Nigeria oil theft a global criminal enterprise: study

Nigeria oil theft a global criminal enterprise: study

LAGOS - Oil theft in Nigeria is a huge criminal operation affecting companies and states around the world, but interest in tackling the problem is low, Chatham House said in a report Thursday.

The new study from the London-based think-tank, based on interviews with some 200 government, private sector and independent sources, said "Nigerian crude oil is being stolen on an industrial scale."

Estimates on the scale of the problem vary, with some Nigerian officials saying 150,000 barrels per day is stolen, costing some $6 billion (S$7.4 billion) a year in lost revenue.

Chatham House, which also reviewed thousands of documents, said the figure was almost certainly more than 100,000 barrels per day.

Nigeria is Africa's largest oil producer, with output at around 2.0 million barrels per day.

"Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria," according to the think-tank.

Few fully grasp the problem and those affected have shown little desire to act, it added.

"In Nigeria, politicians, military officers, militants, oil industry personnel, oil traders and communities profit," Chatham House said.

For Nigeria, cracking down could inflame tensions among powerful figures, particularly in the southern oil-producing Niger Delta region, where unrest declined after a 2009 amnesty deal with rebels, but where stability remains elusive.

Despite rhetoric about the scourge of oil theft from Western governments and foreign oil majors, neither camp has fully attacked the problem, the report said.

There is "very little incentive for foreign partners to act, including risk of a diplomatic rift and almost no leverage," in part because of Nigeria's low aid dependence.

Global oil giants like Shell, ExxonMobil, Total, Chevron and ENI all operate in the Niger Delta, but it is "unclear how much export oil" these companies lose, Chatham House said.

"We have never reached the breaking point," one oil executive was quoted as saying. "Something always happens that rights the ship."

Among the majors, Shell has been the most vocal and is likely the hardest hit given its larger presence onshore.

But companies have in recent months sold onshore assets, seemingly to focus on deepwater projects, where the risks of theft and unrest are limited.

Purchase this article for republication.

BRANDINSIDER

SPONSORED

Most Read

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.