The ongoing court-martial of 13 Nigerian Navy personnel in Lagos for alleged complicity in oil theft and vandalism draws attention to the enormity of Nigeria’s huge fiscal leakage and how corruption has all but made it impossible to stop the haemorrhage. The country is in dire financial straits, suffering massive revenue shortfalls, piling up debts and spending almost all it makes on repayment. Yet, dependent on crude for most of its external revenue, it has been helpless in stopping its theft. Unless the government stops the collusion by state agents, the grand larceny will continue.
The President, Major General Muhammadu (retd.), must wake up to the monstrous problem and the threat it poses to the country’s survival. He should shake up the security forces, the state oil company, the Nigerian National Petroleum Company Limited, the regulators, the statutory maritime agencies, the intelligence services, and the police. Corrupt insiders in all are complicit, active collaborators in the industrial-scale theft of crude and refined products. Multiple reports have for years confirmed this high level of treachery, including by the multiple and successive security task forces.
Latest reports indicate that about 108,000 barrels of crude are stolen daily from state-linked production. OPEC estimates that the country lost 2.3 million barrels in July alone and 28 million barrels in total from January to July this year. Meanwhile, theft and vandalism have made it impossible to meet the OPEC-assigned production quota of 1.8mbpd. The regulator said Nigeria lost $1 billion to crude theft in first quarter of 2022. Consequently, an economy already under pressure, and doubly battered by the COVID-19 fallout, is suffering serious revenue shortage and borrowing furiously to keep government running. Anywhere else, extraordinary security measures would have been adopted to save the country. But the Nigerian government demonstrates its dysfunction by its seeming helplessness in stopping the thieving.
Buhari and the law enforcement agencies should smash the cartels, uncover the official and security collaborators, and impose severe punishment on them. The World Bank and the IMF have repeated their warnings that oil theft and its impact on revenue could bring the economy to its knees. Nigeria has already suffered two recessions 2016-2017 and 2020. Wracked by poverty, insecurity, joblessness and social disharmony, another could prove disastrous.
Entrapped by sheer greed and electing to roll in the mud with those they were deployed to check, complicit military and other security personnel have become part of the thieving syndicates. They should not go unpunished. The Director of Naval Information, Adedotun Ayo-Vaughan, giving an update on the trial, lamented, “Repeatedly, naval personnel have been warned to steer clear of crude oil theft, oil bunkering and associated crimes under any guise, concealment or circumstance.” This latest arrest is too little. There are many more Naval and other services personnel selling the country short. A report by the Atlantic Council, a US think tank, citing security sources, said serving and retired Nigerian Navy, Nigerian Army, NNPC, regulators, customs and ports officials were neck-deep in the oil theft.
Seplat Energy, Heirs Holdings and Oando are among domestic oil companies reporting massive theft of their production. Mobil, a multinational, said it lost $1 billion early this year. The industry regulator said Nigeria lost N434 billion in the first quarter of this year to theft and vandalism. The NNPC puts total losses at 400,000bpd to thieves and vandals, adding that it lost $4 billion to theft in 2021.
Buhari, who doubles as petroleum minister, should shift into emergency response mode. He should unleash the anti-graft agencies and special police teams to identify the colluding security personnel. The searchlight should be beamed on the Joint Military Task Forces, the Nigeria Security and Civil Defence Corps that is charged with pipeline surveillance, the police, and the State Security Service. It should include the Nigerian Upstream Petroleum Regulatory Commission, the Nigeria Customs Service, Nigerian Ports Authority, and community leaders.
Nigeria is not alone in suffering crude oil theft. Indeed, the United Nations University WIDER programme estimates global oil theft at $133 billion, making it the largest stolen natural resource. But the problem is the magnitude of what is stolen in the country. Most baffling to Nigerians and the international community is the lukewarm response of the government to the heist and its failure to map out effective countermeasures. While Nigeria loses about 400,000bpd as reported by the Financial Post of Toronto, Canada; Mexico, the second highest, comes far behind with 5,000 to 10,000bpd.
Other countries take strong measures to protect national assets. The Atlantic Council reports that in 2015, Mexico strengthened its laws, raising jail terms for oil theft from eight years to as high as 25 years in some cases. In 2013, Ghana introduced the Petroleum Product Marking Scheme wherein molecular markers are mixed into fuels imported, enabling the regulators to screen retail stations for legal fuel. Adulteration dropped by 78 per cent shortly after.
Cutting-edge technology should be deployed along the production, distribution, and export infrastructure, including deploying drones. There should be strong partnership between the security agencies and the private sector to prevent theft and vandalism.
Stronger penalties for oil theft and vandalism as serious economic sabotage and official collusion should be legislated and ruthlessly enforced. Currently, few thieves are prosecuted, and those that face the judicial process get light sentences. In one case, nine oil thieves caught with N200 million worth of stolen crude were put on trial in 2015. Scandalously, the defendants only got a N2,000 fine each in January 2022. Exasperated, the presiding judge, Okon Abang of the Federal High Court, described as “sordid, morbid, very unpleasant and dirty” the curious plea bargain agreement brought by the prosecutor, giving the accused a soft landing. Such nonsense should not be allowed again.
The starting point should be smoking out all the traitors destroying the economy for personal gain. All security agencies should clean up and Buhari should lead the charge.
EDITORIAL FROM PUNCH
