More about Stolen Oil

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It is probably obvious, by now, that I like BusinessDay. This is their editorial today:

In what seems to be a major policy thrust in international economic relations and in resolving the festering Niger Delta crisis, President Umaru Yar’Adua on Monday, at the meeting of G8 leaders holding in Japan called for global clampdown on trade in stolen crude oil.
The president emphasised that stolen crude oil deserved the same global treatment as that of stolen diamonds.

Yar’Adua said measures must be taken to “dismantle the criminal dmension” of the problem in the Niger Delta. And for good measure, he said the problem in the region was being aggravated by international cartels.

The Nigerian leader drew attention to another aspect of the Niger Delta challenge, the criminal aspect, in this case “those who use the cover of militancy to steal our crude oil and engage in all forms of violence.”

We commend the president for drawing attention of the international community to this ugly trend. This is an issue that hitherto had been discussed in hushed tones and privately, too. It is an open secret that Nigeria’s crude is stolen daily, that beyond the official production figures given to meet OPEC quota and local consumption, a lot more is produced through illegal bunkering and from offshore rigs.

According to Freedom House, a US-based oil industry analyst, out of the 1.9 million barrels of crude oil Nigeria produces per day, she loses 10 per cent to oil thieves, part of the proceeds of which are spent on criminal activities in the Niger Delta.

We can draw a parallel with the role diamonds played in the civil wars that took place in Liberia and Sierra Leone in the 1990s. The rebels that waged war in Liberia were able to sustain their rebel activities, which ultimately escalated to become a civil war on account of the money they made from illegal mining and sale of diamonds.

A number of questions, naturally, arise from President Yar’Adua’s submission. Who are those involved? Apart from the militants, who hide under the cover of agitation, are there international thieves helping to fuel the theft of Nigeria’s crude oil?

If they exist, is there a nexus between the objective they pursue and the criminalisation of the Niger Delta struggle?

In all of this, what is the role of the multinational oil companies engaged in oil exploration in the country especially in the Niger Delta region?

There is talk about the use of satellite to monitor offshore oil drilling. Is it effective and if yes, are those in charge giving the Nigerian government the true picture of the situatiion? If they are doing that, has the government taken any steps to address it?

More importantly, does Nigeria have the capacity to monitor offshore exploration activities of the oil companies and enforce compliance to production limits?

Answers to these questions are important as they will point the way to dealing with the issue.

President Yar’Adua chose the right platform to raise the issue. The international oil companies are all from the G8 countries. Their governments will need to do internal checks to ascertain the culpability or otherwise of their companies in this criminal behaviour.

We urge him to quickly take the matter to the United Nations as he has promised. Only concerted efforts at the global level can arrest the situation.

The president’s pledge that the much talked about Niger Delta Summit would hold is reassuring. Resolution of the crisis in that region of the country holds the key to Nigeria’s economic and social transformation.

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