Nigeria loses estimated N995.2bn annually: As report shows how IOCs steal the country’s crude oil

Lagos - By Ebuka Oko

Abuja- A new report on crude oil theft in Nigeria has revealed how International Oil Companies (IOCs) in the Niger Delta region steal and siphon large volumes of crude oil from the country undetected by her management.

The report revealed the revenue losses annually to oil theft over the last few years is estimated at over N995.2 billion.

According to the report, various strategies used include small-scale pipeline tapping, bunkering and over lifting.

While all three types of theft are not mutually exclusive, they each have different sources, actors, markets, and revenue streams.

Although the report carried out by Nigeria Natural Resources Charter (NNRC) did not quantify how much oil IOCs often steal from the country, it, however, explained that when they do, they always resort to a high-wired network of onshore and offshore operators, sellers, financiers, as well as logistics and security firms to pull it through.

The report, according to THISDAY, explored the political economy of oil theft in Nigeria, its causes, dimensions and efforts to curb the practice, which have largely been unsuccessful.

It reviewed previous discussions on oil theft and some of the key recommendations that have been made on addressing the issue, and contextualized the problem, and types of oil theft that occurs in Nigeria.

The report said, “There are several categories of oil theft in existence; small-scale pipeline tapping, bunkering and over lifting. While all three types of theft are not mutually exclusive, they each have different sources, actors, markets, and revenue streams.

“They have seen increased cooperation on ground as profits soared with little deterrence from enforcement agencies. Several investigations have high­lighted the complicity between state actors, oil companies and militant elements in all categories of theft.”

The report stated that over lifting is another form of oil theft in Nigeria.

“It refers to the underestimating of the total number of barrels received at any point of the extraction process (but typically after it has been refined) in order to sell the remaining on the black market.

“Underestimation can happen because when oil is drilled and transported via pipelines it also contains sand and water. The sand and water inflate the volume being transported so the refined volume is never equal to the volume received at the refinery,” it stated.

Giving further insight, it said: “Over lifting occurs at tank farms, refineries and distribution centres. Most of these are owned and operated by national and international oil companies.

“These sharp practices have been reportedly going on for a long time and a reason why many assume oil companies are complicit in oil theft.

“The complexity and secrecy behind over lifting makes it hard to track and measure, as the figures for the amount of crude drilled in reserves vary widely.”