Business in Ghana

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We Have To Track Down The Oil Thieves

Posted by Business in Ghana on July 23, 2012

By Patrick Dele Cole

It seems the Nigerian government is finally waking up to the financial impactillegal theft and sale of crude oil is having on our nation, as well as on the oil-producing Niger delta region.

Last month the minister of finance said she believes up to 17 per cent of the country’s production was lost in April. This means we could be losing up to 400,000 b/d.

About $9bn of revenue, equivalent to almost a third of the federal budget, is thus under the control of a criminal cartel with tentacles that stretch from the Niger delta, through the armed forces into the heart of organised crime and out into the rest of the world.

After years of ignoring the fact that we lose billions of dollars every year, it is a sign of progress that the government is acknowledging the scale of the problem and announcing steps to tackle it.

Unfortunately, when we take a detailed look at the structures behind oil theft and the amounts of money involved, the scale of the challenge becomes clear and the ability of the government to deal with this issue alone is called into question.

The taskforce announced by the minister of petroleum consists of representatives from the international oil companies, the armed forces and the government. They have been mandated to identify ways to deal with the issue. But there is a problem built into this attempt at a solution.

How can we expect our armed forces to proactively seek to put an end to a trade that makes many in their ranks rich? Four years ago I wrote: “It is said in the Nigerian military that you will never find a poor admiral.”

If anything, the situation has worsened since that time. The Niger delta is now a much sought-after posting in the military.

It is also questionable whether the government has understood the level of resources required and the action necessary to have an impact. Oil theft is facilitated by the people of the Niger delta because they do not have an alternative. Real and visible development is a pre-requisite for this to change, but it will take time, effort and huge resources. The resources available to those involved in oil theft are astronomical and must be met with an equal response, backed by political will.

We need to look beyond our borders for help that can make a difference. The recipients of the stolen oil are refineries in eastern Europe, Africa, Asia and perhaps even the US. The money used to finance the largest transactions moves from bank to bank in these regions. This money can, and should, be tracked. The mechanisms exist already through anti-terrorism and money laundering legislation. If we can make it more difficult for oil theft to be financed, we can begin to make progress towards a long-term solution.

The scale of the theft means that large ships are used to transport stolen oil to the refineries that process it overseas. International governments own and control the satellite tracking technology that can provide the evidence to prove complicity. They should provide the government and international security organisations with access to this tool.

The end-user of the fuel that is refined is often the western consumer who, while struggling with austerity, is also conscious of the origin of the products that he or she buys. We must raise awareness of the scale and consequences of oil theft and seek to turn the discerning consumer into an ally.

In my village in Abonnema, the social and environmental impact of oil theft is obvious and immediate. The constant sheen of oil on the surface of the river, the boats lined up on its shores that have been “arrested” by the taskforce for being outside their “approved window of operation” and the distressing lack of girls over the age of 14 in secondary education because they are pregnant with the babies of soldiers are just some of the ways in which this trade has an impact on our society and environment.

The lack of development in the delta, the impact of the oil industry on the environment and the social decay associated with poverty and conflicts have been debated for years. What is less clear to international audiences is the fact that oil theft sits at the centre of these problems. The social impact on young men offered immediate riches over education is obvious. The riches are offered by militant groups. The environmental damage in the delta is known worldwide, but cleaning up the region today is pointless without a policy to end the theft that contributes significantly to the damage done. What is cleaned up today will be spilled again tomorrow.

If you are able to tackle holistically the issue and demonstrate the political will and desire for a long-term solution, then a campaign that seeks to end the illegal trade of oil, combined with a genuine programme of development, can provide the foundation for a solution that has a chance of working. Tracking the money and the ships are just the first weapons we have in our armoury, we must work together to develop others while ensuring that our ultimate goal, development, is achieved.

We need the rest of the world to provide the support, pressure and the targeted solutions that are needed. We have to stop the theft.

……………………………………………………………..

Patrick Dele Cole is a businessman and politician from Rivers State. He was a founding member of the ruling PDP party and a special adviser to President Olusegun Obasanjo between 1999 and 2001.

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One Response to “We Have To Track Down The Oil Thieves”

  1. the corruption is too much Ghanaians deserve better why should bemoan about oil shortages whiles we have oil in this country.

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