UNRAVELING OIL THEFT AND ITS IMPACT ON THE NATION’S ECONOMY

In light of the recent spike in oil losses, the Nigerian economy is currently in desperate need of resuscitation and restructuring. Reports indicate that between 300,000 and 400,000 barrels of oil are lost each year due to illicit theft and the government’s incapacity to control the operations of local criminal syndicates and separatists militants operating within the Niger Delta. However, analysis and claims by the Chief of Naval Staff contradicts the impractical evaluation owing to the distinction between the strategic terms which stipulates oil losses happen when there is known output, particularly during shut-ins and forced circumstances, preventing the Federal Government from earning the revenue it should while oil theft involves siphoning crude oil from vandalized pipes into ships by criminals involved in oil bunkering.

The case of oil theft and oil losses seeks to unveil the disparities in the oil producing process as it remains unrealistic for the transportation of the unspecified amount of stolen crude oil without being noticed owing to the significant presence of security forces tasked with monitoring the Maritime border areas. An alarming example is the arrest of oil thieves on a  3-million-barrel-capacity MV HEROIC IDUN, a supertanker which  fled from Nigeria’s AKPO oilfield when its activities were uncovered by operatives of the Nigerian Navy.

This indicated renewed collaboration among Gulf of Guinea countries, it also unveiled an interwoven criminal web with various culprits which is what we find at the end of the short stick of a $300 million loss within if the ship was not discovered. From irregularities within the chain of command and documentation procedure to the unspecified figures in ascertaining the exact loss, the oil theft and losses the nation suffers is a tragedy in itself.

In hindsight, the allegation made by the President of Nigeria following an interview with Bloomberg on  21 June 2022 which linked the vandalism and Oil theft to the activities of IPOB and its affiliation with international criminal bodies which has led to an upsurge in insecurity within the Oil producing states may seem far fetched and overestimated. This evaluation does not vindicate IPOB activities which has impacted the state of security within the Southern part of the country, however, the consistent losses reveals a more intricate and complex deficiency in the governing bodies, high level security operatives and structures which have enabled a lax and easy access for collaborations with local and international criminal syndicates within the Niger Delta.

An unintentional disparity exists between the actions of separatist groups that dates back to the founding of the country and the struggle for control of the resources in some regions of Nigeria. The belief that the distribution of resources does not match the distribution of revenue within the nation’s budgeting system is one of the foundation for the emergence of separatist groups from an economic standpoint.This has proven problematic because Nigeria depends largely on the extraction of oil, which is the main natural resource present in the country’s south and southeast, notably the oil producing states which consist; Abia, Akwa-Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers state.

Nigeria produces 8% of OPEC’s total daily production and 3% of the world’s volume, making it the world’s 12th largest petroleum producer on the global market (NNPC, 2000). However, the country suffers the greatest loss in petroleum resources as a result of oil theft and oil losses within the Niger Delta region of the nation. According to estimates, 15% of Nigeria’s daily 2.4 million barrels of oil are stolen.

Oil theft, or “bunkering,” happens majorly within the Niger Delta area, however, unaccountability of security forces tasked with protecting the nations reserves and the upsurges in oil theft in recent times goes beyond monetary value and the loss in revenue as another troubling issue remains the health risks to residents. Residents and local governing structures fail to understand that accountability cuts across all the regulatory bodies, as more areas are at risk of the health hazard attributed to pollution from soot and the destruction of the ecosystem which has a long lasting impact. This remains a case of encouraging the small fires and watching the house burn while blaming the flames and not taking actions, at this rate, the responsibility cuts across every actor on the board.

Furthermore, it is agonizing to reveal that in the era of advanced technology which Saudi Arabia has employed in regulating and monitoring crude oil production, our process remains rudimentary for a country where 95% of export revenues is dependent on oil production and the fourth-lowest percentage of all government revenue are derived from oil. In Mexico, which produces a comparable amount of oil, just 5,000 to 10,000 barrels are stolen daily. Given this development, it would be reasonable to infer that the fear of Oil theft would be the main factor affecting the nation’s economy and security; nevertheless, this assumption is invalidated by the loopholes within the oil producing sector highlighting the dismissal of the President’s allegations by IPOB members, claiming an underlying scheme involving high profile individuals and governing bodies in the saga of the ‘’Mysterious case of the stolen oil reserves’’.

The attention has shifted away from the root of the unrest connected to the nation’s riches due to the agitations from concerned citizens. Although militancy has significantly impacted the South South and South Eastern parts of the country, it is within the best interest for the nation at large if the focus is placed on the right questions which may include: Who are the major high level players involved in the oil theft cartel? However, the separatists ideology, which is ingrained in the mind of some minorities and the demand for “resource control” by local activists, has stirred significant tension overtime, It is undeniable that the insecurity in the southern region has an impact on the Niger Delta which is the most noteworthy oil supply source.

From the militancy threat to unbalanced records and crooked officials, there has been a virtual progression from where the indication of the losses begins and where the threats to security and economy of the country ends. Although the business of feeding the nation to  acquire  weapons and ammunition requires a booming investment source, it is only given priority by the resources that militants, criminal syndicates and regulatory bodies hold in their respective areas of interest. Nigeria’s national identity continues to rest on precarious footing.

The nation has suffered enormous losses in oil revenues, estimated at N1.29 trillion annually, due to industrial-scale theft, the exodus of foreign investors and businesses, the degradation of the local environment, the rise in the purchase of light weapons and ammunition, and the high rate of individuals initiated into militancy and terrorism, in addition to unsuccessful measures by government to reverse these negative trends has crippled the nations economy.

The question on the minds of the concerned citizens is if  the threat of insecurity is used as a front for a criminal syndicate invested in expunging the country’s oil reserves or if officials tasked with maintaining national security are two sided in their dedication. A likely solution to this mystery would be to ‘’follow the money, identify the masterminds. Although the result may yield more than bargained for.

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