[center]Illegal Oil Bunkering In the Niger Delta 1
Niger Delta Peace and Security Strategy Working Papers
ILLEGAL OIL BUNKERING IN THE NIGER DELTA
Stephen Davis, Dimieari Von Kemedi and Mark Drennan[/center]

The process of legal bunkering in Nigeria has, over a succession of federal administrations,
been highly political. Licenses to “lift” crude oil (take from the terminal and sell) are not awarded
under clear and transparent rules and are often used to gratify political cohorts and friends and
associates of leading politicians. The Nigerian National Petroleum Company (NNPC) receives
an average of 57 percent of crude oil produced in Nigeria. It has a right to dispose of crude as it
wishes.

The Government appoints agents to sell its crude oil. These agents are awarded a
license to “lift” a defined volume of oil per month and sell it.

Illegal oil bunkering is not always totally unrelated to the daily process of lifting legally bunkered
oil. There is a strong suggestion that some of the legally approved oil lifters are also involved in
illegal oil bunkering. It has long been suspected that legally approved oil lifters take more than
their official allocation via a corrupt process that can ‘carry along’ regulators.

By this means
they are able to lift beyond the approved quantity allocated to them. In 2003 a motion
sponsored by the Chairman of the House Committee on Petroleum, Hon. Halims Agoda and
eight other members, noted that the Federal Government of Nigeria may be losing over
N(naira)100 billion (US$770 million) annually to large-scale fraud and illegal bunkering by oil
servicing companies.9

[b]This is an aspect of illegal oil bunkering that is often ignored by policy
makers and analysts who most often concentrate on that aspect of illegal oil bunkering that
features the use of small vessels to transport oil from vandalized facilities. However, the form of
illegal oil bunkering referred to in the Members’ motion put before the House accounts for a
significant percentage of the losses the country suffers through this illicit activity.
There are therefore three main aspects of illegal bunkering. First, the small scale pilfering of
condensate and petroleum product destined for the local market. Second, the large scale theft
of crude oil involving international maritime tanker transport for refining outside Nigeria. Third,
the excess lifting of crude oil beyond the licensed amount.

Small Scale Oil Theft
Small scale illegal bunkering is most profitable when petroleum product or condensate rather
than crude oil is stolen. Product and condensate can be used immediately whereas crude

Small scale illegal oil bunkering or pilfering starts with a prospective middle level operator
making contact with, or being contacted by an influential operator who must have the right
contacts in politics and the military.

The middle level operative then registers with a militia, cult
or community based gang. Such a group must be willing and able to provide the workforce
and/or the immediate security cover to protect the business.

The ability of the militia or the protection force to provide that service is as important as their willingness, because such a group must be able to establish habitual obedience to its will throughout the transport corridor.
It is not uncommon for groups to fight over control of these transport corridors. In the Okrika
transport corridor many young men have lost their lives in battles for control. Establishing
control over a defined territory has become an increasingly strong feature of militia activity in the
Niger Delta in recent years, and is sometimes known as “bunkering turf”10.


One source claimed that the security forces are heavily rewarded in order to gain their
cooperation.12 Another source, a high-ranking military officer, fears he will soon be transferred
out of Port Harcourt because that is a fate that awaits any officer who refuses to facilitate the
illegal bunkering activities.

The major bunkering financier provides the expensive barges
needed to take the crude to waters close to the high seas from where the tankers leave for their
final destinations. All these activities take place under the watch and sometimes protection of
security agents. [/b]

legaloil.com

It's a very long and very detailed report..


Beats me why this same Stephen Davies know so much about the ND, our Oil and Oil bunkering fiasco more than our own government.

arresa: It's a very long and very detailed report..


Beats me why this same Stephen Davies know so much about the ND, our Oil and Oil bunkering fiasco more than our own government.

My guy if you know the politics of oil and revenue, you will understand why the Western world couldn't understand why we remain poor.

RockMaxi:

My guy if you know the politics of oil and revenue, you will understand why the Western world couldn't understand why we remain poor.

Only God knows how developed Nigeria would be without corruption.