Nigeria losing $14 billion a year in oil

Nigeria loses $14 billion a year to oil theft, according to Stephen Hayes, the president of the Corporate Council on Africa.

Nigeria losing $14 billion a year in oil
Nigeria loses $14 billion a year to oil theft, according to Stephen Hayes, the president of the Corporate Council on Africa.

The supposed monetary losses incurred by the oil-rich West African country were calculated based on the estimated number of barrels of lost production due to corruption and crime, said Hayes.

"If you are losing 600,000 barrels a day on oil at $70 a barrel, you are losing $12 million a day on oil theft," Hayes told Nigerian newspaper This Day.

In and around the delta's de facto capital, Port Harcourt, a recent spike in violence has raised concerns about the long-term viability of doing business in the region, where foreign oil and gas operations and regularly targeted.

"The situation in Port Harcourt will remain unstable in the short term until Nigerian authorities can regain some level of control," read a recent report by the Stratfor consulting group.

"Many companies with oil operations in the Niger Delta are based out of or supported by companies in Port Harcourt. These companies and their personnel have not been specifically targeted by the groups involved in the fighting.

"However, in any unstable situation, there is always the chance that they or their personnel will get caught up in the violence."

Despite production disruptions attributed to "bunkering," when oil and gas lines are tapped at times resulting in deadly explosions, illegal sales and violence attributed to armed gangs and militants, some Nigerians say they see a silver lining to the delta's and the nation's dilemmas.

Earlier this month a leading Nigerian rights group praised President Umaru Yar'Adua for his efforts to tackle corruption and violence.

The Movement for the Survival of the Ogoni People, or MOSOP, representing one of Nigeria's most dominant tribes, said Yar'Adua recognizes the need to address economic injustices in the delta as a means of curtailing the violence there.

But the president's efforts will not bear fruit unless officials in Abuja match his dedication to incite real change in the delta, said the group.

"It is thus our view that for President Yar'Adua's crusade for transparency, accountability and good governance to be effective in the Niger Delta, the Federal Government must match its words with action by increasing its interest in the operations of the state and local government administrations in the region," MOSOP said in a statement that appeared Wednesday in the pages of Nigeria's Daily Champion newspaper.

The Niger Delta, home to the country's multibillion-dollar oil industry, has been a flashpoint for decades amid accusations of government graft and corrupt practices by foreign oil companies.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. High unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered the region's youth, who have taken up arms, many times supplied by political leaders, and formed militant groups and local gangs.

Following his election in April, Yar'Adua appealed for calm and in his inaugural address said he would "set a worthy personal example" by tackling corruption and violence in the delta.

Since then some of the militants have said they would cease violence against foreign oil operations that have been the focus of escalated attacks and kidnapping campaigns over the last two years.

Meanwhile, the Nigerian president has focused much of his young administration's attention on tackling problems in the delta. Most recently, Yar'Adua publicly discussed creating a national energy council to better distribute petroleum revenue and has made pledges to crack down on corrupt officials.

"Yar'Adua is throwing around a lot of political capital these days trying to bring the situation in the delta under control," Stratfor sub-Saharan Africa analyst Mark Schroeder told UPI Wednesday.

Whether his efforts are enough to bring a notoriously corrupt and violent region under control only time will tell.

UPI
Last Mod: 31 Ağustos 2007, 16:18
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