CHAPTER ONE

1.0     INTRODUCTION

Nigeria as a nation is blessed with Crude Oil. Some years after independence, crude oil was first discovered at Oloibiri in Ogbia local government of Bayelsa. Subsequently, it was discovered in other regions in the south-southern part of Nigeria also known as Niger Delta region.

Nigeria has solely depended on oil for revenue for its economic survival. Oil theft in the Niger Delta region has been a challenge to the nation. Different localities form groups to engage in oil theft and bunkering (Odalonu, 2015). The continuity of oil theft and bunkering in Nigeria has been as a result of corruption by Nigerian elites, high rate of youth unemployment, inefficient and corrupt law enforcement agencies and international crime collaborations (Odalonu, 2015).

Though successive Nigerian governments have really tried to deter the menace by the establish of special security outfit, militarization of the Niger Delta region and granting of amnesty to Niger Delta militants but the increase of the oil theft in recent times obviously indicate that there is still a problem. The Federal government of Nigeria will have to promptly procure a permanent solution to curb the issue of oil theft and bunkering in Nigeria (Odalonu, 2015).

Nonetheless, recently, the Nigerian National Petroleum Corporation (NNPC), the Navy, the Joint Military Taskforce (JTF) and the International Oil Companies (IOCs) seem not to be bothered again about the menace of crude oil theft from facilities in the nation’s Niger Delta, shallow and deep offshore arenas. (Izeze, Sahara Reports, 2017). Recently, about 200,000-1.200, 000 barrels of crude oil were being stolen from Nigeria on daily basis; in which the main problem did not come from pipeline tampering for illegal refining. To be frank, Nigeria still lose over 1 million barrels of oil to corporate oil thieves (Izeze, Sahara Reports, 2017). The oil theft and bunkering has to be checked by the federal government both at locality level and at national level.

The upsurge of oil theft in the Niger Delta region of Nigeria in recent times is alarming. Presently, Nigeria is losing over 300,000 barrels of crude oil per day to oil theft, pipeline vandalism and related criminal vices in the country’s oil sector (Akpan 2013; Olusola, 2013; Odemwingie and Nda-Isaiah, 2013; Okere, 2013). Despite the efforts of the Federal government to curtail the illegal diversion of oil in the Niger Delta by increasing its security spending in recent years and devoting millions of naira annually to hire private security firms as well as equipping men and officers of the Nigeria Security and Civil Defence Corps (NSCDC), incessant destruction of pipelines and other oil facilities across the country as well as trade in stolen oil by criminal cartels with international connections have continued unabated (Ugwuanyi, 2013; Mernyi, 2014) . This shows that, the huge investments of public funds on the safety of oil facilities have not yielded the required results.

Consequently, the Nigerian economy is in a precarious situation. She is facing an economic emergency unprecedented among the oil producers of the world and something urgent needs to be done to reverse the ugly trend. For instance, Nigeria has been tagged the most country plagued by oil theft among her contemporaries of Indonesia, Russia, Iraq and Mexico. Statistics of oil theft among these major oil-producing countries shows that Nigeria is losing as much as 400,000 barrels of oil per day which equates to losses of US$1.7-billion a month (Ameh , 2013; Dalby, 2014). This is huge loss compared to a total theft of 5,000 to 10,000 barrels per day and just 2,000 to 3,000 barrels per day in Mexico and Indonesia respectively (Dalby, 2014). Thus, oil theft and illegal bunkering activities in the Niger Delta pose a challenge that threatens the very foundation of the oil industry, and by extension, the Nigerian economy (Garuba, 2012). Why has there be persistent increase of oil theft activities in the Niger Delta in recent times? Who are the perpetrators of oil theft? What are the implications of oil theft in the Niger Delta? What has the government done to put an end to the menace? These are myriad of questions that need to be explored.

1.2     STATEMENT OF THE PROBLEM

Oil theft and bunkering has really amputated the Nigerian government towards national development. Uneven distribution of wealth in some communities and the aftermath of crude oil processing have left these communities jobless in some way. Since they cannot cultivate crops for daily consumption and commercial purposes, they are left with no other option than to engage in oil theft and bunkering as well. The security agents themselves such as the Joint Task Force also engage in bunkering instead of helping to curb the act. The study of the challenges of oil theft and bunkering would shed a light to its prospects as a determinant of national development.

1.3     RESEARCH QUESTION

The following research questions were formulated to guide the study achieve a valid and reliable conclusion

1. What are the causes of oil theft and bunkering in Nigeria?
2. What effect does oil theft and bunkering has on Nigeria economy
3. Is there any significant effect of oil theft and bunkering on economic growth and development in Nigeria
4. What solution can be proffered to the problem of oil theft in Nigeria

1.4    AIMS AND OBJECTIVE OF STUDY

The aim of this studies is to critically study the challenges and prospects of oil theft and bunkering on national development in Nigeria. The objectives are

1. To find out the causes of oil theft and bunkering in Nigeria?
2. To discover the effect of oil theft and bunkering has on Nigeria economy
3. To find out if there is any significant effect of oil theft and bunkering on economic growth and development in Nigeria
4. To proffer solution to the problem of oil theft in Nigeria

1.5     RESEARCH HYPOTHESIS

Ho:  there is no significant effect of oil theft and bunkering on economic growth and development in Nigeria

Hi: there is significant effect of oil theft and bunkering on economic growth and development in Nigeria

1.6     SCOPE OF THE STUDY

The idea of the research work is to study the challenges and envisage the prospect of Oil Theft and Bunkering on National Development in Nigeria. The research will cover the areas in which crude oil exists mainly some communities in the south-south of Nigeria. The research will also endaevour to gather information from both the parties involved including the indigenes, the security forces and the Nigerian government as well.

1.6     SIGNIFICANCE OF THE STUDY

This research will look critically into the challenges and prospects of Oil Theft and Bunkering on National Development in Nigeria. This research will serve as an eye opener to the level of revenue the nation is losing to oil theft and bunkering. It will also enlighten the federal government on how to deter the activities of those engaging in oil theft and bunkering whether it is the indigenes or security personnel’s. The oil theft and bunkering has to be checked by the federal government both at locality level and at national level.  Also this research work will enlighten the public on the risk and negative effect oil theft and bunkering has on Nigeria economy, and finally this research work will serve as guide and reference to other research work in the same field

1.7   LIMITATION OF THE STUDY

Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.

However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.8     DEFINITION OF TERMS

Oil Bunkering: this is the supply of fuel (or bunkers) for use by ships, and includes the shipboard logistics of loading fuel and distributing it among available bunker tanks.

Illegal Oil Bunkering: this is when oil bunkering is carried out illegally without requisite statutory licenses or valid documents, or in violation of the Nigerian maritime sector and the guidelines made by the statutory institutions regarding it.

Oil Theft: this is the illegal taking away of oil by whatever means and diverting it for personal gain.

National development: this is the ability of a country to improve the social welfare of the people e.g. by providing social amenities such as education, potable water, medical care, transportation infrastructure, etc.