How crude oil is brazenly stolen in Nigeria
The ‘business’ of crude oil theft and bunkering in Nigeria is a highly networked activity.
The deal involves government bureaucrats, oil employees, security agencies, host and international communities.
The international community is included in the list because some of what is stolen is exported.
Earnings are laundered through international banks and used to buy assets around the globe.
The illicit trade also supports internationally organized crimes in West Africa.
Nigeria offers a strong enabling environment for the large-scale theft of crude oil.
Corruption and fraud are rampant in the country’s oil sector.
A dynamic, overcrowded political economy drives competition for looted resources.
Poor governance has encouraged violent opportunism around oil and opened doors for organized crime.
To steal oil, thieves tap into pipelines and other infrastructure in the Niger Delta.
They then pump the oil onto waiting barges and boats.
Some of it is refined locally while larger vessels carry the rest abroad.
There are also allegations that oil vanishes from at least some of the country’s roughly two dozen export terminals.
Nigeria’s oil industry is also one of the world’s least transparent in terms of hydrocarbon flows, sales and associated revenues.
But Nigeria’s trade and diplomatic partners have taken no real action.
No stakeholder group inside the country has a record of sustained and serious engagement with the issue.
The resulting lack of good intelligence means international actors cannot fully assess whether Nigerian oil theft harms their interests.
Crude oil can move in complex ways once it leaves Nigerian waters.
Buyers load multiple parcels of crude onto single ships, or transfer oil between ships.
Others blend different grades of oil and place large quantities in storage.
None of these moves are suspect per se, but thieves can use them to launder stolen oil into the licit market.
Sources claim stolen oil makes its way to the United States, several West African countries, Brazil, China, Singapore, Thailand and Indonesia.
Following the money trail is a key step towards controlling oil theft.
Profits drive the business, and lax law enforcement allows funds to move freely around sub-Saharan Africa and beyond.