The deadly problem of illegal oil refining in Nigeria

For many Nigerians, the deadly practice of illegal oil refining rings familiar. The siphoning, the “cooking,” and the accidental fires have been ongoing since 1958, when fossil fuel corporations began extracting crude oil and gas from the Niger Delta. But after an explosion on April 22 rocked the Abaeze forest and killed 100 people in the southeastern part of the country, it drew attention.

As news of the explosion in Imo state disseminated across various media platforms, the nation was thrown into what Nigeria’s president called “shock and trauma.” He said the incident was catastrophic and described it as a “national disaster.”

Illegal oil refining—popularly known as oil bunkering or oil theft—involves the siphoning off of crude fuel from pipelines often belonging to foreign companies, then transporting it to makeshift refineries hidden in bushes and forests several miles away by. The stolen goods are boiled in large metal containers by local refiners and distilled into products such as kerosene, diesel, and petrol. Once cleaned, it is sold around the country or exported abroad. Sometimes, however, the flames used to cook the crude oil get out of control, causing explosions.

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Philip Jakpor, a Nigerian environmental activist, says illegal oil refining is common and remains a major issue for Nigeria, despite the outcry every time there are result. “Many people are benefitting from the illegal business of oil bunkering including government and security officials, and communities in the Niger Delta region, and that’s why it has persisted,” the director of programs at Corporate Accountability and Public Participation Africa explains.

Explosions are not uncommon at illegal refining sites in communities in the Niger Delta, the country’s petroleum-rich region. But the consequences don’t end there. The practice has dealt a big blow on the national economy—crude oil accounts for approximately 90 percent of Nigeria’s revenue source—costing the country and its people billions of dollars in losses. “Apart from the lives lost in explosions, the Nigerian economy is also deprived of revenue,” Jakpor says.

Between January 2021 and February 2022, Nigeria lost more than 115,000 barrels to oil bunkering, totaling $3.27 billion worth of crude oil, according to the Nigerian Upstream Petroleum Regulatory Commission. A review of the Nigeria Extractive Industries Transparency Initiative, Oil and Gas industry report also showed that more than $270 million was lost to theft between 2016 and 2020. According to another report by the local media outlet Dataphytein 2020, the country lost more that 39 million barrels and at least $1.6 billion to crude oil theft and sabotage.

Despite its obvious implications on the economy, people’s lives, and the environment, illegal oil refining remains difficult for the Nigerian government to prevent. A number of factors feed into the dangerous practice, including unemployment, limited access to socio-economic opportunities, and tensions between oil companies and residents of the region over environmental disasters caused by the extraction of oil and gas. “These are poor people whose communities have oil, but do not enjoy any benefits and lack development so they engage in it,” Jakpor says. “They’re also the victims of the impact.”

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