many believed him because they thought he was playing politics, but Wike spoke from information available to him as the Chief Security Officer of Rivers State.

The governor, however, did not substantiate his allegation but what is known is that the big oil thieves have the support of top military generals, who instruct their subordinate commanders in the area of responsibility, AOR, not to disturb his “friends” and the benefits go round.

Policemen and operatives of Nigeria Security and Civil Defence Corps, NSCDC, reportedly clashed in Rivers State over protection of an alleged oil-bunkering site in the state, but both security agencies gave different versions of their involvement in the episode.

Reps raise dust over bunkerers’ escapade

Just as the country’s economy is hemorrhaging, one of the top oil  bunkering syndicates , few weeks ago, audaciously sneaked into the nation’s territorial waters with a  3-million  capacity super tanker, MV Heroic Idun,  to illegally lift crude oil as usual.

Fortunately, the Nigerian Navy, according to report, detected the vessel and kept  track on its movement, but despite  security watch, the bunkerers outsmarted the Navy and fled the country.

Though the authorities said the oil thieves did not achieve their target,  how they outsmarted the Nigerian Navy and sailed to Equatorial Guinea until that country’s Navy apprehended the ship  remains a mystery until date.

However, it was learned their accomplices in the security network reportedly provided cover for the embarrassing escape.

The Minority Caucus in the House of Representatives expressed alarm at the massive oil theft in the country, which has become an organised racket under the All Progressives Congress, APC-led administration, calling for open investigation.

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