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Nigeria wants world's help to slow massive oil theft

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(Globalpost/GlobalPost)

Nigeria has appealed to foreign governments to help crack down on crude oil theft, the oil minister said Tuesday of the illicit industry that robs Africa's biggest oil producer of some $6 billion per year.

However, industry officials from Shell and other firms say more needs to be done within Nigeria itself to stop or at least slow the sabotage of pipelines and theft of oil that feeds a lucrative black market.

President Goodluck Jonathan discussed the issue with British Prime Minister David Cameron during a visit to London earlier this month, Oil Minister Diezani Alison-Madueke told an oil industry conference in Abuja.

In addition to efforts by the country's security forces, she said Nigeria wants international cooperation to crack down on laundering through global banks of oil theft money as well as funds from the refining of stolen crude, which often occurs abroad.

Jonathan "has also started reaching out to his counterparts in various countries where we feel some of our products are being refined in, and also where fiscal entities throughout the world are laundering the funds that are made as a result ...," said Alison-Madueke.

Highly organised crude oil theft has grown into a major problem in Nigeria, which derives some 80 percent of government revenue from the oil industry.

While a 2009 amnesty deal led to a sharp decline in unrest in the oil-producing Niger Delta region, criminality is still widespread, and some in the industry allege oil theft has worsened.

Besides robbing the country of an estimated $6 billion (4.5 billion euros) a year in revenue, it also often causes pipeline shutdowns since thieves sometimes sabotage them before stealing oil.

"I must acknowledge the federal government's effort at addressing these challenges, but there is still a lot more that must be done," Mutiu Sunmonu, managing director of Shell's Nigerian subsidiary SPDC told the conference.

"In the recent past, militancy has simply been replaced by industrial scale oil theft and sabotage. We and others have had to (cut) significant production, spend huge amounts on replacing and repairing hardware and deploying massive resources to clean up oil spills."

However, activists allege Shell does not do enough to prevent such spills or clean them up adequately when they occur in many cases.

A landmark 2011 UN report on oil pollution in Nigeria's Ogoniland region criticised Shell over control and maintenance of its infrastructure, saying the company's own procedures were not applied.

There have long been accusations of high-level Nigerian figures being involved in crude theft, as well as members of the security forces, which have repeatedly denied the accusations.

A recent report on the oil industry by a government-appointed task force alleged there was evidence members of the security forces profited from the illegal oil industry.

Nigeria is Africa's largest oil producer, with current output at around 2.0 million barrels per day. However, most of the country lives on less than $2 per day, despite the country's oil wealth.

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http://www.globalpost.com/dispatch/news/afp/130219/nigeria-wants-worlds-help-slow-massive-oil-theft-0