Oil Thieves Steal $1.5 Billion Yearly in Nigeria

A director of the Shell Petroleum Company in Nigeria revealed at a conference that oil theft is costing the company and the country tremendously.

“Even with low oil prices, the (Nigerian) government loses between $1 billion and $1.5 billion every year to crude theft,” Mutiu Sunmonu said at the Abuja conference. Nigeria is one of the top producing oil nations in the world with hundreds of miles of oil pipes used for transporting crude.

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Those pipes are hard to monitor and thieves routinely tap into them to siphon off oil which they exchange for cash. Sometimes very long hoses are inserted into the pipes. The hoses transport oil to swamps where the oil is offloaded to waiting boats, and then taken to illegal bunkers.

Increasingly, oil theft has taken on a sort of management structure backed up by weaponized gangs. The gangs are more organized, and don’t settle for only tapping pipelines. They go to the wellheads and steal large enough quantities to have their own oil refineries. They also have hired laid off employees from Shell Petroleum to manage their illegal supplies. Three hundred illegal oil refineries were discovered last year. The illegal oil thief-backed organizations sometimes pay chemical engineers tens times more than the legitimate oil companies.

Even oil loading from terminal onto tanker vessels has become very difficult due to the efforts of armed thieves in boats. Last month the Nigerian military seized 24 barges containing illegal crude. On March 5th, in retaliation, oil thieves exploded part of a Chevron pipline.

Oil production in the Niger Delta is having a very damaging effect on the natural resources. Last year about 40,000 barrels of Shell’s oil supplies were spilled into the environment during botched thefts. The United Nations has estimated there have been at least 6,000 oil spills in Nigeria since the 70s.

Image Credit: Wiki Petroleum page, Public Domain

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