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A Mesh of Corruption – Inside Nigeria’s Illegal Oil Bunkering Business (Part 1) - TELL Magazine

A Mesh of Corruption – Inside Nigeria’s Illegal Oil Bunkering Business (Part 1)

A Mesh of Corruption – Inside Nigeria’s Illegal Oil Bunkering Business (Part 1)
A Mesh of Corruption – Inside Nigeria’s Illegal Oil Bunkering Business (Part 1)

How Oil Theft Began in Nigeria

From just a whisper at the beginning in 1975, oil theft has ballooned to a mega organised crime in Nigeria, involving various stakeholders and grossing about 1.5 million barrels daily with no hope of an end in sight.

“They call me ‘Engineer’. I have never gone to school, but I have the capacity to even go under the water and attach a pipe to an oil pipeline….”

When the unexpected visitors arrived, Ibelema Ekiyor (not real name) was mending his fishing nets at the back of his village home on the banks of River Nun. Some wore different military uniforms. Some wore Ijaw traditional clothes, and others dressed in casual expensive wears. He had never seen any of them before. They were strangers.

Their leader knew the terrain well. He spoke the Izon language and whispered to him they had come to see him. He did not have enough seats to go round, but they did not mind. Their mission was more urgent.

Anabs Sara Egbe

The leader of the uniformed men took control after the preliminaries. “We hear that you have stopped this thing that all of us used to chop from. If you don’t come back and continue this job, we will arrest you and put you on national television and tell Nigerians that we have arrested the king of oil theft.”

He did not pretend not to understand what the officer was talking about. He is a retired staff of Shell Petroleum Development Company, SPDC. He was trained in underwater welding and was the best in the department. But at a time, Shell retired him young as emerging technology took over specialised jobs. He had obligations to his family and had to hustle for livelihood. Those in Shell who knew his unrivalled skills in underwater welding gave him referrals to independent businessmen in the Niger Delta.

They made him offers from time to time to do what he was doing for Shell for them and they took care of him. The money was good. He found himself helping oil thieves to graft illegal pipes unto the Shell pipelines. He did not ask too many questions. He just did his work and minded his business. No one appeared to be hurt.

However, Shell was hurting. And Nigeria too. They were losing a large volume of crude oil to unknown oil thieves. The expertise deployed by the bunkerers in the successful breaching of pipelines suggested that insiders were involved. After a staff audit, it occurred to them there were idle artisans who could be available to dubious businessmen. The company knows how to handle conflict with the natives in the creeks.

Like the present visitors, the company’s representatives visited him one day. They apologised for neglecting him. “Please, don’t do it again. We will pay you one million Naira monthly so that you can rest,” they offered.

That was fair enough. He agreed and stayed off the pipelines. He concentrated on fishing to keep fit and earn extra income. But just one month after stopping the illegal hustle, these security men and their business counterparts have brought another complication; a threat and blackmail.

There are many of them who worked in oil companies in the Niger Delta. They had been trained to do this job. But they are not maintained when retired. They do not take away the skills from them so they can deploy the knowledge to help themselves. That capacity exists that Ibelema does it.

He shared his story with a federal government committee led by then Nigeria Extractive Industries Transparency Initiative, NEITI, Chairman, Ledum Mitee. According to Mitee, a lawyer and veteran of the Niger Delta struggle, Ibelema posed the question to the Committee, “What should I do in the circumstance?”

That was Catch 22. Fredrick Forsyth calls it the devil’s alternative, “whichever one you choose men must die.”

“We looked at ourselves. We couldn’t answer the question. What do we tell a young man who was blackmailed into doing what he didn’t want to do because the security agencies are co-beneficiaries in what he was doing? So that explains to you the level of the rot in the system and why oil theft may never stop in Nigeria,” Says Mitee.

How Oil Theft Started in Nigeria

Our investigation revealed that oil theft, presently glamourised as illegal oil bunkering, started under the military regime. The first barrel of oil was drilled in Oloibiri, Bayelsa State, in 1956. Ten years later, Nigeria went into a civil war, which lasted till 1970. Yakubu Gowon, a general, was the military head of state of Nigeria till 1975, when he was overthrown in a military coup d’etat

Oil theft first appeared in Nigerian law in 1975.The Petroleum Production and Distribution (Anti-Sabotage) Act 1975 mentions pipeline sabotage and provides penalties, including death penalty for offenders. But at this time, the focus was on pipelines conveying petroleum products, not crude oil. The possibility of crude oil theft emerged in 1984, and the deterrent appeared in The Crude Oil (Transportation and Shipment) Regulation 1984. This law targeted ships, tankers and vessels engaging in unauthorised loading of crude oil within Nigeria or outside any loading ports or terminals in Nigeria.

Lidum Mitee

From this shadowy possibility in 1984, oil theft became a logical reality during Ibrahim Babangida’s regime in 1987/88. A professor of Virology and then minister of petroleum and energy, Tam David West, estimated that Nigeria was losing N10 million annually to crude theft.

A prince of Kula Kingdom, a riverine oil-producing community in Rivers State, Anabs Sara Igbe, has been monitoring oil theft for years. He said oil theft gathered substantial critical mass during the military regime of Sani Abacha. Indeed, he sees Abacha’s regime as the beginning of oil bunkering in the Niger Delta, as it is known today.

How did oil bunkering start? He traces it to when Abacha called out Nigerian youths for the two-million-man march organised by Daniel Kanu to drum up support for his self-succession plan, under the vehicle of Youths Earnestly Ask for Abacha, YEAA. “During the march, they saw money; they saw Abuja; they came home to the Niger Delta and demonstrated. The Nigerian government told them the development of the Niger Delta was in the pipeline! They couldn’t understand what it meant that their development was in the pipeline. So, they broke the pipeline and saw crude oil. Black gold! That was how they started, in a small way, until the cartel came and hijacked it from them. That is where we are,” recalled Sara Igbe

By 2013, the Goodluck Jonathan administration put the volume of crude losses at about 150,000 barrels per day. On August 29, 2019, the Ad-Hoc Committee of the National Economic Council (NEC) on Crude Theft revealed that that Nigeria lost about 22 million barrels in the first six months of 2019. The cost was put at $1.35 billion. That was the equivalent of five percent of the year’s budget. According to NEITI, between 2009 and 2019, Nigeria lost 138.4 thousand barrels of crude oil every day, representing seven per cent of average production of two million b/d.

According to NEITI, between 2009 and 2018, Nigeria lost over 505 million barrels of crude oil valued at $40.06 billion, and 4.2 billion litres of refined petroleum products worth $1.84 billion respectively, making a total of $41.9 billion. This means that on the average, Nigeria lost 11.47 million daily, 349 million monthly, and 4.2 billion United States Dollars, (USD) every year for the10 years.

In his 2020 budget speech at the National Assembly, President Muhammadu Buhari revealed that oil revenues fell below target by 49 per cent as at June 2019. He attributed this to “lower than projected oil production, deductions for cost under-recovery on supply of premium motor spirit, (PMS) as well as higher expenditures on pipeline security/ maintenance.”

NEITI reveals that “Pipelines repair, a direct consequence of vandalism, is a major index of losses in the oil industry. For three years covering 2014-2016, total expenditure on pipeline repairs was N363 billion.”

Put together, NEITI says that between 2009 and 2018, a total of 488,558,873 barrels (488.6 million barrels) of crude oil was lost to theft and sabotage. The Agency observes “One pattern that seems to occur with disturbing regularity is the sudden spike in volume of losses after two to three periods of comparable values. These extraordinarily high volumes occurred in 2009, 2013 and 2016.”

Crude oil losses declined to 32.5 per cent between 2014 and 2015 but spiked to the highest percentage increase of 272.6 percent between 2015 and 2016. This period was described by NEITI as “a period of heightened sabotage activity in the oil- producing region.” The Agency equally noted, “The fact that the lowest percentage change was above 30 percent shows the high volatility in crude oil losses.”

Explosion in oil theft

Our investigation strongly shows that the NEITI figures may be well below the actual volume of crude oil Nigeria is losing daily. Sara Igbe puts the loss to about one million barrels daily. He should know better. He lives in the creeks. He knows the spread of the pipelines and the futility of surveillance by compromised security operatives.

Dimensions of oil theft

A retired rear admiral and former commander of the Eastern Naval Command of the Nigerian Navy, Antonio Ibinabo Bob-Manuel, when MT African Pride, an all-foreign crew standard oil tanker, was arrested on October 8, 2003, described the dimensions of oil theft as “The Iniquitous Triad.”

This triad underlies the modus operandi of the oil thieves. According to him, they operate through a complex network of pipelines, deep in the creeks and rivers of the Niger Delta. It involves a triple relay division of labour, which benefits all stakeholders in the business. The first group is those who specialise in vandalisation of pipelines and the evacuation of their content into barges for subsequent transfer into coastal tankers. The barges characteristically have carrying capacities of between 50 – 500 metric tonnes and are said to be suitable for movement of cargo in the narrow-confined waters of the creeks.

“This is the home of the domain of the so-called cultists, political thugs, militants and other social misfits that have been terrorising both inland and off-white waters of the Niger Delta. Their campaign of terror is funded mainly from the proceeds of stolen crude oil,” revealed Bob-Manuel.

The second group receives the stolen crude cargo from the barges. Operators at this level use seagoing costal tankers or self-propelled barges to receive the stolen crude from the barges for subsequent transshipment into much larger vessels.

“The coastal tankers/self-propelled barges are usually stationed at anchorage positions in the inland waters of the Niger Delta from where they are rendezvoused by the barges. They typically have carrying capacities of 1500 – 5000 metric tonnes and, because they spend much time anchored in the inland waters, are more susceptible to arrest,” says Bob-Manuel.

Most of the arrests made by the Nigerian Navy belong to this category of vessels. Here, the operators are mainly Nigerians acting alone, or stealing in concert with foreign accomplices.

The third group waits in predetermined positions out in the open sea to receive the contents of coastal tankers. Operators here employ standard, and, in some reported cases, even super tankers, to transship the stolen crude contents from relatively smaller coastal tankers to refineries in different parts of the world. The carrying capacity of these outsized vessels range from 25mt for standard tankers, to over 100, 000 mt for super tankers.

The MT African Pride and Rear Admiral Antonio Ibinabo Bob-Manuel (Retired)

On October 8, 2003, MT African Pride, a standard oil tanker, was arrested by the Nigerian Navy Ship (NNS) NWAMBA under the command of a captain, Joe Aikhomo, in the Western Naval Command of Nigerian Navy, off the entrance to the Forcados River, in Delta State at about 5pm Nigerian time. It was the largest ship ever arrested. All the crew members were foreigners.

Bob-Manuel says his disclosure on MT African Pride is “an attempt to give a truthful and honest account of events as they occurred; to highlight the deceit in a seriously flawed and contrived administration process that has cost Nigeria so dearly, and to appeal, with the deepest sense of humility and concern, for the matter to be revisited.”

At the time of arrest, The MT African Pride had 11, 300 metric tonnes of stolen crude cargo on board, valued by petroleum industry experts at $70 million, or ₦10 billion then. Bob-Manuel says the super tankers have over four times the carrying capacity of The MT African Pride. The MT African Pride had made three previous trips before her arrest on October 8, 2003, from the recording on its logbook. It had 22 crew members made up of 18 Russians, two Romanians, and two Georgians.

The operators were mainly foreign nationals stealing in concert with highly placed Nigerians.

Not all the stolen crude is transshipped out of the country. A small fraction is retained in the creeks and processed locally through a crude process called Kpo-fire in Niger Delta parlance for domestic use. The onomatopoeia ‘Kpo’ represents the loud sound the crude oil makes when it reaches its boiling point.

Bob-Manuel was appointed the Flag Officer Commanding the Eastern Naval Command in April 2002.

According to him, the practice then was for such arrested barges to be scuttled (sunk at sea) after evacuation of the contents by Nigerian National Petroleum Company (NNPC) to serve as deterrent to others. “It soon became apparent after my resumption of office that the solution would require much more than the mere arrest and scuttling of barges. The practice never really had the desired impact on the activities of the criminal elements involved in the illegal enterprise. On the contrary, the number of barges hidden in the creeks simply kept on growing,” he lamented.

The Command found that the high revenue from the business made it possible for the owners of the destroyed barges to quickly replace them. They equally found that prominent Nigerians were involved in the business. These prominent Nigerians “almost always ensured that culprits arrested escaped prosecution in court. The matter was further exacerbated by the myth created in the minds of personnel that those involved belonged to the ruling political class and was therefore ‘untouchable,” regretted Bob-Manuel.

Things moved quickly, and the then Acting Chief of Naval Staff ordered the immediate release of The MT African Pride on the grounds that the ship had NHQ clearance to operate in the Lagos Area in a signal, NHQ 091120 OCT03.

Bob-Manuel called the Acting CNS on phone and explained why the Western Naval Command cannot release the ship until the then CNS, Vice Admiral S.O Afolayan, who was away on pass, resumed.

Bob- Manuel indicts the Naval Headquarters for the escape of The MT African Pride and the chain of events that followed. “I doubt very much if the NHQ really used the wealth of information my headquarters supplied in the way it was intended and recommended to be used. If the NHQ had, then the Nigerian public would have witnessed for the first time, the arrest and prosecution of some of Nigeria’s most notorious economic saboteurs. Indeed, it may well be said that the failure of NHQ to professionally utilise the information at its disposal heralded the chain of events that ultimately led to the escape of The MT African Pride.”

Bob-Manuel revealed that he was offered $100,000 bribe by a Nigerian agent of the arrested ship to release the ship. The agent, identified simply as Sola, started with an offer of $15, 000 and raised it to $100, 000.

He alleged that a former high-ranking official in government called him to solicit on behalf of Sola for the release of the ship. “In reply, I told him I was only a custodian of the arrested ship and that the authority to release now rested with Aso Rock, where… he was better known and recognised than my humble self.”

“About 45 minutes after he made the first call, he repeated the call to insist that the CNS had again given him assurances that it was well within my competence to release the arrested ship. At this point, I politely requested him to advice the former CNS to formally dispatch a signal or letter to command headquarters ordering or directing the release of The MT African Pride. Expectedly, the CNS never issued any such instruction.”

As the Flag Officer refused to play ball, internal forces in the hierarchy of Nigerian Navy conspired to achieve their aim by other means. Events happened quickly.

There was internal conspiracy involving officers and men of NNS BEECROFT to illegally transship the crude oil in the arrested The MT African Pride into another vessel, but this was foiled. Prior to this, the trusted Commanding Officer, Commodore Akaleme, was relieved of command and replaced by a captain, Edem Duke. According to Bob-Manuel, “This change in command was to deal a telling blow on future WNC operations in the fight against crude oil theft.”

With Cdre Akaleme out of the way, the crude cargo of The MT Africa Pride was successfully illegally transshipped about November 2, 2003. Bob-Manuel ordered the new commander of NNS Beecroft, the ship in whose custody the arrested ship was to investigate the crime. The report submitted was a fraud.

“The report attempted to divert attention from the matter under investigation to an unrelated incident. In the event, the report ended up indicting the wrong personnel, and even proceeded to have them court martialed,” revealed Bob-Manuel.

Consequently, he set up fresh a investigation using the Western Naval Command Intelligence cell. They found that:

  1. The MT African Pride, while under custody, left anchorage position and put to sea on October 31, 2003, at about 1800 hours without clearance from the headquarters of WNC.
  2. The MT African Pride transshipped an undisclosed quantity of crude oil into another vessel of similar size and displacement.
  3. The transshipment was done under the cover of darkness and consequently, the name and identity of the receiving vessel could not be ascertained.
  4. That NNS BEECROFT’s security detail, commanded by Lt. Cdre MC Abubakar (later dismissed) was onboard The MT African Pride on duty, and even assisted the ship’s crew in carrying out the transshipment.
  5. That Lt. Cdre Abubakar employed coercion and financial inducement to procure the support and active participation of the ratings in his charge.
  6. That monetary inducement of N250, 000 each was given to the ratings in this regard.
  7. That Lt. Cdre Abubakar refused to disclose how much he was paid for his participation/cooperation.
  8. That Lt. Cdre Abubakar refused to disclose the identities of other co-conspirators from within and without the Nigerian Navy with whom he perpetrated the crime.

Armed with this report, Bob-Manuel ordered the immediate arrest and subsequent trial of Lt. Cdre Abubakar. He was found guilty and sentenced to imprisonment/dismissal from the Naval Service.

On July 5, 2004, Bob-Manuel was relieved of his command and posted to the Armed Forces Command and Staff College, AFCSC, Kaduna, as deputy commandant at a very short notice. It was victory for crude oil thieves. Their only stumbling block was out of the way. He handed over The MT African Pride to his successor, Rear Admiral Kolawole, whom he described as “a brilliant but pliant officer with limited experience in higher command functions/responsibilities.” He observed, “My posting came at a time the fight against crude oil theft was its peak in the Western Naval Command.”

Just one month after his reposting, the unthinkable happened, and The MT African Pride disappeared from Nigeria in the second week of August, 2004. “My immediate reaction was shock and disbelief,” Bob-Manuel recalls. Nigerians were shocked too. The National Assembly summoned Rear Admiral Afolyan, the then CNS, and Tafa Balogun, then Inspector General of Police, to give an account of what led to the disappearance of The MT African Pride.

On September 23, 2004, Bob-Manuel appeared before the House Committee on Defence in furtherance of their investigation. He gave them a low down on the saga, including the $100, 000 bribe. The person who chartered The MT African Pride was established to be Niyi Fafowara.

A few days after his appearance before the House Committee on Defence, Bob-Manuel also appeared before the Navy Board of Inquiry, BOI, whose chairman was hostile to him. He described him thus: “He lacked the strength of character to do a decent job. His leadership of the board was characterised by the absence of honesty of purpose and courage usually associated with such investigative panels.”

The BOI failed to arrive at any meaningful deductions from the submissions made. “The board missed all the vital clues that might have assisted in the apprehension of the vessel’s charterer and other accomplices. It was a contrived board, and its findings and recommendations lacked conviction as they were in the main, skewed towards meeting the jaundiced expectations of the convener. Put simply, it was a sham.”

The first report could not find Bob-Manuel culpable and was consequently rejected by NHQ. The Board then forwarded a second report indicting him and recommending that he be tried by Special Court Martial. He was then charged and ordered to appear for trials in October 2004. His trial started on October 27, 2004 with seven charges made against him, out of which the prosecution could sustain only four.

On January 5, 2005, he was found not guilty by the Special Court Martial on all counts. Consequently, he was discharged and acquitted.

Summing up his fight against oil thieves, Rear Admiral Bob-Manuel says: “They must have felt quite uncomfortable with my methods in the Western Naval Command. With their combined influence and power, they posted me out of WNC and perfected plans to facilitate the escape of The MT African Pride from lawful custody.”

He says he experienced “disappointment and trauma in the course of my trial.”

During his time as the Flag Officer commanding the Western Naval Command, the Command arrested 12 ships, including The MT African Pride. “In all this, not even a single officer or rating who served under me in the WNC ever received an acknowledgment or commendation for services rendered to the good people of Nigeria. Instead, the Command’s noble efforts were received with disapproval and a futile attempt to tarnish the image of the family.”

Bob-Manuel is gnashing his teeth in retirement. His ordeal was only the beginning of the evolution of oil theft in Nigeria. Today, even under President Bola Tinubu, despite the massive noisy hunt for oil thieves, the illegal business continues to thrive.

It is now a game of the jackals as Part two of this story will show.

This story was funded by the International Centre for Investigative Reporting, ICIR.

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