Oil theft in Nigeria

The illicit trade is blooming in Nigeria, where regulations are few.


Nigeria's oil-rich Niger Delta region is losing its battle against organised oil theft. According to the managing director of the Shell Petroleum Development Company, Mutiu Sunmonu, oil theft by local groups currently results in a total of $6bn per year in lost revenue to the corporate giant. Other major oil companies have also said they were losing a huge amount of money due to oil theft, and are paying huge amounts for security.

The "blood oil" industry, a term coined by Nigerian President Goodluck Jonathan, is reportedly run by armed groups as well as activists calling for a fairer distribution of the country's enormous oil profits. The majority of Nigeria's 160 million citizens live in poverty - despite being residents of Africa's biggest oil producer.

Zoin Ibegi is a resident of the region. "Many of us live [on] less than one cent a day despite being blessed with crude oil," he said. "This forces many of us into the illegal refinery business because we can't continue in poverty."

The Nigerian government has deployed soldiers to the restive region to eradicate these "firewood distilleries", as they are commonly known. When an illegal oil refinery is located, those involved are arrested and the refinery is burnt down. According to Onyema Nwachukwu, a spokesman for Nigeria's Joint Task Force, such methods are used in order to make it difficult for perpetrators to return to the illicit oil extraction trade.

In 2009 an amnesty was declared, paying off people who had been engaged in "oil bunkering": stealing and selling oil, then sharing the profits with the community.

However, the siphoning of oil and makeshift oil refineries are only part of the problem. Oil-producing areas also suffer from high levels of pollution, and Ibegi says the liquid often spills into rivers used for fishing.

Many observers believe that the 2009 amnesty is not working, claiming it is just a way to buy off "troublemakers". They argue that ultimately, the core problems affecting people in the Niger Delta - poverty and inequality - have not been addressed.

Follow Tife Owolabi on Twitter: @Tifeowoloabi