Economy suffers as illegal refineries defy govt efforts

Despite government crackdowns, illegal refineries in the country continue to resurface, much like a cat with nine lives. Emboldened by lucrative profits, operators of the illicit business are prepared for a showdown, even if it means risking their lives. In this report, DARE OLAWIN explores the resilient and deadly world of illegal refining sites, where economic sabotage and danger reign supreme

Day in, and day out, the media space is flooded with the same heartbreaking stories of illegal refineries, leaving editors exhausted from publishing the same tale from the same location almost daily. The oil-rich Niger Delta region is perpetually in the news for all the wrong reasons – oil theft and illegal refining. From Rivers to Delta, Akwa Ibom to Abia, Bayelsa, Imo, Cross River, Ondo, and other states in the region, the Federal Government has been struggling to keep up with the cat-and-mouse game of tracking down illegal refining sites.

Despite their best efforts, these illicit operations seem to defy all government tactics, leaving the authorities frustrated and helpless. The cycle of discovery, destruction, and resurgence continues unabated, with the illegal refiners always one step ahead of the law. The environmental damage, economic losses, and human toll of this illegal activity are staggering, yet the perpetrators remain undeterred.

Findings by our correspondent revealed that in the Niger Delta, illegal refineries are ‘legal’ in the eyes of a large percentage of people. To those in the act, oil theft and illicit refining are a right rather than a crime.

6,800 illegal refineries uncovered in two years

So far, the Nigerian National Petroleum Company Limited said it had deactivated about 6,800 illegal refineries in Nigeria in the past two years.

“From 2022 to date, we have deactivated 6,800 illegal refineries,” the NNPCL disclosed on May 18.

Local illegal refineries, also known as artisanal, cooking pots or bush refineries in Nigeria, are typically makeshift and clandestine operations. They are often hidden in remote areas, swamps, or forests, and can be difficult to detect. Illegal refineries are often constructed using locally sourced materials like wood, metal scraps, and plastic containers. They may resemble shantytowns or makeshift camps located in the creeks.

Depending on the capacity, many oil drums and containers are used to store and process crude oil and refined products. The refineries are equipped with basic, homemade equipment, such as metal tanks, pipes, and heating sources like open fires or generators. The surrounding area is often polluted with oil spills, contaminated water, and hazardous waste. The sites may have basic security measures, like guards, watchtowers, or makeshift fences, to protect the operation from authorities.

But operators of this illicit business believe they deserve to get their share of the black gold nature has endowed them with. As a result, they took to the creeks, taking their fates in their hands. They connect illegal pipelines to siphon crude oil from the government and private companies.

While lamenting the spate of oil theft in the Niger Delta region, the Group Chief Executive Officer of the Nigerian National Petroleum Company, Mele Kyari, contended that going by the volume of oil stolen daily and the brazenness with which the perpetrators operate, crude oil theft was the most humongous and virulent economic crime in Nigeria that must attract the attention of the Economic and Financial Crimes Commission.

“Today, we have disconnected up to 4,846 illegal pipes connected to our pipelines, that is out of 5,543 of such illegal connection points. That means there are a vast number of such connections that we have not removed.

“These things don’t just happen from the blues. They happen in communities and locations we all know. As we remove one illegal connection, another one comes up. It is sad,” Kyari told the EFCC Chairman, Ola Olukoyede, during a meeting in March.

According to the NNPCL boss, this kind of oil theft does not happen anywhere else in the world.

“When we say illegal connections, they are not invisible things, they are big pipes that require some level of expertise to be installed. Some of them are of the same size as the trunk line itself. No one would produce crude oil knowing full well that it is not going to get to the terminal. That is why nobody is putting money into the business. So, you can’t grow production,” he lamented.

The comment from the NNPCL GCEO was a testimony to how organised the crime of oil theft had been running in Nigeria over the years.

While addressing the senate in March, the NNPCL GCEO remarked: “Some of the scale of infractions that we see is unbelievable; we are not able to deal with them. When you remove one connection, the next day in the same location, someone will replace it. It is obvious that crude oil theft is almost an end-to-end issue in Nigeria, and it is very obvious that everyone is involved.

“In most of these locations, they are less than a hundred metres from settlements; some are even less than a hundred metres from local government headquarters,” he said.

Kyari spoke further, “It is very obvious that despite all the integrity issues with our pipeline and our facilities, we have capacity beyond 2 million barrels per day without doing anything.

“But today, we are struggling to meet the budget estimate of 1.6 million barrels per day.

“In 2022, it became so obvious that if something dramatic was not done, we were going to run into trouble. On a specific date, our production came down to as low as 1.1 million barrels per day. And on a particular date, we went below a million barrels”.

Our correspondent gathered that after crude oil had been stolen, people involved in the trade transported the product to waiting buyers through the waters. This stolen oil would be refined at locally-made illegal refineries to produce premium motor spirit, diesel and kerosene.

A fire is set up in a pit under a metal drum and the crude oil is heated and condensed into different petroleum products, which is then funnelled into a cooling chamber.

Our correspondent gathered that those in this act of economic sabotage are billionaires. They live in lavish houses, ride expensive cars and thereby make the crime attractive to the younger ones.

In January 2022, the former governor of Rivers State, Nyesom Wike, declared 19 persons wanted for allegedly operating illegal crude oil refining sites responsible for the black soot in the state. A top government official in the state was also investigated for aiding and abetting oil theft.

Wike equally ordered the 23 Local Government Area chairmen in the state to destroy every identified illegal crude oil bunkering and artisanal refinery site, tasking the police, the Nigeria Security and Civil Defence Corps and others to provide adequate security for the local government chairmen as they embarked on the mass destruction of illegal refining sites across the state.

Wike’s action at that time was a poignant reminder of how deeply the act had eaten into the fabric of the nation’s oil sector and the danger inherent in the practice.

Hundreds of lives lost

In April 2022, no fewer than 100 people were killed on a Friday night after an illegal refinery went up in flames at the Abaezi community in the Ohaji-Egbema Local Government Area of Imo State. Six vehicles were razed during the incident which threw the community into mourning.

A PUNCH correspondent, who visited Abaezi counted no fewer than 50 bodies burnt beyond recognition at the scene of the explosion. The Imo State police command declared the owner of the illegal refinery, one Okenze Onyenwoke, wanted then. It could not be immediately confirmed whether or not the said Onyenwoke had faced the law in the last two years.

Between January 2021 and October 3, 2023, a total of 204 lives were said to have been lost to the activities of illegal refineries, a report by The PUNCH said.

Media reports noted that 25 people including minors lost their lives in an explosion that rocked an illegal oil refinery in Rivers State on October 24, 2021. Findings by The PUNCH revealed that in 2022, no fewer than 150 lives were also lost to explosions from illegal refineries.

However, amid the explosions, many still engage in the deadly adventure in their quest to make money. Young Nigerians, including graduates in oil-rich communities, had resorted to oil theft, blaming unemployment.

Weekly, the NNPCL announces its efforts to rid the nation of oil theft and illegal refineries.  Between April 20 and 26, about 57 illegal refineries were uncovered in the Niger Delta. From April 27 to May 3, a total of 145 illegal refineries were discovered and destroyed. In the following week, 87 illegal refineries were uncovered in the same region.

The NNPCL gets its reports from different incident sources, including Nigeria Agip Oil Company, Pipeline Infrastructure Nigeria Limited, Maton Engineering Limited, Tantita Security Services, Shell Petroleum Development Company, NNPCL Command and Control Centre, and Government Security Agencies.

Between December 30, 2023, and January 5, 2024, 52 illegal refineries were sighted in Abia, Imo, Rivers and Bayelsa states. On January 6, the NNPCL reported that 83 illicit refining sites were found and destroyed. Also, 34 were reportedly spotted in different communities in Rivers, Bayelsa, Delta and Abia States in the last week of January.

This indicates that an average of 60 illegal refineries are being discovered weekly across the country, yet the menace keeps thriving by day.

On different occasions, the Federal Government hired the services of private security bodies to help in the fight against oil theft and illegal refineries, when it seemed the conventional security agents like the Nigerian Navy and the NSCDC could not ‘navigate’ the creeks effectively. Though there were mixed reactions about the efficacy of these private bodies, it appears more still has to be done.

The spokesperson of Tantita Security Services, Mr Paul Bebenimibo, told The PUNCH that the efforts of the private body in fighting oil theft and illegal refineries were in the news. It is, however, disturbing that the menace is still very rife.

Community leaders indicted

According to the NSCDC, some community leaders are the reason why illegal refineries keep resurrecting after they have been destroyed by security agents.

Speaking in an interview with The PUNCH, the NSCDC Public Relations Officer in Rivers State, Olufemi Ayodele, said sometimes, there will be connivance among the community leaders and the communities where the economic sabotage takes place. This, he noted, justifies the reason an illegal refining site is dismantled and subsequently rebuilt.

Ayodele, a Superintendent of the NSCDC, recalled a recent operation the agency carried out at Odagwa Community in Etche Local Government of Rivers State by the NSCDC Commandant General Special Intelligence Squad. The corps had uncovered an illegal refinery at Odagwa. The operation he recounted, spanned over seven hours of operational tour.

“Galvanised metal pipes and large hoses were connected to vandalised oil well heads and the pipes were connected to several cooking ovens and tanks with about 60,000-litre capacity; the process was channelled to over 15 reservoirs prepared for onward loading to would-be buyers,” he said, stressing that the agency carried out the operation following credible intelligence.

Intelligence gathering, according to the PRO, requires money, saying those giving information have trust in the NSCDC because it values and protects its informants, some of whom were aggrieved members of the illicit trade.

“Sourcing for information is costly. An aggrieved member of a cartel may wish to offer a piece of information because he wasn’t ‘settled’ as expected, such an individual would want to be paid highly before he could give the necessary information needed to effect an arrest,” he disclosed.

He listed logistics challenges like lack of enough operational vehicles, modern surveillance equipment and communication gadgets as one of the factors inhibiting the fight against illegal refineries, calling for adequate funding as well as retraining of officers to match up with the contemporary security challenges.

The officer recommended, “Multinational companies should endeavour to provide necessary security mechanism (Alarm systems) for detection of crime this would assist the security agencies in monitoring the pipelines and well heads.

“The illegal refineries keep emerging because there is no consciousness that pipeline vandalism and crude oil theft are crimes against the government and the people. The government can also ratify and regulate the construction of modular refineries. The IOCs should do more in the area of Corporate Social Responsibility as a form of encouragement and environmental development to the communities.

“The public need to be aware that all acts of illegal dealings in petroleum products, operating illegal local refineries, vandalism, tapping oil well heads, burning of crude among others contributes to environmental degradation and thus affects the aquatic life and causes environmental pollution”.

Ayodele concluded that the NSCDC Commandant-General, Dr Ahmed Audi, had reiterated over time that any personnel caught aiding and abetting illegal oil bunkers would be dealt with decisively by the Public Service Rules and NSCDC Code of Ethical Standards.

Security agents indicted

A professor of Energy Law at the University of Lagos, Prof. Ayo Ayoade, opined that illegal refineries exist because Nigeria has ungoverned spaces not well secured, saying the issue of illegal refineries has been around for a very long time as people make money out of it.

“Some of the people that are supposed to be securing those environments are also participating or collecting bribes from the people in illegal refining, stressing that the security agents are supposed to stop this act, but they were not doing enough. He raised questions about their welfare.

“How much are you paying them? You don’t treat them well. You post them into places where they can be bought over even if they are honest people. I am not justifying criminality, but can the salary and emoluments paid to them take them home? If you want a proper police force, you must fund it and you must punish criminality in the security services, because everybody seems to be looking the other way. That’s what has been happening for a very long time; and this criminality, who are those involved? Who are the stakeholders?

“The communities are involved to some extent, local leaders are involved, the youth leaders are involved. So, when criminality is so widespread, it’s very difficult to just suddenly cancel it. In the meantime, they’re despoiling and ruining the future of the Niger Delta, which is the environment,” he remarked.

Govt can’t legalise illegal refineries

The don recalled that there was a suggestion asking the government to legalise the illegal refining sites, saying the government cannot legalise illegalities.

“I have very serious misgivings about the suggestion to legalise or license the illegal refineries. What happens if you legalise crimes, where does it end? You also find out that illegal refineries were not built with any purpose, they did not do any environmental impact assessment, and no legal regime has been followed. And they have been polluting and destroying the environment for a long time. These are the people wrecking the ecosystems of the Niger Delta. How do we now legalise or formalise this kind of behaviour?

“The government is supposed to impose its will and its security should be present all over the country, but you cannot do that because of compromise and a lot of money in that game. The government has to take what policy it wants to take. I’m just giving my view that I don’t believe that legalising a crime is good for a country where criminality is so rife. The government should secure and stop illegal refineries. When the product is refined, how does it get to the market? That’s why in criminal law, the receiver of stolen property is given a more severe sentence than the thief, because if the receiver of stolen goods does not exist, the thief will not go and steal because he has nobody to collect it for him,” Ayoade emphasised.

He condemned setting the refining sites on fire, saying it releases toxic smoke and causes more environmental damage.

“Does that help? But it’s because they don’t seem to know what to do. The problem with Nigeria is that we don’t consult experts and stakeholders before making laws. That’s why you set up your universities, and research institutions.

“If you burn the refineries today, tomorrow they set up another one. It doesn’t cost much and the crude oil is free. They’ve been profiting from it. Has a single person gone to jail for illegal refinery? None to my knowledge. Are you telling me nobody knows who they are? Once criminality has become common, then it’s accepted by the community and nobody has been able to tackle it. If you want to tackle it, you start tackling it from the different angles, from the root cause,” the professor noted, saying other countries coloured their fuels to be able to arrest those selling unauthorised ones.

Maltreatment

Ayoade suggested what he called cooperative ownership of natural resources to give the  Niger Deltans a sense of belonging.

He explained, “The people of the Niger Delta, despite what’s happening to them, they feel like why are they suffering for Nigeria? It’s their money and their resources that are feeding the whole country and they’re not getting anything from it. That’s why they’re going to do this criminality.

“Sooner or later, the government will follow what I’ve been advocating for many years, which is cooperative ownership. Ownership cannot be singular. The Federal Government cannot own the entire resources. It must be cooperative ownership of natural resources. We must amend our constitution. If the community has an ownership stake, if the state government has an ownership stake and if the Federal Government has an ownership stake, they can defend their rights”.

This, he added, is better than sitting in Abuja to issue licences to those who take over the resources, leaving the community with nothing.

Environmentalist warns

On several occasions, the Nigerian Navy shared videos of how it has succeeded in burning down illegal refineries. However, an environmentalist, Mr Ola Oresanya, disagreed with that method of deactivation, stressing that it impacted the environment negatively.

Oresanya, who is the Commissioner for Environment in Ogun State, maintained,  “You don’t have to be an environmentalist to know that burning the sites is pollution, and you don’t solve a problem by creating another problem. It’s not the best way. You can confiscate the oil and make better use of it. But if you must destroy it (which is not advisable), just add salt in the crude to render it useless; but putting it on fire is not the best, from an environmental standpoint.

“When you start burning, it spills oil into the water, you destroy the aquatic life of the communities; you destroy the air, the water and you destroy the underground. It’s not desirable at all,” Oresanya added.

As the government grapples with the enduring challenge of illegal refineries, the Niger Delta and its people bear the brunt of this destructive trade. The region’s ecosystem is under siege, its waters polluted, and its people exposed to dangerous health risks.  Urgent action is needed to dismantle the infrastructure of illicit refining, address systemic corruption, and empower communities to safeguard their resources and futures. Only then can Nigeria reclaim its natural wealth and ensure a sustainable future for all its citizens.