The Guardian: Oiling the wheels of death: Katharine Houreld reports on the trade in stolen oil in Nigeria, where the stakes are high and corruptions is rife: “Mutiu Sunomu, Shell's production manager, says that up to 60,000 barrels of the company's crude is stolen a day. Although he denies that the company tolerates such theft, which often profits powerful local leaders, he accepts that "it is strange that the thieves seem so familiar with our asset base [of pipelines and wellheads]". (ShellNews.net) 17 Nov 04

Wednesday November 17, 2004

Drums pulse through the humid air like a heartbeat. A ram is sacrified. The Egebesu boys, one of the gangs that between them steal many millons of dollars' worth of crude oil from Nigeria a year, are performing a religious ritual to their god of war to make themselves bulletproof.

The Nigerian government estimates that crude oil worth £5.5m is stolen from the country each week. Even for Africa's largest oil exporter, this accounts for nearly one-sixth of all oil produced.

"The gangs either bore directly into the pipelines or load trucks and barges from unsecured wellheads," says Jossy Aiguwurto, a Shell Nigeria security adviser. "The stolen crude is then towed out to sea in barges, where tankers wait, loaded with cash and weapons."

The oil - a higher grade than Gulf crude - is usually destined for refineries along the West African coast. One of the power companies in Sierra Leone is rumoured to consume large amounts of stolen crude.

"Sometimes, ships just buy enough to power their engines," says the owner of one tanker. "The crude is often contaminated, but ships' engines are very slow and will burn fuel that would be useless in most other places. A lot of Russians are involved in it [transporting crude] because when the old USSR collapsed, lots of ships were stolen or sold for a song. The Nigerian navy often acts as 'protection'. It's more than just agreeing not to arrest a barge or tanker. They escort it, with radar on, to protect it from all the other freeloaders."

Although the US has donated five former coastguard vessels to the Nigerian navy, few ships are detained. Impounded vessels often mysteriously vanish from police custody, lending credence to rumours that high-ranking Nigerian officials are involved in oil smuggling. Last August, the MT African Pride, a Russian oil tanker carrying 11,300 tonnes of stolen crude, went missing. A few days later, the tanker MT Jimohalso vanished from police custody. The vessel was recovered almost a month later at an island near Port Harcourt, Nigeria's oil-producing capital, with a new Russian crew and a different name painted on its side. Last week, three high-ranking Nigerian naval officials were charged with facilitating the vessel's disappearance. It is the first time members of the armed forces have faced such charges.

Mutiu Sunomu, Shell's production manager, says that up to 60,000 barrels of the company's crude is stolen a day. Although he denies that the company tolerates such theft, which often profits powerful local leaders, he accepts that "it is strange that the thieves seem so familiar with our asset base [of pipelines and wellheads]".

The oil thieves are not hard to find. In a one-hour helicopter ride over the mangrove swamps around Port Harcourt, 17 were sighted. The squat, square vessels usually huddle under overhanging trees to hide from the surveillance flights, but they are getting bolder. One creek sheltered 13 barges and a tug. An oil slick trailed for at least a kilometre behind them. No effort was made at concealment.

"Many of the gangs were originally armed by politicians," says one oil executive, speaking on condition of anonymity. "As we near elections, oil theft always rises, because they need to buy votes and weapons for their enforcers. After the elections, the politicians disown the gangs, which have now become so powerful that they actually pose a threat to the politicians they once supported. Transparency really works here - you know exactly who the criminals are."

Shell confirmed that around the time of last year's elections, theft from its pipelines in the eastern division peaked at around 100,000 barrels a day - nearly double the normal rate. The sudden influx of cash and guns into poverty stricken communities has also taken its toll. Amnesty International estimates that 500 people were killed in Port Harcourt in September.

Apart from the gang wars, bunkering itself is a dangerous business. The Egebesu boys say they lost three men in a fire recently, and three more were badly burnt when a spark from a boat's engine blew up the oil it was carrying.

However, it is not the thieves who suffer the worst accidents. Poor villagers often collect refined petroleum from leaking or vandalised pipelines. On September 16, a fire in Lagos left 50 people dead. Six more died in Port Harcourt at the end of October.

In 1998, an explosion in the town of Jesse killed more than 1,000 people. "Whole families died," says Sharif Bagnulo, who works for the NGO Family Care Association and was one of the first on the scene. "The price of petrol had risen and people were desperate for some free fuel. I've seen people carrying plastic bags full of fuel on the backs of motorbikes."

Each week, Nigerian newspapers report more deaths from explosions but, despite the high death toll, the amount of fuel taken by villagers is tiny compared with that taken by the professional thieves.

"The gangs are growing in size, becoming more territorial and more organised," says one Port Harcourt resident. "They don't need their political patrons any more. They are stealing oil and buying weapons themselves, becoming militias. Once they start selling offshore, that is very big money - and very dangerous. If this trend continues, the Niger delta will be a war zone during the next elections."

http://society.guardian.co.uk/societyguardian/story/0,,1352426,00.html