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Nigerian politicians profit from oil theft-WikiLeaks
7 Sep 2011
Author: Cocks, Tim
Country: Nigeria

* Oil bunkering costs huge portion of Nigerian production

* Nigeria produces around 2 million barrels of oil per day

LAGOS, Sept 7 (Reuters) - Nigeria's political elite and soldiers have profited from large-scale oil theft in the Niger Delta that may cost the country up to a tenth of its production, according to a leaked U.S. diplomatic cable released by WikiLeaks at the end of last week.

Nigeria is the world's eighth biggest exporter of crude oil but thieves take a sizeable proportion of its output by drilling into pipelines or sometimes hijacking barges loaded with oil, a type of theft known locally as "bunkering".

"Oil theft, widely referred to as 'illegal bunkering' in Nigeria, represents significant economic activity with serious ramifications for Nigeria's economy, security, democracy and environment," says the Nov. 2009 cable sent by then-U.S. Consul-General Donna M. Blair, released by the anti-secrecy group.

"No other, major oil-producing country ... loses as much revenue from illicit oil bunkering as Nigeria, largely because the political elite, militants, and communities profit from such operations," Blair added.

An amnesty for militants in the Niger Delta in 2009 brought a degree of security and has helped cut attacks on pipelines, enabling Nigeria to restore production to around 2 million barrels of oil a day (bpd).

But oil bunkering is believed to be still widespread, and little is known of the shadowy networks that steal, store, ship and market the oil.

"Nigerian officials repeatedly request U.S. assistance to prevent bunkering. The reality, however, is that most oil bunkering is not a global phenomenon readily susceptible to international deterrence, but a largely Nigerian development that requires domestic resolution," the cable said.

The cable suggested that a Joint Military Task Force (JTF) tasked with quelling militancy in the Delta at the time was also involved. It even likened the JTF and the militants to rival drug gangs.

"Some observers compared the relationship between the JTF and major militant groups to arrangements between rival gangs in U.S. urban areas; generally each JTF unit and militant band had its own territory in which they operated and from which they derived their illicit incomes," it said.

"Profits from illegal bunkering became high enough in the last several years to enable both JTF members and 'militants' to profit and co-exist without seriously interfering with each other's activities. Fighting only erupted when disputes arose about boundaries."

Some estimates say 100,000 barrels of crude are stolen from the Niger Delta each day, about five percent of the country's crude production. The cable suggested it may even be more.

"Various experts have estimated the volume of oil theft at between 100,000 and 250,000 barrels per day or as much as 91 million barrels per year. This amounts to billions of dollars in lost revenue for the Nigerian treasury every year," it said.

Copyright: 2011 Reuters


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