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Oil Theft Plagues Nigeria

Written By Brianna Panzica

Posted June 27, 2012

Nigeria produces roughly 2.4 million barrels per day of oil, even more than some OPEC nations.

But of that, it loses around 400,000 barrels per day. That’s 17% of its daily production.

This is no accident. The nation has a problem with oil theft so extensive that one man from the town of Abonnema told the Financial Times:

“Every family has someone involved.”

The number of barrels was released by Nigerian finance minister Ngozi Okonjo-Iweala in April. Last year, the nation lost the equivalent of $14 billion.

In 2011 pipeline break-ins skyrocketed. From the last decade’s yearly average of 1,746, it rose to 4,468, the Financial Times reported.

And it continues to get worse. Nigeria’s President Goodluck Jonathan has been working to clean up the theft, called bunkering, with little progress.

Some have criticized his actions, including the appointment of former bunkering leader Government “Tompolo” Ekpumopolo. But he has also been proactive, firing senior oil officials from the Nigerian National Petroleum Corporation (NNPC) in an effort to cut the issue off at the source.

Oil bunkering can range anywhere from gangs poking holes in pipelines to carefully extracting oil from export terminals. The resources obtained are often sold at a discount on the market.

And it requires a network of people, including higher-ups, to carry out.

From the Financial Times:

“They have been sponsoring local government chairmen. The chairmen have also been sponsoring governors. These people, if not checked in time, will one day produce the president of Nigeria,” Austen Oniwon, managing director of the state oil company NNPC, said recently.

And yet it’s been extremely difficult to stop. For one thing, there’s a discrepancy over how much is actually being stolen. Royal Dutch Shell had lower estimates than the finance minister, reporting somewhere between 150,000 and 180,000 bunkered barrels per day.

And for another, the network runs deep. People are involved all over the nation.

Sadly for the nation of Nigeria, there is no end in sight for this network of criminal activity, a network that may be too deeply rooted to extract.

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