Page 14 - Nigeria one mag 4 edition en

Oil theft in Nigeria: there is no lack of customers

President Muhammadu Buhari said those financing documents are in order, the permits have been issued,
the parallel production must "all be apprehended and it is enough to resell the extra as if nothing had
and brought to justice. The oil thieves, already happened. This second method is very difficult to
responsible for terrible environmental pollution, are investigate, especially since it often involves officials
accused of draining the country's production, which and members of the political elite. It is really a way to
is experiencing supply difficulties and struggling to steal and transport huge amounts of oil with minimal
take advantage of soaring crude prices. risk.
Nigerian authorities seem to be saying that more and Regarding the parallel market, half (50-60%) of the fuel
more oil is being siphoned off along the pipelines. produced in small-scale refineries is diesel, which is
Businessman Tony Elumelu even claimed that more used to power the large generators that run businesses.
than 90 percent of production is stolen before it This diesel is also used in the construction sector, for
reaches oil terminals. trucks and large machines. Much of the artisanal
The government does claim that oil theft is gasoline (15-20% of production) is consumed directly by
increasing. According to their figures, 250,000 isolated riverside communities, where people do not
barrels are disappearing every day compared to an have access to gas stations and must run their own
average of 220,000 in 2021. But these statistics must generators to get electricity.
be taken with great caution, as there is no tool to As far as crude oil is concerned, there is no lack of
measure production in Nigeria, or even to know what clients. They can be from neighboring countries, from
is transported along the pipelines or what reaches Togo, from Ghana, but also from Lebanese or Indian
the oil terminals! networks. It can be absolutely anyone, people from all
The only way to get an idea is to look at exports. over the world. Some ship owners also use the illegally
Studies show that these thefts involve 5 to 20 percent refined fuel from Nigeria for their boats because of its
of Nigeria's oil production, which averages 1.4 thickness and durability.
million barrels per day.
Some of this stolen oil is refined locally and resold
locally or in the region. But we also know that some
is exported internationally.
The ratio fluctuates a lot, especially according to the
price of crude oil, which can influence this parallel
trade. In general, if oil prices are high, there will be
more interest in exporting internationally, on board
tankers parked on the high seas. But domestic needs
must also be considered, especially in the event of
shortages in Nigeria or neighboring countries.
There are two ways to steal oil: the first is to connect
a pipe to a pipeline to transport the product to a
barge. This barge can then supply the artisanal
refineries or go back and forth to a larger ship,
parked in an area where the river is deeper. This
vessel will then head out to sea to refuel a tanker
bound for South America, Europe, or Asia. These
tankers can also stay close to the West African coast
and carry out transactions with other vessels on the
high seas. The second option is what is known as
topping, the act of adding a quantity of undeclared
crude oil to an official shipment. In this case, the
Map of Nigeria, illustrative image

Nigeria 14