The deadly practice of illegal oil refining is familiar to many Nigerians. The siphoning, “boiling” and accidental fires have continued since 1958, when fossil fuel companies began extracting crude oil and gas from the Niger Delta. But it attracted attention after an April 22 explosion rocked Abaeze Forest, killing 100 people in the south-east of the country.
As news of the blast in Imo State spread across various media platforms, the nation was plunged into what the Nigerian 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 siphoning crude oil from pipelines, often owned by foreign companies, and transporting it to makeshift refineries hidden in bushes and forests several miles away. The stolen goods are cooked in large metal vats by local refineries and distilled into products such as kerosene, diesel and gasoline. After purification, it is sold all over the country or exported abroad. However, sometimes the flames used to cook the crude oil get out of control and cause explosions.
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Philip Jakpor, a Nigerian environmental activist, says illegal oil refining is rampant and remains a major problem for Nigeria despite the outcry each time there are victims. “Many people are benefiting from the illegal oil bunker business, including government and security officials, as well as communities in the Niger Delta region, and that’s why it has continued,” explains the program director of Corporate Accountability and Public Participation Africa.
Explosions are common at illegal refinery sites in communities in the Niger Delta, the country’s oil-rich region. But the consequences don’t end here. This practice has dealt a severe blow to the national economy – crude oil accounts for about 90 percent of Nigeria’s revenue stream – and has cost the country and its people billions of dollars in losses. “Apart from the deaths in blasts, the Nigerian economy is also deprived of revenue,” says Jakpor.
According to Nigeria’s Upstream Petroleum Regulatory Commission, Nigeria lost more than 115,000 barrels to oil bunkering between January 2021 and February 2022, totaling US$3.27 billion in crude oil value. A review of the Nigeria Extractive Industries Transparency Initiative Oil and Gas Industry Report also showed that between 2016 and 2020 more than US$270 million was lost to theft. According to another report by the local media outlet data phytIn 2020, the country lost more than 39 million barrels and at least $1.6 billion to crude oil theft and sabotage.
Despite its obvious impact on the economy, people’s lives and the environment, illegal oil refining remains elusive for the Nigerian government to prevent. A number of factors contribute to this dangerous practice, including unemployment, limited access to socioeconomic opportunities, and tensions between oil companies and area residents over environmental disasters caused by oil and gas exploration. “These are poor people whose communities have oil but don’t enjoy benefits and don’t have development, so they get involved,” says Jakpor. “They are also the victims of the impact.”
A 2020 study by researchers from Newcastle University, UK, and Niger Delta University, Nigeria shows how host communities are severely harmed by the activities of local illegal oil refineries, with the greatest impacts on farmland, estuaries and rivers. “They ignore environmental protection principles when refining the crude oil and dump the residue after boiling the crude oil into nearby rivers and bodies of water,” says Oyinkepreye Lucky Bebeteidoh, an associate professor in Niger Delta University’s Department of Marine Engineering and a co-author of the study.
Bebeteidoh, who lives in Yenagoa, Bayelsa, a major oil-producing state, worries decades of environmental damage caused by oil activities in the Niger Delta region may be difficult to reverse. But he encourages Nigerian leaders to incentivize the public to stop illegal oil refining and educate people about the environmental implications. “The government must also provide basic facilities such as schools, roads and hospitals in the communities,” says Bebeteidoh. He also adds that it should create guidelines and open up space in the Niger Delta for local refineries to engage in legal production. This would create more jobs and ensure proper regulation of the sector.
For his part, Jakpor says the Nigerian government needs to do serious work to identify the perpetrators of illegal oil refining and address the environmental impact on communities in the Niger Delta. “It’s a grim situation and something drastic needs to be done,” he notes.
A government spokesman said PopSci that they are determined to take action against illegal oil refineries in the country. However, they did not share any concrete action plans.
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Jakpor believes changing the decades-old system is a good start. “Nigeria must block the loopholes that allow oil recovery groups to operate unhindered. The political will of the government is crucial, because stealing and cooking oil is not a business for the poor – the common people are just the foot soldiers,” he says.
Although foreign governments are aware of oil bunkering, they do not intervene directly in the illegal business, even after major disasters such as in the state of Imo. In recent years, international regulators have shown some interest in helping Nigeria – but they need better intelligence and information on oil theft to intervene. Meanwhile, oil multinationals like Shell, which still hold billions of dollars in assets in the country, have found sanctuary. I didn’t contribute much to solutions. If the industry can work with communities in the Niger Delta and provide them with more socio-economic opportunities, perhaps it can begin to heal their long history of neglect in the region.