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Commentary Headline Oil&Gas

Curbing bunkering

Oil bunkering activities in Nigeria, especially in the Niger Delta areas started in the early 80s. The illegal activity assumed a new dimension with the advent of agitation for resource control by Niger Delta indigenes and militancy in the region.

Initially, the objective of the agitation was primarily political as the citizens of the oil region were demanding improve infrastructure, social amenities and increase in derivation fund.

However, when the Federal government was not able to meet all the demands, some of the youths in the communities took up arms against the government and engaged in criminal activities such as hostage taking, destruction of oil facilities, oil theft and sea piracy.

Oil bunkering predominantly occurs in three modes. The first is the involvement of locally confined activities when the oil is siphoned from pipelines that had been punctured or collected and refined locally.

The second mode is the oil thieves siphoned crude oil directly into ships or local boats before transporting it to the creeks and offloaded into tankers in the coastal areas while the third mode involves lifting of excess crude oil by extracting license holders by making false claims as a cover up to the actual quantity of crude oil that is shipped out of the country.

Effect of oil bunkering

It is a fact that oil bunkering is having a negative economic impact on the nation. For instance, in a bid to sustain the receipt of oil rents, the federal government always sought to rid the Niger Delta of this particular type of criminality by deploying military troops to the region which in turn had often led to occasional face offs between the criminal gangs and the military.

Apart from the face offs, some of these criminal groups also engage in armed hostilities among themselves for various reasons. These unhealthy situations impede development in all ramifications.

The degradation to the environment caused by oil bunkering had reduced arable land for farming, devastated fishing communities, destroyed streams and rivers, led to insecurity, promoted criminality as well as lost of lives.

For instance, in April, this year, hundreds of lives were lost as a result of oil bunkering activities in Abiaezi community in the Ohaji/Egbema Local Government Area of Imo state.  Majority of the victims of the disaster were youths.

The Rivers state Governor, Nyesom Wike, in 2019 had pointed accusing fingers at some top military men of being involved and sponsoring oil bunkering in the state. A claim the military has continued to deny.

In monetary terms, in September 2022, the Nigerian National Petroleum Company Limited, NNPC Ltd had disclosed that it losses 470,000 barrel per day (bpd) amounting to $700m monthly to oil theft.

During a tour of the facilities of the NNPCL, the Group General Manager, National Petroleum Investment Management Services, Bala Wunti, said oil production was also hindered by security challenges in some terminals and that the pipelines particularly those around Bonny terminal cannot be operated due to the activities of criminals.

Solutions

The Federal Government over the years had put efforts in place in a bid to stop crude oil theft, one of such was the awarded of a pipeline surveillance contract worth millions of dollars to a security outfit owned by Government Ekpemupolo also known as Tompolo in August.

This lead to the immediate shut down of 58 illegal taps on oil facilities, including a line connected to Nigeria’s Trans Forcados Pipeline that had siphoned oil for almost a decade.

These should be thoroughly investigated with the names of perpetrated made public and they should also be prosecuted for their actions.

Another solution to this challenge is that, Government should put in place a proper legislative framework as the absence of a concise law on anti-oil bunkering will be a setback in the fight against oil bunkering.

Furthermore, oil matters which are in the exclusive legislative list should be amended to be on the concurrent list for state legislatures to have an input.

It is not enough to destroy illegal refining camps and their products rather the operators of these refineries with their collaborators in both government and security agencies should be arrested and prosecuted. There is the compelling need for Government to commence the full implementation of the recent enacted Petroleum Industry Act especially as it relates to operational gazette between host community and oil companies to give them a reasonable percentage instead of the 3% derivation.

Communities in the Niger Delta regions should be given a sense of belonging in this regard, government should continue to collaborate with oil companies to set up industrial hubs at strategic locations across the Niger Delta where there will be adequate water, electricity, security and soft loans for small scale businesses to keep the indigenes of the oil producing communities busy to improve their livelihood. 

Writing by Innocent Usuoha, a Public Affairs Analysts; Editing by Annabel Nwachukwu