“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.]