As night falls on a recent evening in the mazelike creeks of the Niger Delta, several oil thieves plunge into the dense, green mangroves along the Nun River.
Above the forest, black coils of smoke rise to the sky. The river hums with outboard motors as skiffs carry residents to communities in the web of Nun offshoots. The boats halt at military checkpoints, barges manned by idle soldiers. Silhouetted passengers raise their hands to show they are unarmed and not transporting stolen oil.
Daniel Sekibo leads the way. We are making our way to a camp near a Nigerian Agip Oil pipeline where he and his team, young men in their teens through thirties, refine stolen oil. The camp is a 15-minute walk from their village center, which is little more than a bar on a wooden deck a few feet above mud and water polluted with oil and trash.
It is dark as we walk, and quiet. The only sounds come from shoes pressing on the hard sand and conversation within the group. Sekibo, 31, points to some bushes where, he says, Nigerian Agip Oil has spilled crude, poisoning the vegetation. His younger brother and cousin, who work for him, joke with each other and ask Sekibo about the breaking of his engagement. “I have so many girls, I don’t need to get married,” he boasts. The three laugh nervously. Because their village is known as a hub of oil theft, the military has been visiting frequently. During the last raid, days before, soldiers left only after Sekibo and other residents paid them bribes.
We met at the bar before setting out, and Sekibo introduced me to a friend of his, a 34-year-old who asked that his name not be published. (Sekibo’s name has been changed to protect his identity, too.) His friend said he’d been stealing oil for six years. The government, he said, needs to give everyone a basic salary of 70,000 naira a month (about $427); otherwise the theft will not stop. Although oil companies operating in the delta have paid villages reparations after especially bad oil spills, the region remains underdeveloped, with few roads, little electricity or clean water, and impoverished schools. The nearest hospital is two hours away. Several in the bar were wary of a visiting journalist, but Sekibo assured me, “I’ve explained to them why it’s important you watch us work. For people to know how we are suffering here.”
More than 90 percent of Nigeria’s budget comes from oil and gas; until recently, the country was Africa’s leading exporter of oil. And yet Nigeria refines less than one-fifth of its own output—so little, in fact, that it has to reimport its own oil, refined elsewhere, at a higher cost. This is the situation that Sekibo and his peers exploit. In their eyes, not only are they stealing oil as a tax on the companies that pollute their communities, but they are also providing a much-needed and more affordable source of domestic fuel. And even though politicians floated the idea of building refineries in the delta, it hasn’t happened, and there are few jobs. A 2011 report by the Foundation for Partnership Initiatives in the Niger Delta finds the youth unemployment rate in the region is 40 percent.
To steal the oil, men hack at a pipeline with saws and siphon the oil through holes they cut in the metal. Often they weld their own spigots to the pipe so the oil flows directly to their barrels. During one of the last times Sekibo and the others took oil this way, hundreds came in boats to collect the crude. As each boat pulled up to the tap, they filled them with the sticky liquid. The clusters of palm trees provided little cover, however. When a barge carrying armed men accompanied by soldiers arrived at the pipe to take their own oil, Sekibo was forced to run. “We are not happy with them,” he says.
The cooking, or improvised refining, process takes about six hours. First they boil the crude in a drum. The heated oil then moves through a pipe, which is cooled by water, and into a container. Next it’s filtered into gasoline, kerosene, and diesel. The unfiltered oil is tossed back onto the land and into the water.
When we reach the camp, Sekibo tells me the military has destroyed most of his cookers, but a few are still operable. In a wide clearing on the shore of the Nun, some of the men pull out a container of crude and pour it into a drum. As they prepare to light it, a man runs up holding a machete and screaming, “Get out of here! Get out of here!”
Sekibo tries to calm him. But other men armed with machetes and planks of wood threaten to attack everyone present. We are herded back into the village, where a fight breaks out between the intruders and Sekibo’s men. Sekibo struggles with a man who is trying to break my photographer’s camera. Our attackers are rival thieves angry they were not told that we were coming. The man Sekibo is fighting is his sister’s husband, who works for the other group. “They’re just jealous!” Sekibo yells repeatedly. A man approaches me. “You can’t do this. You can’t come here without informing us,” he says. It turns out that his group wants to extort payment from us before we go to the camp. Television crews have paid them for interviews in the past, and they want a cut.
Dressed in slacks and a button-down shirt, Sekibo has a confident swagger. He comes from a family of scholars: His mother is one of two teachers at the local school, and his late father was a doctor. He went to Niger Delta University and came back to settle after graduation only to find that the best jobs in his community involved stealing and selling oil. No one was farming or fishing anymore; the place was too polluted for that.
Sekibo attends law school and dreams of taking the oil companies to court, but he’s spent seven years to get to the point where he runs his own oil theft operation. The work is dangerous, and not merely for the violence. He and his employees breathe in toxic fumes and often suffer burns when fires break out as they cook crude oil on open flames. The work also pays well. “This is the best business I have ever experienced in my life,” he says. His team can gross 1 million naira ($6,098) a day. Sekibo has been able to buy two cars and a house in Yenagoa, the nearest city.
“It’s not OK for us to be doing this, we know, but the government is not looking after us at all,” he says. “The level of treatment they’re giving us—are we goats? We’re human beings like them! There were no jobs here, so what do we do? This was the only solution. We don’t have any other way to fight.”
The illegal refineries do have expenses. The first step—tapping into the pipeline—costs about $6,200. The camp manager is paid $666 a month, and camp security earns about $188. Oil company workers need to be paid off so they can reduce the pressure in the pipes, allowing refiners to tap in and redirect the oil. Setting up the camp itself costs about $4,400. Local refiners and exporters often have standing arrangements with the security personnel and military in the region, giving them monthly payments or payment for each cargo that passes through the checkpoints.
Exporters make billions of dollars from stolen oil, and Sekibo is among many young people in the delta who make a decent living by refining locally. The delta-based research organization Stakeholder Democracy Network says an average-size illegal refinery in the delta employing 12 to 20 people can earn more than $1 million a month. “It’s difficult to stop this business, because it’s so lucrative,” says Inemo Samiama, country director at SDN. “What jobs will you propose to them that will let them earn as much as in the refinery?”
Oil theft may cost Nigeria $8 billion a year. In October, Chatham House, a London think tank specializing in emerging markets, released a report stating that 100,000 barrels a day were stolen in the first quarter of 2013. The Nigerian government added that 400,000 barrels a day were lost altogether from spills and pipe closures because of theft, resulting in a decline of as much as 20 percent in government revenue. The office of Nigerian Finance Minister Ngozi Okonjo-Iweala says the figure of stolen oil has recently dropped from 100,000 to 40,000 barrels a day, but the minister did not answer multiple requests for comment on the reasons for the drop. Nigerian Agip Oil, which runs the pipeline in Sekibo’s community, says it alone loses 20,000 barrels daily. Nigeria normally produces 2.2 million barrels a day, according to Amrita Sen, chief oil analyst at research consulting company Energy Aspects. That number fell to between 1.85 million and 1.9 million in 2013. “There are already signs that there will be some months where Nigeria is no longer going to be the biggest exporter out of Africa on a consistent basis,” Sen says. “Oil theft is now a part of the Nigerian industry.”
Sekibo and his peers are but a small part of what has become a shadow industry. The stolen oil is not sold only locally. It reaches foreign markets, too. Bunkering, as large-scale oil theft is called, requires vessels filled with tons of oil siphoned from pipelines. The vessels—said to be owned by Nigerian businesspeople, former and current military officials, and politicians—travel to wherever the oil commands the highest price. Chatham House’s report stated that bunkered oil is sold to refineries in other parts of West Africa, the U.S., Brazil, China, Singapore, Thailand, Indonesia, and the Balkans. The profit from the illicit trade is laundered through foreign banks, cash smuggling, shell companies, tax havens, the bribing of bank officials, legitimate businesses, and the purchases of luxury goods, all of which is done in New York, London, Singapore, and Dubai, among other international financial centers. Most of the money returns to Nigeria; the rest of it disappears. In the aggregate, small-scale thieves such as Sekibo constitute only 20 percent of the losses to theft, according to the SDN.
“People have to take care of themselves. This business helps families. It lets them build houses and send their children to school in the U.K. and Ghana,” says Zide, 32, a housewife who trades in stolen oil. (She requested that her last name not be published.) “What we take doesn’t go anywhere.”
Zide lives in a Yenagoa neighborhood of low-slung brick houses. One afternoon in a light rain, she speaks outside her home and quickly becomes agitated about the problems in the delta. “When you go to my own community, we don’t have roads, we don’t have water, we don’t have light,” she says. “It’s not good. So when they found out that there is this way to refine crude to kerosene and diesel and fuel, everybody applied. Since the crude is from us, we will just leave it for people to just come and take it. To be sincere to you, it helps a lot. The moment that they stop people from cooking or taking crude, there will not be peace anywhere.”
Some of her male relatives introduced her to the trade. She takes the drums of oil to vessels owned by exporter cartels and sells them for 8,000 naira to 10,000 naira ($49 to $61) each. A drum of oil officially sells for between 18,000 naira and 20,000 naira ($110 to $122) in the area. Once she ran into the army, which burned her four boats of oil. She escaped arrest, but she had taken out loans for the trip and lost 680,000 naira ($4,146).
“We don’t like doing this; the risk is there. We are afraid. We’re just doing this for money and to take care of our needs,” she says of her work. She worries about what would happen to her children if she were caught. “They should leave us alone and go after the ones taking all the oil.”
The Chatham House report followed the findings of Nigeria’s Petroleum Revenue Special Task Force, which released the results of its investigation into the oil industry in 2012. Chaired by former anticorruption official Nuhu Ribadu, the task force found that from 2002 to 2011, no-bid oil licenses, unpaid royalties and bonuses, informal contracts with oil traders, and other questionable practices had caused the government to lose billions of dollars in revenue. “The problem with Nigeria is that the underlying issues are structural: poor governance, poverty, and illiteracy—unless those issues are addressed by the government, the result is always going to be oil theft,” says Energy Aspects’ Sen.
Ribadu led Nigeria’s Economic and Financial Crimes Commission from 2003 to 2007. Today he says he’s disappointed at the commission’s inability to indict government and military officials involved in oil bunkering. The EFCC has targeted hundreds of low-level oil thieves, yet no high-profile prosecutions have occurred. “There has been a loss of steam,” he says. During Ribadu’s term, he was hailed as an anticorruption crusader, securing numerous convictions of individuals committing oil theft. The list included officers in the armed forces. He visited refineries that bought stolen Nigerian oil in countries such as Brazil. When he started his position, 100,000 to 150,000 barrels a day were being stolen. He says that amount went down to fewer than 10,000 barrels by 2005. Although he says he doesn’t put it past oil companies to overstate their losses, he blames the government, army, and navy for looking the other way. “There are only about eight exit points in the Niger Delta where you could take something out of Nigeria into the sea. You could stop them; there are just eight,” he says.
Royal Dutch Shell (RDS/A), the biggest oil operator in the delta, agrees with him. “There are only a limited number of channels through which major vessels can sail out of the delta to take this crude oil to the seas,” says Philip Mshelbila, communications manager at Shell Nigeria. Shell says it had total losses of $250 million in the quarter ended October 2013, mainly from theft, associated oil spills, and the costs of repairing its pipelines after the tampering. Last spring it had to shut down both of its major pipelines, each carrying 150,000 barrels a day, after severe damage. After one was restored in October, the pipeline was shut down a little more than a week later after reports of new leaks resulting from theft. On an average day, Shell says it can lose as many as 60,000 barrels.
To reduce theft, Shell has 600 surveillance contracts with communities in the delta to monitor its pipelines. The company also flies helicopters over the pipes twice a day and is exploring the use of sensor technology; it’s planning to bury new pipelines farther underground and to cover others with concrete slabs. Yet the rate of theft hasn’t decreased. There are signs that oil theft will push foreign oil companies, including Shell, Chevron (CVX), Total (TOT), and Eni (ENI:IM), to sell off their less profitable oil blocks in the delta. Shell, Total, and Eni are selling a combined 45 percent stake in four oil blocks; Chevron is selling five blocks. Since 2010, Shell has divested from eight blocks and is now selling its Nembe Creek pipeline. It is, however, leading a joint venture to spend $1.5 billion on a new pipeline that will bypass communities where there has been frequent oil theft. The companies are not so much solving the problem of oil theft as they are evading it.
“They invaded my home at four in the morning,” the man known as General Pius tells me. The men who raided his house last October were oil thieves, he says, and they were angry he wouldn’t let them steal from pipes near his residence. Fearing for his life, he fled; when we spoke by phone in November, he was holed up in the delta city of Warri. He didn’t know when he could safely return home.
Pius, 38, was a feared militant during the 2000s, the heyday of rebels who sabotaged pipelines, kidnapped foreign oil workers, and created general havoc for oil companies working in the Niger Delta. But when the government offered amnesty to 26,000 militants four years ago, he and his 500 footmen took their buyouts (a monthly stipend of 65,000 naira, or $396), and Pius turned to hiring out his two boats and landing craft to oil companies to make extra money.
Like Pius, Sekibo is a former militant. He also entered the amnesty program and receives a stipend. Unlike Pius, Sekibo returned to stealing oil when the jobs the government promised never materialized. “Amnesty gave us temporary confidence that development was coming, but they did not fulfill their promise,” Zide, the oil trader, says. General Pius concedes things have not improved since amnesty was put into place. “The program is not working,” he says. “The money is not enough to meet a married father’s expenses; this is why some of the militants have gone back to doing bunkering, though it is not helping matters.”
Former militants were supposed to give up all their arms as part of the amnesty program, but thousands of guns are still around the creeks. Onyema Nwachukwu, a military spokesman in the Niger Delta, says that soldiers regularly engage with what he calls “daredevil criminals” in firefights and that they had recovered more than 14,000 guns, including machine guns and AK-47s, when soldiers destroyed refining camps. When asked about corruption among soldiers, he becomes defensive.
“The soldiers cannot be looking the other way,” Nwachukwu says. “Some believe the oil is their property, their resources, their right, their entitlement, and they’re so hellbent that they’ve taken these illegal refineries even deeper into the mangroves. It’s a tedious operation.” He goes on to say the companies’ oil theft statistics could be “trumped up because they have interests to protect. Who is scrutinizing the theft figures being peddled by these multinational oil companies?” Nwachukwu says they would go after the architects of oil theft cartels if they could; their mandate, though, is to arrest thieves when they are actually stealing, transporting, or distributing the oil. They then hand the suspects—more than 1,400 as of last October—to the Economic and Financial Crimes Commission, with limited success. He tells a story about arresting a local man for running an oil theft business. The man came to army headquarters with a bribe of millions of naira and an offer to buy a house for a senior officer. The military paraded him in front of the media anyway. “And at the end of the day, where is he? He’s mocking us! He’s free!” Nwachukwu says.
A 2009 U.S. diplomatic cable obtained by WikiLeaks quoted a Nigerian official naming a politician and a military officer as heads of oil theft cartels. In the cable, Tony Uranta, then a member of a government panel on the Niger Delta, accused the late General Shehu Yar’Adua, a brother of former President Umaru Yar’Adua, and former Vice President Atiku Abubakar of being top oil thieves. Now secretary-general of United Niger Delta Energy Development Security Strategy, Uranta says that because he’s trying to work with the government to bring development to the delta, he does not wish to explain his allegations further. “If it has been accepted that WikiLeaks has access to real records, you should take them as such,” he says now.
When asked why he stopped stealing oil and started impeding other thieves, Pius says, “I want to protect our environment.” All forms of oil theft have been devastating. Leaks spring when the pipes are punctured for siphoning. And only about 40 percent of the crude oil is used in local refining; the rest is discarded into the environment. The oil companies are not blameless: Alagoa Morris, a field monitor at Environmental Rights Action, an advocacy organization, says 90 percent of oil company spill sites he has visited in the delta have not been cleaned. Plant life has been stunted, fish killed, wildlife poisoned, and crop yields diminished from contaminated water. Longtime foods such as the cocoa yam have almost gone extinct, and residents still drink from, bathe in, wash cookware and clothes in, and use the toilet with the same polluted water. “The companies are not cleaning up. At best what they do is set the place on fire and turn the topsoil upside down or dig a pit to bury the pollution,” Morris says. The United Nations has said it would take 30 years and an initial investment of $1 billion to clean up the dangerous levels of pollution and environmental degradation in Ogoniland, an area that is only 1 percent of the delta.
Cleanup efforts have been corrupted, too. Oil companies, for example, can hire contractors. As a result, residents in some communities conspire with contractors to sabotage the pipes—not to steal the oil but to give the contractors more work for a kickback. Others target the pipelines simply as a political protest. “There are residents who are not happy that the companies are not doing anything in terms of development in their communities,” Morris says. “So they burst the pipes in the hope that the companies will sit down with them at the table to discuss community development projects.”
After the riot in the village, the photographer and I are led to a community leader’s house near the dock where we first arrived. We are told we cannot take our boat out (a two-hour ride) until the morning. Through the night on the house’s porch, we watch the leader’s men guide boats filled with stolen crude into the dock, and then attach their long green hoses to pump the oil into storage containers to be refined later. Women drag jerrycans of crude and refined oil back and forth from the continuous stream of boats, buying and selling. Oil-soaked teenage boys wearing headlamps tirelessly transport oil from the pipeline on wheelbarrows; giant fires, from cooking the oil, burn beyond them.
Sekibo creeps onto the porch at one point and says he needs to get a ride with us the next morning. “I have to get out of here. I need to get back to school,” he says urgently. His village’s elders are upset with him. In the delta, where greed and paranoia abound, residents told us, neighbors have killed each other for less than what had happened that night.
“When I was growing up, companies would come drill wells, they would destroy our land,” Sekibo told me earlier. “We are the beneficiary owners of this land and deserve compensation. The pipeline is free to everyone including the smallest child. It’s war!” He suddenly seemed tired. “We are killing ourselves over this pipeline.”
Shortly after daybreak, as we head to our boat, Sekibo walks to the water’s edge. The river, once blue, glows dully from beneath a sheen of oil. Towering, tangled trees and bushes stand atop rotten soil that has long soaked up spills. But for the moment, the black smoke has cleared.
Okeowo is a Bloomberg Businessweek contributor.
