2015 Elections: Politicians behind crude oil theft

 

The report by London-based Chatham House has revealed, at the weekend, that the ever-growing incidence of crude oil theft resulting in pipeline vandalism in the country has the hands of politicians preparing for  the 2015 general elections.

Chatham House released a 70-page report entitled, ‘Nigeria’s Criminal Crude,’ which pointed out that proceeds from oil theft are allegedly being used by politicians to finance political activities ahead of the 2015 general elections in the country.

The report indicted top echelon politicians and military officers of being in “a complex criminal web that includes foreign oil traders, shippers, bankers and refiners”.

, According to Reuters news agency, the election is one of the reasons for inability of government to record any high-level of convictions.

There are doubts that the authorities in charge have the will to curb this dastardly act.

Hence, the report was “doubts whether anyone capable of curbing it really has the will to do so,” because “the web of beneficiaries of oil theft makes it difficult to stop.”

The report named the United States, Britain, Dubai, Indonesia, India, Singapore and Switzerland as likely money-laundering hotspots which “funds politics in Nigeria, including election campaigns.”

While the likely destinations mentioned in the report were the U.S., Brazil, China, Thailand, Indonesia and the Balkans.

“Lines between legal and illegal supplies of Nigerian oil can be blurry. The government’s system for selling its own oil attracts many shadowy middlemen, creating a confusing, high-risk marketplace,” the report explained.

It is pertinent to restate that billions of dollars are lost to oil theft every year on international markets and much of the proceeds are laundered in world financial centres like Britain and the United States.

Besides, the Minister of Petroleum Resources, Diezani Allison Madueke had insisted that the country was losing approximately 180,000 barrels of oil equivalent daily to oil theft last year.

Currently, Nigeria produces about 400,000 bpd below its capacity, apparently due to theft and pipeline closures.

Earlier on, the International Energy Agency had also said Nigeria was losing about $7bn annually to oil theft but other sources say the activity costs Nigeria’s economy an estimated $5 billion in potential revenue every year.

“Oil bunkering, or theft, costs the government an estimated $7bn in lost revenue per year,” the agency said, adding that theft and sabotage often led to pipeline damage, causing oil firms to cut output”, the agency pointed out.

But an estimated 100,000 barrels per day (bpd) of oil was said to have been stolen from pipelines in the Niger Delta in the first quarter of 2013 excluding the unconfirmed amount stolen from export terminals in the country.

The theft amounts to around 5 per cent of Nigeria’s current two million bpd production but has a wider impact because oil companies are often forced to shut down pipelines due to damage caused by thieves.

The report said a measure of acceptable losses may be keeping the oil companies from taking determined preventive action

“Nigerian crude oil is being stolen on an industrial scale. Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria.

“Thieves have many ways to disguise funds … including cash smuggling, delayed deposits, use of middlemen, shell companies and tax havens, bribery of bank officials, cycling cash through legitimate businesses and cash purchases of luxury goods” ,it was reported.

Madueke, in a statement by Nigerian National Petroleum Corporation (NNPC) at the weekend re-assured that N15 billion has been set aside for adequate policing of oil and gas installations in the Niger Delta region to stem crude oil theft.

The NNPC stated that Madueke has taken some proactive measures which are already yielding results.

“In the wake of pipeline vandalism and crude oil theft which resulted in the shutdown of three major trunk lines, Trans Niger Pipeline, the Nembe Greek Pipeline and the Tebidaba-Brass Pipeline, accounting for shut-in of 400,000 barrels per day

The statement by Acting Group General Manager, Group Public Affairs Division of the Corporation, Tumini Green, said the rise in crude oil production in the country to 2.4 million barrels per day was as a result of the recent action taken by the minister.

Meanwhile, the shutdown of three major trunk lines, Trans Niger Pipeline, Nembe Greek Pipeline and Tebidaba-Brass Pipeline, resulted in shut-in of 400,000 barrels per day, the Federal Government said at the weekend.