This report analyses the international dimensions of Nigerian crude oil theft and explores what the international community could do about it.
Nigerian crude oil is being stolen on an industrial scale. Nigeria lost at least 100,000 barrels of oil per day, around 5% of total output, in the first quarter of 2013 to theft from its onshore and swamp operations alone. Some of what is stolen is exported. Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria, polluting markets and financial institutions overseas, and creating reputational, political and legal hazards. It could also compromise parts of the legitimate oil business.
Officials outside Nigeria are aware that the problem exists, and occasionally show some interest at high policy levels. But Nigeria's trade and diplomatic partners have taken no real action, and 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.
Nigeria's dynamic, overcrowded political economy drives competition for looted resources. Poor governance has encouraged violent opportunism around oil and opened doors for organized crime. Because Nigeria is the world's 13th largest oil producer – exports often topped two million barrels per day in 2012 – high rents are up for grabs.
The report recommends the following four first steps for building a cross-border campaign against Nigerian oil theft:
Nigeria and its prospective partners should prioritize the gathering, analysis and sharing of intelligence.
Nigeria should consider taking other steps to build the confidence of partners.
Other states should begin cleaning up parts of the trade they know are being conducted within their borders.
Nigeria should articulate its own multi-point, multi-partner strategy for addressing oil theft.
Figure 1 shows large-scale illegal bunkering; Figure 2 shows how small tankers can sometimes steal crude directly from the pipeline without recourse to barges; Figure 3 shows use of ocean-going tugs, anchor handling vessels or ships that serviceoil platforms to pull large barges. Download the report for more.