Oil bunkering threatens Nigeria’s economy, environment

       By Jon Gambrell

DIEBU, Nigeria — The first drops of crude float in the languid muddy currents of Nigeria’s oil-rich southern delta, then slowly grow into the splatter of a massive crime scene.
Oil thefts, long a problem in the Niger Delta, are increasing at an ever-faster rate despite government officials and international companies offering increasingly dire warnings about the effect on Nigeria’s crude production. Some 200,000 barrels a day — representing about 10 percent of the country’s production — are siphoned off pipelines crisscrossing the region.

While drums end up leaking in villages and are used to make crude kerosene and gasoline, the major thieves appear to belong to international criminal gangs that sell it into world markets, analysts and experts say. And the same Nigerian politicians and military leaders now targeting the small-scale local refineries that dot the delta likely are the ones benefiting from those huge thefts.
“This oil that you are buying is the same thing” as blood diamonds, said Patrick Dele Cole, a former Nigerian ambassador now spearheading a group trying to call attention to the thefts. “It is bought at the expense of people’s blood in the Niger Delta.”
Locals rationalize thefts
Oil is the lifeblood of Nigeria’s economy. Since the company that would become Royal Dutch Shell PLC discovered the first commercially viable well in 1956, oil earnings grew to account for some 80 percent of all government revenue in Nigeria, a nation of more than 160 million people. Although corruption sees much of that money frittered away, it still provides needed funding for projects in the country.
A state-sponsored amnesty program largely halted militant attacks in the delta in 2009, allowing production levels to return to more than 2 million barrels of oil a day. But while production climbed amid the relative peace, the level of thefts increased quietly and quickly across the region of winding creeks and mangroves about the size of Portugal.
Locals call the practices “bunkering,” which sees thieves use hacksaws and blades to cut into the pipes. When the companies see the pressure drop on their lines, they dial back the pressure just long enough for thieves to attach spigots to the lines. As the pressure rises back up, the thieves simply divert some of the oil out of the line to their own uses.
In Diebu, a village in Bayelsa state, the home of President Goodluck Jonathan, children ran and played around leaking drums of stolen crude oil. The crude likely came from lines run by Shell and Italian oil company Eni SpA, though residents there demanded money from visiting journalists to see the sites of the thefts. Many here view the thefts as their opportunity to have a taste of a commodity that built Nigeria’s sterile central capital of Abuja, a city of gleaming towers and massive highways. In Diebu, the locals pointed out a large clinic of empty rooms without medicine and a local doctor’s quarters that appeared to have squatters inside. The dilapitated schools had large holes where windows were supposed to be.

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