Massive Oil Theft By Pirates Costs Nigeria $1.5 Billion Every Month

Tyler Durden's picture

Submitted by Irina Slav via OilPrice.com,

Depressed oil prices, rampant corruption, and pipeline vandalism are only parts of Nigeria’s oil problem. It’s now losing a massive 400,000 barrels of crude daily to pirates in the Gulf of Guinea, an amount equal to the entire daily export capacity of its Forcados terminal.

Overall damage from piracy, theft and fraud for Africa’s largest oil exporter is estimated at some $1.5 billion a month, according to U.S. deputy ambassador to the UN, Michele Sison, citing a Chatham House report.

Attempts by local governments and the UN to put a stop to piracy have met with some success, but the practice continues - shifting location and adapting to new security measures, so now the UN Security Council is calling for a comprehensive framework of measures aimed at eradicating it.

Since 2014, says the UN, Gulf of Guinea piracy has increased at an alarming rate.

Two pirate attacks on 11 April affected seven countries. The cargoes came from Nigeria, Turkey and Greece; the ships were flying Maltese and Liberian flags; and the 8 missing crewmen were from the Egypt, the Philippines and Turkey.

In the first quarter of this year alone, there were six recorded pirate attacks in the Gulf of Guinea, and six attempted attacks. Nine of those were off the coast of Nigeria, while one was off the coast of Côte d’Ivoire, and two were within the territorial waters of the Democratic Republic of the Congo.

Last year, there were 100 similar incidents in the Gulf of Guinea, according to the UK’s ambassador to the UN, Peter Wilson.

Dealing with the pirates requires an international effort, and particularly a coordinated effort by those countries near the Gulf of Guinea. There isn’t much Nigeria can do on its own. Without a major overhaul of intelligence sharing and local law enforcement collaboration and training, the piracy scourge will continue to worsen.

Nigeria has thrown its lot in the fight against pirates, but it has too much on its plate already. Plagued by low oil prices, pipeline vandalism and stalling reforms at its state oil company, the country has more than enough to worry about in addition to losses to pirates.

In March, Nigeria pumped 1.677 million barrels of crude, which was a decline on the previous month’s 1.744 million. According to a Financial Times analysis, the decline is set to continue over the coming years, largely because the reforms at the NNPC, pledged by new president Muhammadu Buhari to tackle long-time corruption and inefficiency, have so far not yielded any actual results.

In addition to dealing with corruption, as part of the reforms, Buhari’s government planned to change the terms of the production-sharing agreements it has with foreign oil companies operating in the country. Oil majors with a Nigerian presence said at the time that such a move could deter investments and ultimately have a negative effect on oil revenues.

All in all, Nigeria has sunk deeper and deeper, and even a continued oil price rally would not be sufficient to prop it up as production continues to decline.

For June, Nigeria plans to export 1.57 million barrels of crude, for instance, compared with 1.6 million barrels scheduled to leave its shores in May. What’s more, its budget for 2016 had envisaged a daily output of 2.2 million barrels—an amount unlikely to be reached in the short-term.

Disputes between the NNPC and foreign oilfield operators are hampering normal output at more than one field. That’s in addition to the growing nervousness among international oil companies regarding Nigeria’s ability to ensure the stability of production and revenue sharing.

Vandals are responsible for an estimated 250,000 barrels in daily losses. Pirates are stealing at a rate of 400,000 barrels per day. That’s a 650,000-barrel shortage on the budgeted daily output. So–barring all conscious effort on the part of the Nigerian government—prices will have to rise more substantially than they have so far this year for Nigeria to feel any positive effect.

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Defecation's picture

It seems like there is a basal level of violence you must sustain to achieve loftier ideals. The more you curb the myopic selfishness, the more organized we can make our networks. Have we hit an inflection point for our monkey networks already? I hope not.

SilverRhino's picture

LEtters of Marque and Reprisal Nigeria .... get on it.   

Or you can hire out the US Navy ... I'm sure Uncle Sam would love to hire out a few destroyers for half a billion a month. 

 

___________'s picture

this video is restricted in my region WHY??????

SmittyinLA's picture

It's all stolen anyway screw Nigeria

We gave those idiots a destroyer, how insane is that?

Zero Point's picture

To be fair, the Prince of Nigeria promised to move a billion dollars through our bank account and pay a 10% commission to sweeten the deal.

OldPhart's picture

Great.

And all I got from the Prince was an email.

RafterManFMJ's picture

You really should have followed up on that! As soon as I send him my checking account info, he's going to fill my account with oil money that he needs help getting out of the country, and I get to keep half of it!! Already quit my job! See you saps on the other side!!

Boscovius's picture

Mad Max needs a boat.

___________'s picture

"Gulf of Guinea piracy has increased at an alarming rate."

because they are fucking niggers. the most criminal and brutal niggers survive and have children and the nice and kind black people are already all gone from this planet.

+they have 6+ children per family. non of this children has a purpose in life. they are born into a shit hole without a system or economy.
at the same time they have genetics of disabled low iq humans, so its simply impossible for them and their elite to establish a state with an economy

https://www.youtube.com/watch?v=a-_dsNTZch0

 

and not to forget that jews bought up a huge amount of natural recources in africa

https://www.youtube.com/watch?v=BGz-a9lwiPE

LA_Goldbug's picture

The man with the aircraft shows more determination than we will probable find in the average smartphone generation kid in the West.

I give him a +10 for effort :-)

The Congo Diamond leacher story is a good one. This is what a parasite on society looks like. He will generate nothing positive anywhere he is present. Just more poverty. His diamonds will be used to leach money from the top tier to make sure that money stays there. There will be no trickle-down effect.

Did you catch the "he studies the Bible" part in the Bloomberg report ?

An aside on Congo:

"U.S. Secretary of State John Kerry stressed the need for timely and credible elections in the Democratic Republic of Congo during a recent meeting with President Joseph Kabila, the State Department said on Monday amid concerns by opposition groups that Kabila may be seeking to delay elections."

Kerry cares about Democracy so muuuuuccchhhhh.

Restorative_Ally's picture

Speaking of africans and airplanes, check out the Gorilla-copter. 

https://www.youtube.com/watch?v=ybgQJlYRrZs

pods's picture

I can take a guess at the guy's favorite color.

pods's picture

SOB I click on that first link and YouTube runs a commercial about how my state is ripping the genitals off of guys who wear their hair too long. 

How many fuckin trannies are there? (I know it is deliciously ironic to use an Ann Coulter line in a trannie comment)

But what the hell?    Now people are paying to put commercials against this on YouTube?   

Something smells. 

pods

LA_Goldbug's picture

So where is the US Navy which being the official Global Policeman promised to take care of pirates ?

Able Ape's picture

The US Navy is too busy making enlistment videos; it can't be bothered by something like blatant piracy...

iClaudius's picture

The US Navy is too busy buzzing Russian aircraft.

ZombieHuntclub's picture

I am assured by Prince Comonawannalaya that all is well and that I will be receiving my $5m US just as soon as my Western Union check clears. This article is phony! I know bullshit when I see it. 

Last of the Middle Class's picture

If you're losing 1.5Bil a month, maybe they're not the pirates, maybe you are! Time for another greedy, bloodthirsty, theiving NIGER to take over.

apocalypticbrother's picture

Wow. Look at all the $20 bbl oil available from Nigeria. This will make up for the slow down in $20 bbl ISIS/ZIO oil out of Syria...You guys at Shell are really smart.

dchang0's picture

Winner winner, chicken dinner! This is the true answer--the powers that be are the thieves, as all gov'ts end up throughout history.

Theonewhoknows's picture

I guess even having a small conflict at your coast makes (at least) the local price go up. Reforms can be stalled and budget expenditure for military boosted. Perfect plan of governing or rather a perfect excuse for not doing so http://independenttrader.org/will-oil-price-stop-falling.html

apocalypticbrother's picture

What a piece of shit story. Don't the multi nationals produce the oil in Nigeria? How can the Niger government be taking the hit on this? If someone is losing 1.5 b a month wouldn't they raise an army immediatly and protect their resource? What a bunch of BS this story is.

Stu Elsample's picture

That problem would cease with a few well placed (and well paid) snipers. Russia has shown the world how to handle the thieving baboons. They must do what Russia does or the problem will not go away.

Knob Creek's picture

Mr pirate...... meet Mr. Barrett

Kina's picture

These ships need to be equipped with little killer drones, to blow up those speed boats before they get too close.

Aussiekiwi's picture

Guns,guns and more guns, least two heavy calibre machine guns mounted fore and aft and a couple of heavy calibre sniper rifles on every tanker.

just the tip's picture

a simple solution would be to take several US policemen, you know, the police that are referred to repeatedly as "fuck the cops" here at ZH.  the ones that commenters claim kill 100,000 people per day.

yeah those.  take several of them, a hundred maybe.  put them on those ships and say happy hunting.  pirate incidents solved.

dchang0's picture

That's a pretty good idea. They'd get paid a lot more as PMCs and suffer far less grief, because the American left ignores all the killing that goes on outside America.

For instance, you have Cirque du Soleil boycotting North Carolina for its anti-transgender bathroom law, but they are all too happy to do shows in Dubai, where gays are executed. EXECUTED. But if it's not happening in America, it's not a problem.

So you could pick the truly racist, truly sociopathic, truly murderous cops from all across America (a small percentage of all cops, probably less than 10% and certainly less than 20%) and pay them $200,000/yr. with free room and board as PMCs to guard these oil ships, where they get to shoot black pirates for a living, and they would get absolutely no grief from the left. Win-win-win for everybody!

Aubiekong's picture

All of them sub humans...

truthordare's picture

Bullshit,

1.5B a month?

seriously, who writes this shit?

maybe the recently sacked coke dealing pisshead has hacked into the server.

A nigerian village chief once told me that his ancestors sold all the criminals to the slave ships.

ipso facto there are no more criminals in Nigeria, theyre all in the USA, specially that cunt from Kenya.

East Indian's picture

These 'pirates' have the blessings of Nigeria's rulers. 100%.

Tigermoth's picture

Here in SA the term "nigerian", when used amongst the locals, is a generic reference to someone of another African country with a criminal bent. I guess there was a justification for it.

... and it looks like I'm not allowed to view the video here either. LOL