Oil thieves siphon 300,000 barrels daily, says governor

Nigeria is losing 300,000 barrels of crude oil daily to oil thieves who siphon the product out of pipelines in the Niger Delta oil for sale in the international market, a top official has said. James Ibori, governor of Delta State, one of the country's leading oil producers, told reporters after a security meeting between Nigeria's 36 state governors and President Olusegun Obasanjo on Thursday, that Nigeria was losing US $3.5 billion yearly to these massive thefts by highly organised criminal gangs. Oil transnationals have generally estimated the volume of oil lost through this wholesale theft known as "bunkering" at 200,000 barrels per day. But officials of Nigeria's petroleum ministry said the latest figures given by Ibori included the theft of refined products for domestic distribution from pipelines that are broken into. Fuel thieves breaking into pipelines have been blamed for causing several massive fires which have engulfed and killed more than 2,000 people scavenging spilt fuel over the past five years. Ibori said investigations by the security agencies had identified some unnamed individuals and countries involved in the trade of illegally procured crude oil and refined products. He said the government was going to deal with the problem from both "the sellers and users point of view". Oil industry sources said those involved in the syndicates siphoning crude oil from pipelines were highly skilled, with considerable knowledge and experience of oil operations. "Some of them are people who had worked in the industry or are still working in it," said an official of Royal Dutch Shell, which pumps about half of Nigeria’s two million barrels daily. Shell has reported losing 100,000 barrels a day to bunkering. Other sources said the gangs involved often worked in connivance top ranking navy officers, who arranged to escort the barges used in collecting crude oil to larger vessels and tankers waiting offshore. Most of it ends up in refineries on the West African coast and the world spot markets for crude, they said. In June, Obasanjo's government increased fuel prices, citing the need to discourage fuel smuggling to neighbouring countries where petrol is more expensive and the need to save about US $2 billion expended annually in fuel subsidies. Critics have accused his government of not doing enough to tackle corruption in the oil industry in order to make even bigger savings. "The government ignores concrete allegations of massive smuggling of crude oil and corruption surrounding the management of crude meant for domestic consumption," the Committee for the Defence of Human Rights group said in a statement on Friday. "Yet, blocking this leakage will generate more funds for development than the punitive tax imposed on Nigerians."