Nigeria relies on crude oil for more than two-thirds of its earnings and about 90% of foreign exchange income, but massive theft in the country’s oil-rich heartland is draining national revenue.
Nigeria’s military seizes several drums of petroleum products during a raid on illegal refineries in Niger Delta, Nigeria
Crude oil sales that boost Nigeria’s foreign exchange earnings have dropped because of oil theft and pipeline vandalismImage: next24online/NurPhoto/picture alliance
Nigerian authorities have beefed up efforts to thwart the theft of crude products in the West African country’s oil-rich Niger Delta region.
Large-scale oil theft from pipelines and wells has been one of Nigerian President Bola Tinubu’s biggest challenges, damaging government finances and limiting Nigeria’s output and exports.
Nigeria, Africa’s top economy and major oil producer, lost about 620 million barrels of crude oil — valued at $46 billion (€42 billion) — between 2009 and 2020 alone, according to the Nigerian Extractive Industries Transparency Initiative, an organization that promotes accountability in the management of the nations’s oil, gas and mining revenue.
Is Nigeria doing enough?
Nigeria’s oil workers union in April asked Nigerian President Bola Tinubu to deploy more troops to combat the widespread theft from oil pipelines, which, along with the sabotage of onshore pipelines, has forced oil majors like Shell and Exxon to sell onshore assets.
In the same month, Nigeria’s Navy recruited 1,486 personnel to boost internal security operations in the country’s crude production heartland, according to local media sources.
Why oil-rich Nigeria can still not fuel its economy
Nigeria’s Chief of Naval Staff, Emmanuel Ogalla, told DW that the Niger Delta operation aims to reduce oil theft and increase crude output in order to improve the country’s economy.
“Mr. President has given us a matching order to conduct our operation to eradicate this menace of oil theft and without any restrictions,” he said, adding the eradicating oil theft was non-negotiable.
“With the recovery of massive quantities of stolen crude oil products, dismantling of illegal refining sites, arrest of suspects, all [of] which has underscored the resolve of the Nigerian Navy to stamp out crude oil theft,” Ogalla told DW.
Nigerian oil and gas management analyst Aminu Ghandi told DW that oil theft is becoming very lucrative for perpetrators.
“So, you see there is serious revenue leakage, oil theft is having a multiplier effect on the Nigerian economy and thus, the value of Nigerian currency is always going down because of the high demand of dollar by these criminals that takes our oil illegally,” said Ghandi.
Who is stealing the oil?
Most of those involved in carrying out the oil theft are young people, many of whom are unemployed and looking to improve their livelihoods.
But commanding officer of the anti-oil theft operation, Captain Maksum Muhammed, told DW that these young people risk being arrested and prosecuted.
“To those that engaged in this illegal activity, we will not relent in our effort to hunt you down, discover you, find you wherever you are and continue to disrupt your activities and dislocate you to a point where we can deny you total freedom of action in carrying out these activities of economic sabotage against the country,” Muhammed said, urging “those involved in this activity to consider another line of occupation.”
A deep hole dug by vandals to steal oil from pipelines belonging to the Nigerian National Petroleum Company (NNPC)A deep hole dug by vandals to steal oil from pipelines belonging to the Nigerian National Petroleum Company (NNPC)
Vandals damage oil pipelines to allow crude pour into makeshift holesImage: Pius Utomi Ekpei//AFP/Getty Images
Incentivizing the thieves
Some of the oil thieves are suspected members of militant groups.
The Nigerian government in 2022 awarded a pipeline protection contract to Tompoloa former miltant — a controversial move, according to DW correspondent Mohammed Bello, who reports about the Niger Delta region.
Bello said that to end the menace, Nigerian authorities should consider engaging a broad section of militant groups across communities where the thefts take place.
“The best thing is for government to look at the entire region, look at the various communities there and the youth, bring them together so that there would be a kind of collaborative work,” he said, suggesting that authorities could perhaps incentivize the groups by offering them a share of the oil they helped recover.
With the total value of crude oil lost in the Nigeria reportedly higher than the size of the country’s foreign reserves, in it is inevitable that tackling the phenomenon is crucial.