Friday, September 20, 2013

Stolen Nigerian oil 'sold in Thailand'

By Watchrapong Thuogrung
The Nation

Energy officials deny allegation in UK think tank report

Thailand is one of the countries where stolen Nigerian oil worth billions of US dollars is sold every year, with much of the proceeds being laundered in world financial centres such as Britain and the United States. A study by London-based Chatham House found that Thailand and other Asian countries including China, India, Singapore and Indonesia were among the major international markets for stolen Nigerian oil, according to a report by the think-tank.

"Sources interviewed during the research for this report tentatively pointed to the United States, several West African countries, Brazil, China, Singapore, Thailand, Indonesia and the Balkans as possible destinations," said the report titled "Nigeria's Criminal Crude: International Options to Combat the Export of Stolen Oil". An investigator claimed to have discovered a stolen oil cargo in Thailand, according to the report, which was released on Thursday. "Nigerian crude oil is being stolen on an industrial scale," the report said.

Chatham House, which also reviewed thousands of documents, said the figure was almost certainly more than 100,000 barrels per day. Nigeria is Africa's largest oil producer, with output of about 2 million barrels per day. Thai energy authorities yesterday flatly denied reports that this country is one of the potential buyers of crude oil stolen from Nigeria. Energy Inspector-General Somnuek Bamrungsalee said yesterday that there was only a small chance of Thai refineries buying the stolen oil, as under Thai law, retailers normally buy oil from trade partners under long-term contracts.

"There's no way that other traders could offer the stolen oil to long-time trade partners, to supply to Thai retailers, including PTT," he said. He believed that the stolen Nigerian oil might have been destined to countries where supervision was less stringent than in Thailand. Regarding concerns that the stolen oil could be smuggled into Thailand, he said the Customs Department could check this, as it had the data of oil tankers entering Thai waters. Estimates on the scale of the problem vary, with some Nigerian officials saying 150,000 barrels per day is stolen, costing some US$6 billion (Bt185 billion) a year in lost revenue.

"The proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria," said the think-tank. Few fully grasp the problem and those affected have shown little desire to act, it added. "In Nigeria, politicians, military officers, militants, oil-industry personnel, oil traders and communities profit," Chatham House said.

Global oil giants such as Shell, ExxonMobil, Total, Chevron and ENI all operate in the Niger Delta, but it is "unclear how much export oil" these companies lose, it said. "We have not reached the breaking point," one oil executive was quoted as saying. Authors Christina Katsouris and Aaron Sayne said in the report: "This illicit oil is likely to have found ready buyers in West Africa, the US, Europe and several Asian countries.

"Stolen Nigerian crude and the profits from it are laundered around the world, threatening the integrity of financial markets and legitimate oil businesses." Among the majors, Shell has been the most vocal and is likely the hardest-hit given its larger presence onshore.

But companies have in recent months sold onshore assets, seemingly to focus on deep-water projects, where the risks of theft and unrest are limited. The initial stages of Nigerian crude-oil theft are largely known, with gangs tapping into pipelines, then pumping crude to smaller vessels, which take it to larger ships for international sale. Chatham House said it was less clear where the illicit crude was taken abroad and how it got there. It partly reaches world markets through "co-loading", where stolen oil is put on a ship carrying legal oil.

Documents are forged and the vessel departs seemingly laden with legitimate cargo. "Oil theft is a species of organised crime that is almost totally off the international community's radar," Chatham House said.
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