Oil Bunkering: The Informal Economy of the Southern Nigeria
Photo credit: AKINTUNDE AKINLEYE/Reuters
This paper is an extract from Pleasure's undergraduate dissertation at Birkbeck, University of London. It is aimed at understanding the perspective of Niger Delta Indigenes in Nigeria over the illegal trade carried out in the region. The Niger Delta region is an oil-rich region with several multi-billion dollar international companies plunging the region, yet, the region is one of the poorest and most polluted region in Nigeria. The indigenes of the region have resulted to tampering of the oil well heads and vandalizing oil pipelines to illegally refine these products and provide a means of income for themselves. This has caused a huge financial downturn to the economy of Nigeria and resulted to the Federal government in applying several measures in stopping the trade in this region. Recently, the Federal Government has handed over a new pipeline surveillance contract to an ex-militant leader in the region to curb this menace.Download ‘Oil Bunkering: The informal economy of southern Nigeria’ or scroll down to read an extract.
Photo credit: AKINTUNDE AKINLEYE/Reuters
Excerpt
(pg. 1-2)
"Like a cancerous growth, illegal refining in Nigeria eats away at the country's resources and pollutes the environment, leaving a trail of destruction in its wake."
Growing up in the Niger Delta region of Nigeria, I was exposed to the damages that illegal oil refining has caused to the oil producing communities and this desire to contribute to my community and the world at large, has fuelled my passion to carry out research on environmental pollution and management. The business of illegal oil bunkering, commonly referred to as “Kpo-fire” (Fyneface et al., 2022; Glas & Ibietela, 2018) is an extensive and booming business in the region and this can be traced back to the 1990s when artisanal refining began in the Niger Delta region. The Niger Delta, which is the oil-rich region of Nigeria, has been subjected to environmental degradation and pollution (Gbakena and Ariole, 2020) due to oil exploration and production by international oil companies and oil pipeline vandalism (Bodo, 2019). Nigeria was the fifth largest producer of oil in the world but has dropped due to several challenges, but most especially, illegal oil bunkering (Chika & Alete, 2022; Onyi-Ogelle & Jared, 2021).
The rise of illegal refining in Nigeria can be attributed to numerous causes, such as, poverty, unemployment, and the lack of economic opportunities in the Niger Delta region. Additionally, corruption and weak governance have contributed to the proliferation of illegal refining, as officials have been known to turn a blind eye to the activities of illegal refiners in exchange for bribes (Bodo, Gimah and Seomoni, 2020). The illegal destruction of pipelines to disrupt the movement of petroleum products for self-purpose and/or specific group purpose for black-market sales in any aspect is prohibited by Nigerian law and any individual or corporation engaging in such activities is committing economic sabotage (Chika and Alete, 2022). Crude oil theft in Nigeria makes up for 10% of all illegal financial flows from Africa each year, totalling US$6 billion (Umar and Mohammed, 2021)
In a special report in the GbaramatuVoice Newspaper (Henry, 2019) discussed about the negative impact of the oil spill in communities in Niger Delta, affecting waterways leading to deaths of at least five (5) persons bi-weekly. The Nigerian government has made several attempts to clamp down on illegal refining, including the establishment of a task force to combat the practice. However, these efforts have been largely ineffective, as the practice continues to thrive due to the high demand for petroleum products and the profitable aspects of the trade. The Nigerian National Petroleum Corporation (NNPC) recently contracted oil
pipeline surveillance and monitoring services to the renowned ex-militant leader, Government Ekpemupolo, also known as Tompolo, to fight the issue of oil theft and pipeline vandalism, although this wasn’t the first time that such contract had been awarded. The oil Pipeline surveillance contract was first awarded in 2012 by the Government of President Goodluck Jonathan to different militant leaders and groups in the Niger Delta region (Emmanuel and Onwubiko, 2015; Adibe, Nwagwu and Albert, 2017) and the contract was later stopped by the President Buhari administration in 2015. In 2022, the government had a change of mind to award the contract to the ex-militant leader, after a seemingly increase in the cases of oil theft, failed measures in securing the oil pipelines (Onuoha, 2016) and birthing new group of militants, called the Niger Delta Avengers (NDA) that brought the nation’s oil production to a “22-year low” (Tife and Ulf, 2016). There remain answers on if this new contract will severe the illegal oil bunkering crisis in the Niger Delta and what are the community members perspective with this new development, although there have been several media and academic reports on the impact of this initiative when it was first implemented (Okafor and Olaniyan, 1970; Emmanuel and Onwubiko, 2015; Iro, 2022; Mary, 2022).
Illegal refining in Nigeria is a controversial issue that elicits different perceptions from the community. On one hand, some people believe that illegal refining is a necessary evil in the face of the inadequate provision of government refineries and a lack of employment opportunities (Chika and Alete, 2022) . They argue that it provides a means of livelihood for thousands of people, particularly in the Niger Delta region, where crude oil is extracted. On the other hand, many people condemn illegal refining due to its negative impact on the environment and human health (Henry, 2019; Udoh, 2019). Illegal refineries typically operate in a crude and dangerous manner, leading to oil spills, air and water pollution, and the destruction of the ecosystem, even death. These activities have led to an increase in health problems, such as respiratory illnesses and cancers, among people living in the region. Overall, community perceptions on illegal refining in Nigeria are diverse and complex, with varying opinions on the legality, necessity, and impact of this activity. In understanding the community perspective or attitude towards illegal oil refining, would give us an understanding on why this business persist in the region, how to effectively manage this illegal trade and improve environmental pollution management.