Monday, 8 September 2014

What Do Oil Majors Know About Oil Theft?

editorial-7The chief of naval staff, Vice Admiral Usman Jibrin, may have spoken the mind of most Nigerians when he alleged that the international oil companies (IOCs), otherwise known as “oil majors”, are culpable in the massive theft of the country’s oil resources. The naval chief also said that this rape on the nation’s vital resource denies the country about N16 billion monthly, down from N47 billion reported in January.
Under normal circumstances and considering the repulsion these oil majors, which are mostly from West, feel about issues that have to do with corruption and inappropriate behaviour, especially in business relations, one would have expected them to react immediately if only to protect their corporate image and the integrity of their home countries. But they have kept mum.

Since the first oil well was drilled in Nigeria in 1956, the sector has been in the hands of these IOCs. Beyond lifting crude, these companies have done nothing to add value to the sector. Elsewhere, they own refineries and other downstream facilities. But, in Nigeria, the only visible sign of them is polluting the environment from which they make their billions and trillions of dollars. They waste the nation’s gas resources through flaring instead of re-injecting them to the soil for future use. They have consistently resisted demands that they install meters to their facilities to determine the actual crude produced. They don’t pay taxes on the figures they claim they lose to oil thieves.
In the face of all these, we are persuaded to ask: how were they able to know the quantity that was stolen if they were not part of the thieving crowd? They are virtually in total control of the upstream sector where the stealing is more pronounced. Can the thieves actually succeed if these oil companies do not connive with them? Crude oil business is not the same thing as sachet water business. It is not a business for the faint-hearted. The oil majors have the technology, the know-how and the know-why of the business. So, they should explain to Nigerians, their home countries and, more importantly, to their consciences their role in this whole shame as well as the connection of their local collaborators.
Now that a ranking security officer has let the cat out of the bag, what is next? Is it going to be like the unresolved stolen pension fund or unremitted oil revenue? N16 billion a month, even though a conservative estimate, is good money. Nigerians desire to hear that the thief or thieves have been fished out and punished, and then that the loophole has been plugged.
Source: Leadership

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