Nigeria News

Top politicians, generals smile as oil theft cripples Nigeria

Oil theft has become a major threat to the Nigerian economy, but those involved in the crime are highly connected personalities and Niger Delta militants who would always find their way in the difficult terrain.
 
The conspicuous sign at the entrance to the Nigerian Navy Ship (NNS) Pathfinder at Rumuolumeni, Port Harcourt, gives a clear warning to crude oil thieves. ‘BE WARNED,’ it declares. 
Well, it does not seem those engaged in the illegitimate business of stealing crude oil are heeding the warning. Despite constant strikes by the Joint (military) Task Force (JTF), made up mostly of the Nigerian Army and the Navy at illegal refineries in the Niger Delta and sometimes, arrest of suspected vessels and personnel, there has been an upsurge in the lucrative business trade of stealing crude oil. The Federal Government, United States, multinational oil companies, and the JTF in the Niger Delta have lamented the situation.
 
There is expansive blame game in the futile efforts to arrest the oil theft scourge. Everybody seems to agree on one point though: the federal government itself lacks the political will to stop the unlawful billion-naira business. JTF sources who confided in Sunday Trust in Port Harcourt last week expressed frustration at what they called the non-prosecution of middle-to-top level refining suspects and owners of vessels identified or arrested for conveying stolen crude in the Niger Delta and beyond.  An instructive case was narrated of a red-handed arrest, four years ago, by security operatives at the Atlas Cove, Lagos, of a big-time oil thief described as highly notorious in the illegal bunkering trade, but widely influential in top government corridors. The wealthy businessman, who hails from one of the eastern states, is said to own a petrol station in Ghana and a big computer school in Nigeria. Sources confided in Sunday Trust that the suspect was handed over to the appropriate law enforcement agents for prosecution, only to be released a month later. Military sources moaned last week to Sunday Trust that prosecution, or rather non-prosecution, of big oil thieves, if arrested at all, has been a major dent in their efforts at confronting the illegal bunkering issue.
 
The regulations guiding the operations of the Nigerian Army and Navy in the Niger Delta mandate the soldiers only to arrest oil thieves after which they will hand them over to either the Nigerian Security and Civil Defence Corps (NSCDC) or the Economic and Financial Crimes Commission (EFCC), in which the powers to prosecute reside. But as an Information Officer of the JTF saddled with combating the crime told this publication in Port Harcourt last Thursday, not enough prosecution was being done by these law enforcement agencies. “Apparently, government lacks the political will to take on the big men behind big-volume oil theft, hence, the continued perpetration of the crime,” the officer said. Theft and sale of Nigerian crude has been on the increase in recent times. Two weeks ago, West and Central African heads of state met in Cameroun to deliberate on maritime criminality which is now said to be worse than the piracy off Somalian waters. Oil theft in the Gulf of Guinea, which includes waters off Nigeria, has risen to proportions commanding world attention. Last year, pirates attacked 966 sailors and stole oil worth between $25 million and $75 million euros (N33 million and N100 million).
The stolen oil originates from Nigeria. There are two legs to the illicit oil theft trade. On the big, international multi-dollar platform are powerful Nigerians who can afford to buy or hire the big vessels used in illegal crude oil bunkering. The untouchable thieves illegally load crude onto their own or hired ships and sail to the waters off Nigeria where the buying foreign merchants from West Africa and Eastern Europe await them. Mostly, in these illegal deals, compromised security agents, at the behest of the highly influential Nigerians involved in the trade, look the other way while the ships sail away. 
There are also the daring pirates, now involving many young and middle-aged Nigerians, who operate in the Gulf of Guinea and hijack fuel tankers. But rather than demand for ransom for the crew as was initially done by Niger Delta militants, they now load the hijacked product onto their ships to sell to the ready and lucrative foreign black market on the West Africa coast and in European countries like Russia. 
 
Military sources, who stressed the superb organization and syndicated nature of the business, were mute on names of vessels and top Nigerians involved in the big-ticket racket. They could only say that top Nigerian  politicians, retired military generals, some shippers and other businessmen, not only from the Niger Delta as many are wont to believe, but from across the country, are involved in the illicit trade. “It is another aspect of monumental corruption that binds top political leaders, retired army generals and navy admirals, and their business cronies together,” a JTF major in the Niger Delta told Sunday Trust. “They operate, as they always do on big issues of corruption, like a cult. Only themselves can undo themselves,” he declared. An earlier Wikileaks cable in 2009 had quoted a youth leader in the Niger Delta, Dimietri Kemedi, of accusing even serving soldiers of complicity in the illegitimate trade. Kemedi was quoted to have said: “The military wants to remain in the Niger Delta because they profit enormously from money charged for escorting illegally bunkered crude and from money extorted in the name of protecting security.” 
 
An indication that military men  enjoy a huge slice of the illegal crude oil booty  emerged in 2003 when law enforcement agents intercepted and impounded the MT African Pride, a 30,000 metric tonne (MT) oil vessel manned by 18 Russians, two Romanians, two Georgians and two Nigerians. MT African Pride, captained by Russian Ikachev Valeriy, had illegally loaded 11,300MT crude cargo when it was intercepted by NNS Nwamba, led by Commanding Officer Joe Aikhomu. The vessel was sailing out of Nigeria to deliver its cargo, estimated at about N5 billion, to waiting buyers when it was intercepted on the Excravos/Forcados (Niger Delta) waters. The allegation was rife then in informed quarters that the deal was masterminded by the son of a former president. In what would confirm the crime was truly top-wired, the crude cargo in MT African Pride was mysteriously offloaded into another vessel, before the ship itself finally disappeared from the naval base, NNS Beecroft, where it was detained. 
Following widespread combination and media blitz that attended the scandal, the Olusegun Obasanjo administration ordered an investigation into the disappearance of the ship. A court martial later tried Rear-Admirals Samuel Kolawole and Francis Agbiti, Flag Officer, Western Command and Chief of Training and Operations, Nigerian Navy Headquarters respectively, for involvement and conspiracy in the ship’s disappearance. The special court found them guilty and ordered their dismissal from the Nigerian Navy. But what was not publicly disclosed were the identities of the owner of the vessel and the heavy crude load, and the intrigues and stupendous bribes that went into the disappearance of both ship and load. The nation is still awaiting the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Patrick Akpobolokemi, to make true his promise last month to mention names of the influential Nigerians involved in crude oil theft. He told journalists in Abuja: “There are some big vessels under my custody belonging to organized piracy and crude oil thieves. Very soon, I will release all the big names in the syndicate. Once we do that, people should not come to say it’s ethnic cleansing, 2015 or all those kinds of stories. The media should just ask, ‘Did you do the piracy or not?” Nigerians may have to wait forever for Akpobolokemi’s bombshell.
 
The JTF has been filling a bit of that information gap, though. Documents available to Sunday Trust revealed that the NNS Pathfinder, Rumuolumeni; together with NNS Thunder, NNS Kyanwa and NNS Burutu, were able to arrest a total of 25 vessels over allegations of illegal bunkering or piracy between October 2011 and March 2013. The arrested vessels included Sir Michael, owned by Mr. Dare Bayo/Mike Amakiri and handed over to the Bayelsa Police Command in March 2102; MT Rock Fish, owned by Davinest Nig. Ltd, carrying 70,000 litres of illegally refined diesel; Godtime, owned by ECOO Energy and Development Techniques Ltd., carrying 100,000 litres of illegally refined diesel and handed over to the EFCC on 14 August 2012;  Princess Sophie, also owned by ECOO Energy, arrested with 300,000 litres of illegal diesel and handed over to the EFCC on 14 August 2012; a tugboat (barge) owned by VICO Corporate Ventures, arrested with 150,00 litres of diesel and handed over to the EFCC; and MV ST Vanessa,  belonging to Sea Castle Maritime, which was arrested for “loitering without a specific and clear mission” and handed over to the Rivers State Polie Command.
 One of the many Nigerians waiting for the NIMASA head to make good his threat is Managing Director and Country Chair, Shell Petroleum Development Corporation of Nigeria (SPDCN), Mr Mutiu Sunmonu. To Sunmonu, the time to expose Nigeria’s oil thieves is now. For, as he harped on June 27, 2013, the crime has reached “a crisis situation.” Nigeria is calculated to have been losing about $6 billion in the last two years to illegal bunkering and crude oil theft. The oil boss corroborated that the illegal trade is done by “well-financed and highly organized criminal operations, and is a parallel industry with a developed supply chain and growing sophistication.” The Senate committee on the upstream sector of the oil industry put a higher figure to it, saying about $28 billion has been lost to oil theft over the past three years.
There is also the other leg of local oil thieves, mostly young men who vandalise pipelines to siphon crude oil which they refine for sale as petrol. Thousands of refineries dot the Niger Delta creeks. The JTF has been having a running battle with the thieves and refiners. But it seems the more refineries the soldiers destroy, the more the oil thieves build.  Oil siphon is common along the Trans-Niger pipeline and the Nembe Creek Trunk Line. Both have flow stations leading  into the Bonny Terminal.
Building refineries, which has been to the federal government a magical and impossible assignment, seems the pastime of oil thieves in the Niger Delta, the level of sophistication and technology notwithstanding. Sunday Trust gathered the thieves have even devised ways of building underground refineries to evade discovery and destruction by the JTF teams. This year alone, NNS Pathfinder, led by its commander, Commodore D.E. Effedua, collaborating with the Forward Operating Base, Bonny, headed by Captain C.E. Okafor has destroyed more than 50 illegal refineries. In February, the naval teams destroyed four illegal refineries in Karibiama Creek, Abonnema Forest, KM 45 Forest and Adamakiri and Ijawkiri Creeks. Twenty-five persons were arrested in the raids while items that included one speedboat, one 75 HP sppedboat and four pumping machines were recovered. 
Between April and June, the naval teams have also destroyed 45 other illegal refineries in Abonema Creek, Ogu/Bolo Creek, Bille Creek, Ele Community, Nbokulo, Bodo/Ship Creek and Red Mud/Bodo Line Creek. Earlier, on March 13, they had arrested four suspects – Sunday Garba,  Daship Tanko, Igho Ukiri and Emmanuel Likita – at Bonny.
Last Tuesday, the EFCC arraigned 14 suspects to a Federal High Court, Lagos on a five-count charge bordering on illegal bunkering. This development tends to mock the allegation that arrested oil crime suspects are not being prosecuted as due. “Those making the frivolous claim should mention the big oil thieves that are not being prosecuted,” the EFCC spokesman, Wilson Uwujaren, told Sunday Trust via a text message yesterday. And apparently referring to last week’s arraignment, Uwujaren referred to critics to visit the Commission’s site to see all arraignments for bunkering.
Many Nigerians are still unlikely to agree with him. They will tell Uwujaren that the big fishes in the big illegal bunkering game, those who own the expensive vessels used in international oil theft, are yet to be arraigned.        
On its part, the Nigerian National Petroleum Corporation (NNPC) and the Ministry of Petroleum Resources have, in the past few days, released figures of the huge resources lost to piracy, both in volume and in value.  It is, however, estimated that Nigeria is currently losing some 250,000 barrels of oil per day to oil thieves. Most of these thefts are carried out by the outright sabotage of oil facilities, especially the pipelines and the flow stations from where products are taken for sale. Essentially Nigeria loses between U$6bln to U$12bln per annum. 
The NNPC/Shell Petroleum Development Company Joint Venture recently declared a force majeure on Bonny Crude due to persistent crude oil theft, resulting in the shutting in of 150,000bpd. Just across the 97-kilometre Nembe Creek Trunk line, 53 break points were discovered. Also Agip has suspended crude oil production activity in Bayelsa State where 60% of its production of about 90,000 kbpd is stolen. 
Given the record for the first quarter of the 2013, the NNPC said daily crude oil production during the period fluctuated between 2.1 and 2.3 million barrels per day (mbpd) compared with the projected estimate of 2.48mbpd in the year’s budget.  
“Expectedly, this fall between actual production and forecast in first quarter 2013 has resulted in a drop in crude oil revenue of about $1.23 billion (N$191 billion) that should have accrued to the Federation Account,” she explained.
 “Investigations showed that 53 break points were discovered along the 97km Nembe Creek Trunkline. Repair work is expected to last about six weeks. This will further reduce our April and May monthly average to about 2.2mbpd and further decrease crude oil revenue by about $554.0 million (equivalent to N83 billion) that should have accrued to the Federation Account. 
The financial record from the Central Bank of Nigeria (CBN) has shown a drastic drop of crude oil revenue from N8.878 trillion in 2011 to N8.117 trillion in 2012 signifying a drop of about N761 billion which is largely attributed to the crude oil theft in the Niger Delta.
The CBN record shows that the drop in crude oil revenue began in the third quarter of the 2012 with about N45 billion from the preceding quarter and thereafter dropped by N112.6 billion in the fourth quarter of 2012.
There was huge drop of about N707 billion in the third quarter of 2012 when compared to same period in 2011, while the difference in fourth quarters is about N585 billion respectively.      
 The International Crisis Group, in a report released earlier this year entitled: “The Gulf of Guinea: The New Danger Zone, revealed that between 2007 and 2011, there were an estimated 150 cases of maritime piracy to the east of the Niger Delta. In most cases, the attackers were equipped with heavy weapons and rocket launchers. According report, most of the attacks were planned in Nigeria or Bakassi by groups that did not have permanent bases in the mangroves, where living conditions can be extremely difficult. Arms were supplied by a network of traffickers with links to groups in the Niger Delta, but also allegedly by accomplices within the security services.
The report said, “In all successful reported attacks pirates stole the ship’s cash, stores or crews’ belongings. In successful hijack operations, they forced the crew to sail away from the point of attack and stole fuel worth between $2 million and $6 million. Academics and experts believe that, in view of the high rate of similar attacks off Nigeria before and during 2011, pirate attacks off Benin are most likely masterminded and executed principally by Nigerians. They have the necessary intelligence network, boats, firepower and technical know-how to execute such hijacks and sell stolen fuel. That pirates made telephone calls to Nigerian numbers from ships hijacked off Benin supports this theory.” 
The group reported further that “The rise in maritime crime in the Gulf of Guinea is mainly due to the poverty of the great majority of the population alongside a wealthy elite. There is a lack of transparency about what happens to the profits from the oil industry and other resources, which are monopolised by the ruling elites and foreign private companies. The inequitable distribution of wealth means that economic disparities are blatant.
“However, an increase in economic activity along the coast accompanied by poor governance gave impetus to the criminalization of the Gulf of Guinea’s economy. As a result, smuggling networks became more sophisticated and started to deal arms, illegal oil dealers started to attack ships, former delinquents became armed activists in the pay of gangs and fishermen abandoned their trade to become pirates.
The report stated clearly that “Nigeria’s navy and maritime administration agencies are facing serious problems of capacity and corruption. A lack of government investment has left them both undermanned and under-equipped. In 2005, high-ranking navy commanders were dismissed for involvement in oil theft and illegal trading. In October 2009, a former chair of the Nigerian Ports Authority and other managers were convicted on charges related to contract splitting and abuse.
Referring to the failure of the Global West Vessel Specialist Nigeria, owned by a former militant who got a 10-year-old security contract to the tune of $103.4 million, the report added that, “ship owners complain that, eight times out of ten, their distress calls go unanswered. American coastguards visiting Nigeria to check compliance with the International Ship and Port Facility Security (ISPS) code found inadequate security, which accounted for the high crime rate in ports.
“Such weak maritime governance has allowed armed robbery at sea and acts of piracy to grow steadily in tandem with economic activity at sea. The involvement of INTERPOL will assist in reducing piracy.”

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