In an interview with Financial Times published last Friday, Chairman of Heirs Holdings, Mr Tony Elumelu sounded more upbeat about the Nigerian oil and gas sector than he was two and a half years ago. As an industry player, Elumelu had lamented in March 2022 that the reason Nigeria could not meet its OPEC production quota “is not because of low investment but because of theft, pure and simple!” At the same period when oil companies were shutting down production, a former Seplat Energy CEO, Mr Austin Avuru stated that “the entire export pipeline network has been surrendered to vandals and illegal ‘bunkerer’ thus the phrase, ‘crude theft’ which crept into the industry about 2010 has taken on a new meaning.”
It is heartwarming that Elumelu is no longer reading from the Book of Lamentations, essentially from a reduction in theft. “42,000 barrels of crude are pumped out daily. Theft still takes away about 18 per cent of production,” Elumelu admitted while posing a fundamental question for which there has been no answer. Asked about those behind oil theft, Elumelu adopted the Nigerian style of answering a question with another question, but he left no doubt as to who should be held accountable for the problem. “This is oil theft; we’re not talking about stealing a bottle of Coke you can put in your pocket. The government should know, they should tell us,” Elumelu replied before he added: “Look at America — Donald Trump was shot at and quickly they knew the background of who shot him. Our security agencies should tell us who is stealing our oil. You bring vessels to our territorial waters, and we don’t know?”
Elumelu would not be the first to raise questions about the nature of this crime and why perpetrators should not be difficult to fish out. At the session with the federal government in 2022, then Managing Director, ExxonMobil Nigeria, Mr Richard Laing (now chairman & CEO of its affiliate companies in Nigeria) described the situation in our oil sector as organized crime because “the engineering involved points towards a high degree of sophistication and technology, as well as the distribution.” With these criminal cartels investing in barges, canoes, speed boats and large wooden boats which they use in their illicit business, it is difficult to fault Laing. Yet, to imagine that the country suffers such enormous revenue depletion while begging for foreign loans is, to say the least, lamentable.
With the controversy over where to secure feedstock for the 650,000 barrels per day Dangote Refinery, mismanagement of both the upstream and downstream sectors of the petroleum industry in Nigeria is now an open sore. But nobody should be under any illusion that the problem of oil theft is being addressed in any sustainable manner. The Nigerian National Petroleum Company Limited (NNPCL) is currently working in collaboration with the military and other security agencies to tackle oil theft in the country based on a “fresh mandate” from President Bola Tinubu. “We know that Nigeria relies so much on crude oil production, so we want to use this medium to appeal to the communities, to have an understanding,” the Chief of Defence Staff, General Christopher Musa told Nigerians. “Yes, we know trust has been a problem, but they can trust us, they can trust the government, that we want to do things differently. Everyone will be carried along”.
Considering the way their trust has been abused over the years, most Nigerians would have taken Musa’s words with a pinch of salt. Besides, this episodic approach to a fundamental challenge that has been with us for many decades can only achieve short term results. “A tanker will be commandeered, its tracking devices disabled, and its cargo siphoned off onto a smaller ship in an isolated location and sold on the black market”, according to a report once published in oilprice.com, an authoritative news outlet for oil and gas, which detailed the modus operandi of the criminals. “Fuel theft in Nigeria is so systemic it will not be slowed or stopped any time soon. Doing so would be tantamount to eliminating drug trafficking in Colombia”, argued Dr Terry Hallmark, an international oil and gas expert whose career as a political risk analyst spanned more than three decades, in a piece he wrote for Forbes magazine in 2017.
I cannot count the number of columns I have also written on this vexatious issue of oil theft. In one, I referenced the 2003 United States-based Human Rights Watch (HRW) report which stated that oil theft accounts for 10 percent of Nigeria’s daily production. That was more than two decades ago. Today, between 20 to 30 percent of oil production is lost to these criminal cartels. Describing oil theft as Nigeria’s most profitable private business, estimated to yield between $750 million to $3.5 billion annually (as of that time), HRW said “in theory it should be easy to stop its theft (it is hard to hide a tanker and easy to trace its owner)”. Apparently not in Nigeria!
According to the HRW report, “Illegal oil bunkering-long prevalent in the Delta-has become a sophisticated operation that no longer requires the cooperation of oil company staff to operate equipment at wellheads or allow access-though there are still reports that they are involved.” The bunkerers, the report further claimed, “tap directly into pipelines away from oil company facilities and connect from the pipes to barges that are hidden in small creeks with mangrove forest cover. Frequently, both in the riverine areas and on dry land, the police and military are involved in the process or are paid off to take no action against those tapping into pipelines.”
To be sure, oil theft is not a new challenge in Nigeria; it has been with us for decades. That culprits are hardly brought to justice is where the problem lies. Even when they are apprehended, investigations are most often bungled. In May 2014, for instance, the late former Bayelsa State Governor, DSP Alamieyeseigha, testified before the Senate Committee on Public Finance and Revenue. “I had one experience. Tankers were loaded in Bayelsa. I got the information and laid ambush for them and arrested them. About 14 big tankers and they were handed over to the police,” Alamieyeseigha told the senators. “They were charged to court and the judge ordered that the product should be tested to be sure if they were crude oil. NNPC was invited, they came, took the sample and after a week the result came out as agro-chemical and before I know it, all of them had been released”.
There was no follow-up regarding Alamieyeseigha’s claim which pointed to official complicity. But it is also typical. On 18th May 2013, then Nigerian Maritime Administration and Safety Agency (NIMASA)Director General, Patrick Akpobolokemi told journalists in Abuja that “There are some big vessels under my custody belonging to organised piracy and crude oil thieves,” before he promised: “Very soon, I will release all the big names in the syndicate.” Akpobolokemi, who was in April this year acquitted over a case of N8.5 billion brought against him by the EFCC, has not been held accountable on the issue that impinges not only on our economy but indeed, our national security.
Meanwhile, I commend recent efforts by the NNPCL, the military and other security agencies to reduce the menace of oil theft in Nigeria. But I have not seen anything to suggest they are any different from the usual episodic interventions we have witnessed in the past. As I have argued repeatedly on this page, the capacity to undertake oil theft to the magnitude being reported in our country is not available on the streets. It is an organised crime and must involve big actors across the oil and gas value chain. Until the federal government therefore musters the courage to deal decisively with what clearly threatens the economic well-being of Nigeria and our national security, these occasional ‘presidential mandates’ will only continue to yield momentary drama.
Tales from The Olympics
The 2024 Paris Olympics ended last Sunday in France with the focus now on Los Angeles 2028 in the United States for which many countries are already preparing. But that is not the Nigerian way. Preparations will only start a few weeks to the 2028 Olympic Games. Meanwhile, there is a report on the number of medals ‘won’ by our country in Paris being circulated on WhatsApp that I find quite instructive. There is also a similar cartoon since we know how to create humour out of every tragedy. Both tell a compelling story of Nigeria. First, the report which I have slightly edited: “For those who may not know, Nigeria performed creditably well at the just concluded Olympics in Paris with five gold medals, three silver medals and three bronze medals. Here is the breakdown: Gold in Shot Put: Yemisi Ogunleye (Germany); Gold in Men’s Football: Samuel Omorodion (Spain); Silver in Men’s Football: Michael Olise (France); Silver in Women’s Hammerthrow: Anette Echikunwoke (USA); Gold in Men’s Volleyball: Barthélémy Chinenyeze (France); Silver in Women’s 400 Meters athletics: Ebele Agbapuonwu, (Salwa Eid Naser, Bahrain); Gold in Men’s Basketball: Femi ‘Bam’ Adebayo (USA); Bronze in Women’s Basketball: Ezi Magbegor (Australia); Bronze 4x400m women: Yemi Mary John (GB); Bronze 4x400m women: Victoria Ohuruogu (GB); Gold in Volley Ball Women: Paola Egonu (Italy).”
With N9 billion expended and a total of 84 athletes (and no doubt, hundreds of idle officials and politicians), Team Nigeria is returning from Paris with zero medals. And just like the Tokyo Olympics, four years earlier, our officials failed to do even the basic things at the Games. In a most pathetic case during the Olympics, Favour Ofili wrote: “It is with great regret that I have just been told I will not be competing in the 100 metres at this Olympic Games. I qualified, but those with the AFN and NOC failed to enter me. I have worked for four years to earn this opportunity.”
Now to the award-winning cartoon by Wilfred Orhue. On the medal podium are the United States for Gold, China for Silver and Japan for Bronze. A man carrying a Bible and Quran and the green-white-green flag was standing by. The caption: ‘Team Nigeria will now lead us in the closing prayers.’ The cartoon explains the tragedy of our country which a former Super Eagles Manager, Mr Berti Vogts, once summed up most memorably: “Nigerians spend a lot of time attending workshops and seminars, the rest in prayers. Yet, at the end, nothing works.”
For that narrative to change, a lot of things must also change. Regarding the Olympics, respected broadcast journalist, Dr Danladi Bako has already put the Sports Minister, Mr John Enoh, to task, following the Paris disaster. “There are too many jobbers occupying top positions in the Federations who feed on the system. The National Olympic Committee must be revamped through new elections into the executive, and performance-driven persons put in charge,” Bako admonishes. “Government must be definite and intentional in funding scholarships to designated universities of sports in the United States, China and Cuba for student youth games products.”
While I subscribe to the idea of funding scholarships for sports men and women, it doesn’t have to be for only those in the Diaspora. As a student at Ife in the eighties, I can recall several students who were also on such sporting scholarships. Our charity must begin at home!
Kola Adesina @ 60
It is a testimony to the kind of man he is that the 60th birthday ceremony of the managing director of Sahara Group and board chairman of Ikeja Electric, Mr Kola Adesina had in attendance people from all walks of life. From former Presidents Olusegun Obasanjo, Goodluck Jonathan and Ernest Bai Koroma (of Sierra Leone) to young professionals in the corporate world and entertainment industry, it was a memorable night in Lagos on Monday as many paid tributes to a man who values relationships. With a year and a few months between us (as I got to know only recently), Kola qualifies to be called an Egbon. And he has earned it. I wish him long life and good health.
Credit: Olusegun Adeniyi