It is estimated that about 10% of Nigeria’s daily oil production is lost to illegal activities. That’s 200,000 barrels, worth about US$21 million per day at US$107 per barrel. The Nigerian Natural Resources Charter estimated in 2019 that crude oil theft represented an economic loss of at least N995.2 billion or US$2.8 billion annually.
Communities in the Niger Delta have long agitated against the degradation of their environment caused by multinational oil companies. After years of insurgency, the government introduced amnesty programs for militants who chose to surrender. But those who were not rehabilitated, and other unemployed youths, resorted to illegal refinery activities to make a living.
The illegal refinery process involves heating crude oil in metal containers to make petroleum products. It ignores all environmental, health and safety procedures and can have catastrophic consequences.
On 24 April 2022, for example, an explosion at one of these refineries killed about 100 people. On 24 October 2021, another explosion killed 25.
Illegal oil refineries also discharge residues from the crude oil into rivers, polluting wildlife habitats and disrupting the water cycle.
How illegal crude oil refineries operate in Nigeria
Petroleum refineries transform crude oil into petroleum products that can be used for economic activities such as transport, heating and power generation. They are complex and expensive to operate legally because they use a lot of energy and must comply with regulations. Legal refineries are located in industrial locations that have been carefully designed to ensure the safety of workers and the environment.
Illegal petroleum refineries are mainly located in the forest or in villages. Illegal operators break crude oil pipelines and load the stolen oil into tankers or channel it to tanks where it is boiled.
A burner under the cauldron heats the crude oil and causes it to evaporate into vapor. The vapor is then cooled to condense it into petroleum products like kerosene and diesel. Finally, the liquid products are funnelled into containers for transport and sale.
Diesel, the major product of these illegal refineries, is sold to traders and filling station owners or to middlemen with big ocean-going vessels.
The distillation process in illegal refineries is very dangerous because hydrocarbon is highly inflammable.
Three things that can go wrong
Uncontrolled heat supply at distillation units
In an illegal refinery, the boiler or distillation unit is constantly supplied with heat from the burner without temperature and pressure control. The steady heat supply can overload the unit with heat. That may cause thermal stress: the deformation of material by a change in temperature. The thermally stressed boiler under high pressure could explode, releasing its highly inflammable contents into the surrounding environment. A fire could spread very quickly.
Poorly designed condensation units
The illegal refineries are designed and made by artisans with little or no consideration of basic engineering design principles. A condensation unit should be designed to operate at a predefined temperature. The condensation unit of an illegal refinery is normally a water bath with immersed tubes which are encased with cement blocks.
The water cooling bath might not cool down the vapor quickly enough to form the liquid products as desired. This would cause temperature and pressure buildup. A pressure buildup beyond what the cooling tube materials can handle can result in the tubes exploding. The explosion releases highly inflammable petroleum vapor products into the environment and can cause a fire.