OIL THEFTS AND PIPELINE

VANDALIZATION IN NIGERIA

OIL THEFTS AND PIPELINEVANDALIZATION IN NIGERIA

PATRICK EDOBOR IGBINOVIA

B.Sc.; M.A.; M.Sc.; M.P.A.; Ph.D.; JPProfessor of Criminology and Criminal Justice and

Former Senior Research Advisor (Security and Strategy, SPDC),Department of Sociology and Anthropology,

Faculty of Social Sciences, University of Benin, Benin City

Safari Books LtdIbadan

Published bySafari Books LtdIle Ori Detu1, Shell CloseOnireke, Ibadan.Email: safarinigeria@gmail.com

© Patrick Edobor Igbinovia

Publisher: Chief Joop Berkhout, OONDeputy Publisher: George Berkhout

Frist published 2014

All rights reserved. This book is copyright and so no part of it may bereproduced, stored in a retrieval system, or transmitted, in any form or byany means, electronic, mechanical, electrostatic, magnetic tape,photocopying, recording or otherwise, without the prior written permissionof the author.

ISBN: 978-978-8431-38-1

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DEDICATION

This book is dedicated to the wonderful persons who gavevalue, worth and meaning to my life: My beautiful wife,Blessing A. Edobor-Igbinovia (JP) and the children: Aisosa,Zeme, Osato and Oyo; and my priceless sister, Mrs. Grace O.E. Ojumu, the first Nigerian Occupational Therapist.

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ACKNOWLEDGEMENT

I am profoundly grateful to Shell Petroleum DevelopmentCompany (SPDC) for their sabbatical appointment andplacement as Senior Security Advisor on Security and Strategywhich made the research for this book possible. I alsoacknowledge and appreciate TETFUND, University of Beninand its University Research and Publications Committee(URPC) for their support.

I am also immensely grateful to Prof. A.E. Davies, formerHead, Department of Political Science, University of Ilorinfor reading and making useful suggestions on the manuscript;and to Robert Bing, my colleague and pal at the School ofCriminology and Criminal Justice, The Florida StateUniversity, Tallahassee, Florida, USA; Chair and Professor,Department of Criminology and Criminal Justice, Universityof Texas at Arlington, Arlington, Texas, USA; Prof. I.O.Taiwo, Director-General of the Nigerian Institute for Socialand Economic Research (NISER), Ibadan, Nigeria, for helpingto write the forewords to the book and to Mr. and Mrs. IkueroOsabuohien Ikponmwosa for making their friendship andhome available to me during my research sabbatical withSPDC.

While I am highly indebted to all these persons for theirefforts, I am, however, wholly, fully and solely responsible forthe contents and views expressed and espoused in this book.

May God bless you all.

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PREFACE

Nigeria is the largest oil producer in Africa and the 6th oil-producing country in the world and the eleventh exporter ofoil in the world, shipping nearly 3 million barrels a day. Themainstay of the country’s economy is oil, contributing about90% of the nation’s foreign exchange earnings, 95% ofNigeria’s export earnings and 25% of the Gross DomesticProducts; and 65% of its budgetary revenue. Consequently,oil is Nigeria’s main source of revenue: it accounts for 80%of its revenue base making it the most important revenue-earner. The Nigerian economy is dependent on theexploitation of oil and the country’s future is very much tiedto crude oil production.

However, with an estimated population of about 160million people, Nigeria has been plagued with widespreadand unprecedented pipeline vandalization and the closelyassociated crime of oil theft or bunkering of crude oilincidents which have been taking a heavy toil on the nation’seconomy, revenue and development efforts. This has madeNigeria the spoilt child and laughing stock of the internationalcommunity.

To compound the unending, unabating and risingincidence of oil theft and its twin companion of pipelinevandalization, it appears that the menace are exclusive andpurely Nigeria phenomena as these forms of crimes hardlyoccur in other parts of the world. Indeed, Nigeria is the onlycountry in the world experiencing the disgraceful anddespicable criminality.

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The nefarious criminality are serious crimes underNigerian and international laws. They pose grave threats tothe operations of oil companies, stakeholders, oil-producingcompanies, the Nigerian economy and the general well-beingof Nigerians and the Nigerian nation.

Other serious dimensions to the problem of oil theft andpipeline vandalization in Nigeria are: (a) otherwise legal oil-lifters involvement in illegal oil bunkering; and (b) theinvolvement of locals aided by corporate oil thieves,politicians, security operatives, etc. in stealing crude oil. Forexample, it was reported in 2012 that western oil companieslost some $140 to $150 billion a year of Nigerian crude oil.Indeed, one third of all Nigerian oil is actually stolen secretly,loaded into tankers after bribes are paid to corruptgovernment officials, with Nigerian government receivingabout $10 billion a year of the amount while oil companiesmake $140 billion a year.

In 2012, the trade in stolen crude oil led to a 17% drop inofficial sales of oil in April – equivalent to around 400,000barrels a day. This was a whopping $1.2 billion (£772 million)lost in a month. In July 2013, Nigeria continued to lose 400,000barrels of oil, an equivalent of $7.3 billion daily to oil thievesand illegal bunkering and vandalism. This excludes #105 billionloss of refined petroleum products. The total loss amounts toabout 17% of Nigeria’s daily crude production. Similarly,between January and September 2011 alone (8 months), theNigerian Government lost over #62 billion to various acts ofvandalism on pipelines.

This preface sets out to explain the aim of writing thebook titled OIL THEFTS AND PIPELINE VANDALIZATIONIN NIGERIA. The book provides a scientific appraisal of thephenomena in the country in all its ramifications. Thepurpose is to fill the knowledge gap on the subject by

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presenting a scholarly evaluation of the evolution, etiology,causes, nature, extent, characteristics, legal aspects, trend,rationale and modus operandi of the phenomena in thecountry. Solutions and strategies to combat the menace werealso tendered.

Thus the book consists of eleven chapters and eleventables. Chapter 1 is the introduction which summarizes thewhole and offers conceptual clarifications of key termsemployed in the book. Chapter 2 discusses the historical,political and social overview of oil exploration in Nigeria.Chapter 3 does the same for the legal background. Chapter 4provides a discussion on the oil pipeline industry networkoverview. Chapter 5 discusses the review of the relevantscientific literature on the subject. Chapter 6 analyzes theincidents, extent and nature of oil thefts and pipelinevandalization in Nigeria. Chapters 7 and 8 widens the focusto look at the consequences, impact, characteristics, and mainfeatures of the phenomena. Chapter 9 offers a discussion ofthe causes and possible explanatory (general and specific)theories of the phenomena. Chapter 10 tenders solutions andrecommendations to stem the menace while chapter 11 puts aclosure to the overall discussion sketching the summary andconclusion to the subject-matter.

The book represents a pioneer effort both in itsdirection and focus as no systematic and comprehensiveanalysis of its kind has ever been undertaken or attemptedon the subject in Nigeria. It is hoped that the book wouldbe a useful and author i ta t ive information on thephenomena in Nigeria.

The book has been the most difficult work I have everwritten. This has been particularly so because cooperation fromoil companies, government off icia ls, agencies andinstitutions and other stakeholders was not forthcoming. It

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was as if the topic or subject was a taboo, state secret andno-go area.

However, I am grateful to Shell Petroleum andDevelopment Company (SPDC) for providing me asabbatical appointment as Senior Research Advisor onSecurity and Strategy in 2011 and 2012 which enabled me towrite the book. I owe also special thanks to the followingSPDC management and security staff for providing me thefriendly and conducive atmosphere and environment to workon the book: Nedo Osayande (General Manager, SustainableDevelopment and Community Relations), E.F. Aganmwonyi(General Manager Security, Shell Companies in Nigeria),Austen Ariodere, Solomon Asen, Haliman Oriabure,Magdalene Okosodo, B.O. Peters, Meni AiyeakpatakuEmuobonuvie, Noble Ejakpovi, Eunice O. Usifo, Erewa E.Johnson and Grace Uduehi; and to Nicholas Ogieva of theUniversity of Benin whose typing skills, graphic talents andeye for details made this book richer.

Several colleagues have patiently read through and clarifiedmy thoughts in various drafts. I am grateful to all of them fortheir immense inputs, invaluable suggestions and usefulcontributions which have improved the quality of andenhanced the richness of this book.

By offering this book, it is hoped that it would sparkinformed debate and decisive action for remediation from allstakeholders to stem the phenomena, which, perhaps,constitutes one of the most divisive, problematic, contentiousbut important, significant and critical issue in contemporaryNigeria.

I bear full responsibility for any of the book’s failings andshare whatever credits and strengths it may have with numerouspeople who helped to bring the book to fruition. If, as youread, you build and have a fuller, better understanding,

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comprehension and appreciation of the enormity of thechallenges of the menace that oil thefts and pipelinevandalization pose to the Nigerian nation and the urgent needto stem the phenomena, the writing of this book will not onlyhave been worth it but also have lasting value.

Patrick Edobor Igbinovia, Ph.D; JP.Professor of Criminology & Criminal Justice;Former Assistant Professor of Criminology and Criminal Justice,Alabama State University, Montgomery, USA;Former Senior Research Advisor for Security & Strategy (SPDC)B.Sc. (Criminology and Criminal Justice, 1976: NorthwesternOklahoma State University, Alva, Oklahoma)M.A. (Criminology and Criminal Justice, 1977: Sam Houston StateUniversity, Huntsville, Texas)M.Sc. (Manpower and Industrial Relations, 1980: University ofNorth Texas, Denton, Texas)M.P.A. (Public Law/Public Policy, 1982: The Florida StateUniversity, Tallahassee, Florida)Ph.D. (Criminology and Criminal Justice, 1983: The Florida StateUniversity, Tallahassee, Florida)

July 3, 2013