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Theft and Sabotage Destroy Nigeria's Oil Dreams


“Industrial scale oil theft, sabotage and technical problems” have caused output from the oil-rich Niger delta to plummet to a four-year low, the FT reports, and that’s only the beginning of the story.

Shell announced in July that thieves were stealing 60,000 barrels of oil every day—just from Shell’s lines. The Nigerian government, which gets 80 percent of its revenue from oil, lost $10.9 billion between 2009 and 2011 due to theft and sabotage. “Oil fouls everything in southern Nigeria,” Tom O’Neill reported for National Geographic back in 2007. “It spills from the pipelines, poisoning soil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try anything to scoop up a share of the liquid riches—fire a gun, sabotage a pipeline, kidnap a foreigner.”

Managerial incompetence and corruption are largely responsible for creating an environment that encourages widespread theft. In 2009 the government began making payments to rebels to encourage them to stop kidnapping oil workers, but since then, the FT reports, “the theft of oil has grown into a vast and lucrative enterprise involving well-connected officials and security personnel.”

As corruption becomes ever more entrenched, average people are mired in poverty. Port Harcourt, smack in the middle of Nigeria’s oil-producing region, rots and burns and overflows with garbage. There are no schools, no jobs, no electricity, no health care. Acid rain falls from the sky; oil leaks into the water.

Nigeria matters: falling output affects the global price of oil. Bad governance across the country has spawned numerous insurgencies and independence movements and created lawless areas where terrorists can live comfortably and recruit disaffected young men to join their ranks. “Nigeria had all the makings of an uplifting tale: poor African nation blessed with enormous sudden wealth,” O’Neill continues. Corruption and poor governance and environmental destruction are devouring the country. Is Mr. Putin is paying attention?

[Two man stand beside local oil distillery mechanisms operated by oil thieves in Bayelsa State of the Niger Delta on April 11, 2013. Photo courtesy of Getty Images.]

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  • Corlyss

    What? No mention of China, who’s been nosing around Nigeria’s oil fields for years, and paying off various parties?

    • SquareX

      That is BS – Chevron, Texaco, Shell, Total & AGIP (all Western companies) are the major players.

      China barely features.

      How do I know? I’m Nigerian.

      • Corlyss

        Your claims to being Nigerian don’t trump reports that issue from Nigeria for the last several years. Batchelor has been reporting on the Chinese beavering away in Nigeria at least, at least, since Goodluck Jonathan was elected.

        Representative sample:

        Between 2000 and 2010 annual Nigerian-Chinese trade increased nine-fold, from $2 billion to $18 billion. Ten major bilateral agreements concerning commerce, agriculture, tourism and security were signed during that period. Nigeria imported more goods from China in 2012 than it did from the U.S. and India combined (Nigeria’s number two and three import partners, respectively). Today, more than 200 Chinese firms operate in Nigeria. While in Beijing last week, Nigerian President Jonathan signed nine memoranda of understanding with the Chinese government. China agreed to provide Nigeria with a soft loan of $1.1 billion loan in exchange for Nigeria agreeing to increase its daily supply of oil to China ten-fold (from 20,000 barrels per day to 200,000) by 2015.

        If China cultivates the same level of interest in Nigeria that it did in Sri Lanka, look for more pressure on the Nigerians to dispatch the criminal gangs even as China uses them to disrupt Western interests.

        • SquareX

          You clearly don’t know what you are talking about.

          Have you looked at the equivalent figures for Western investment (in offshore oil & gas concessions alone)?

          The problem with Americans is they believe they know it all. I won’t bother arguing with you.

          • me

            Just because you claim to be Nigerian doesn’t make it so. Proof. Also, even if you ARE Nigerian, it doesn’t make you an ‘expert’ on anything in your country….unless, of course, you’re a politician in on the graft.

  • Diggsc

    So…what you are saying is that oil could bring prosperity to the Nigerian people, but the lack of an effective civil government is keeping that prosperity in the back pockets of a few individuals, while people not associated with the oil companies in any way are befouling their own environment? Sounds plausible, even likely. But you’d never know such a thing could happen when the Envirotards speak. According to them, the evil is all from the oil companies, and the only fix is more corrupt government and more hands on involvement of the people.

    Go figger.

  • disqus_sBKZDGKiG8

    Why does this surprise anyone? Is there any well run African country? I think there is one. Namibia used to be run pretty well. Any others?

    • me

      Nope. The whole continent is dysfunctional in every possible way–even Egypt.

  • GalSitty

    Unfortunately, the problems Nigeria is facing is not undocumented for oil discoveries in developing nations. This phenomenon is known as the “resource curse” and often causes developing nations to suffer more than they gain from oil discoveries.

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