Oil theft as distraction amidst going pillage

For more than 15 years I have been campaigning to draw attention to the damage that oil theft in the Niger Delta does to Nigeria.

In 2008, we got traction. I was published in the Financial Times drawing global attention to it. President Yar’adua called on the G8 to provide global support to eradicate it and it looked like we were finally building momentum towards a solution. But as normal, the interests involved were able to distract, threaten and wiggle their way out of it.

President Yar’adua’s health declined; Nigeria focused on the drama of succession and the opportunity to deliver a coordinated global response evaporated. The world wanted Nigeria to lead in solving this problem, and it would have crowded in all the help that we needed, but we have to be honest with ourselves. No one has wanted to lead.

At that time, Nigeria was producing enough oil for the impact of theft to be much less problematic for Nigeria’s economy, but 14 years later, in the midst of a fiscal crisis, it is pushing us to the edge of economic collapse. Nigeria’s oil production is now well below 1 million barrels a day.

We struggle to make it into the top three producers in Africa. When I first started campaigning about this, I was worried about the impact it was having on the environment in the Niger Delta, and the way it distorted the livelihood opportunities for our youth. Now I am worried it might bring down a country.

Supposedly burdened with the weight of the subsidy that it is paying on fuel, NNPC is running scared. Suddenly it is taking the ‘lead.’ Oil theft is the biggest thing on its agenda. Overnight we have ‘discovered’ 4km pipelines that have somehow been ‘hidden’ for nearly a decade. The fight against oil theft is here! The saviour has arrived.

Please don’t be distracted by this noise. They have perfected the art of distraction. They want you to believe that oil theft is hard to stop. It’s not. It could be halted in a week with the right will and resources. But they don’t really want it to stop! Too many people are making too much money. The problem they are having is that the graft they have perfected around the fuel subsidy, as they progressively inflate Nigeria’s consumption and export millions of litres of fuel to our neighbors, is being threatened by how successfully they are stealing the oil!

They’ve looked carefully at which one of these lucrative theft mechanisms they should focus on to try and restore some stability, and rather than simply stop importing twice as much fuel as Nigeria needs so that they can export it, they’ve come up with the big show about oil theft! Why? Because it is easier to make out that it is hard to stop. Much harder than say, not ordering a cargo of fuel!

Let me try and make this simple for you, so we understand the mechanics of what is going on. Oil theft is easy to stop.
Oil is not a handkerchief. You can’t put it in your pocket and run off with it! To be depressing Nigeria’s oil production below a million barrels, theft (or its impact on production) must be affecting more than 600,000 barrels a day of oil.

That is an industrial operation, by any standards. It’s the installation of significant pipeline infrastructure that feeds out into a constant stream of tankers. We all know this. We know when and where they are stealing, we know when the ships arrive, and we know what type of oil they are loading.

The people of the Niger Delta know this, the militants know this, the oil companies know this, the government knows this, and the army and the navy know this.

So if we all know this. If we all know where the main avenues of theft are. If we know that any large-scale theft has to use one of a few major routes in order to reach its tanker, then why aren’t we solving it? Why aren’t we going to our international partners and saying, we don’t trust our own navy, so could you come in for a training operation and shadow them while they block the main routes for theft? I’ve been here before, and with the right structures in place, they would say yes. But we haven’t done that. We don’t want the prying eyes of those who might see through our distraction operation. It is expedient at the moment for NNPC to focus on it.

They need to get production up. They know how to. They will, I am sure, announce that they have achieved it and seek accolades, over the next 30 days. But please don’t be deceived. All they will have done is rebalanced the books, and got things back in order so that they can continue to steal the oil while continuing to steal the fuel.

That will work for now. But it won’t solve the wider death spiral that Nigeria is in. When graft at this level threatens your fiscal sustainability to the extent it is currently doing, the end is only a matter of time. The irony is that those stealing aren’t smart enough, or sane enough to stop. To give us a breather. To stretch out their criminal enterprise so that they continue to benefit for decades. Instead, I expect them to rush to extract the maximum value they can before the end.

What will be left once they have done this, and tipped us over the edge? Not them. Their private jets will be long gone.

Dr. Cole OFR is Nigeria’s former Ambassador to Brazil.