The Looting Of Nigeria: BIG OIL’s $140 Billion A Year and Counting By Thomas C. Mountain

Niger Delta
By Thomas C. Mountain

As western oil companies loot some $140 billion a year of Nigeria’s black gold, two thirds of the country’s 100 million people live on less than $2 a day.

Nigeria’s “official” oil production figures show about 3 million barrels a day being pumped from their oil fields into the holds of western tankers, though for decades now informed observers have estimated up to one third of all Nigerian oil is actually “stolen”, secretly loaded onto oil tankers after bribes are paid to corrupt government officials.

If 4 million barrels of oil are being shipped out of Nigeria daily at $100 a barrel, times 30 days a month, times 12 months, you arrive at almost $150 billion a year in potential oil revenues for Nigeria.

The problem is not just theft but the fact that the western oil companies are literally looting Nigeria’s oil, paying as little as a 9% royalty.

Do the math, 9% of $150 billion minus the one third oil that is stolen and the Nigerian government only receives about $10 billion a year of this amount.

Simply put, at $100 a barrel, the western oil companies get $91 and Nigeria only gets $9. Or more shockingly, Big Oil makes $140 billion a year vs. Nigeria’s $10 billion.

The Big Oil robber barons famously promote themselves as “investors” in Nigeria, though when looking at the loot they are making from what should be Africa’s richest country it is doubtful that they have invested $140 billion in Nigeria in total over the last decades (Big Oil is notorious for sticking the host countries with a major share of infrastructure expenses, deducted from their royalty checks).

In other words, Big Oil has made its investment back almost exponentially. And all the while Nigerians are hungry, sick, and increasingly fed up.

What have the people of Nigeria gotten from all this wealth being looted from their country?

Malnutrition and disease are rampant across the country. Many if not most of Nigeria’s children have never seen the inside of a school room. Many if not most of Nigeria’s people simply cannot afford even primary medical care. Malaria, water borne diseases, TB, HIV/AIDS, the list of sicknesses killing Nigerians in the thousands every day is criminal.

Nigeria’s environment has been a victim with a large swath of the coast lying under a toxic blanket of oil, mainly as a result of the criminal failure of Big Oil to do even basic maintenance on its pipelines.

Yet Nigeria has the largest, best equipped army in west Africa, the better to enforce Pax Americana. As I write, Nigerian troops are pouring into Guinea Bissau, there to restore “democracy”—something they have done many times in the past.

Nigeria should be wealthy, its people the envy of Africa, if not the entire developing world. Instead its cities are filled with homeless children begging for their daily bread.

Nigeria imports almost all of its fuel needs, selling its oil for $9 a barrel and buying back the gasoline, diesel and kerosene made from its oil for hundreds a barrel.

Nigeria is in constant need of IMF bailouts and pays the price for such predatory loans. Earlier this year after Queen of the IMF, Christine Lagarde, paid a visit, Nigerian President “Badluck” Jonathan was forced to kneel down and kiss her feet, promising to more than double the price desperate Nigerians are forced to pay for their fuel.

The kleptocrats that rule Nigeria under the banner of “democracy”, for they stole the elections fair and square, cannot even provide electricity to their people, with most Nigerians receiving only a few hours a day of electric supply, if any at all.

Nigeria’s other infrastructure, what little there is, decays by the day with even its once functional railroads now barely operational.

Yet this is all applauded by the west, with Nigeria’s President a permanent member of the so called G-20 council of world leaders.

One of the leading candidates for the title of “Queen of African Kleptocracy”, the Nigerian Finance Minister, complained bitterly after she was rejected by Pax Americana to head the USA majority owned World Bank. Talk about the fox wanting to rule the chicken coop.

All this looting and theft has left a once proud and self-sufficient people on the brink of a major explosion with government repression barely containing a cauldron of ethnic/religious violence that continues to erupt in murder and mayhem. Muslims killing Christians, Christians killing Muslims, and the army killing ethnic rebels taking up arms over the looting and destruction of their homelands by the western oil companies.

These days the western media have begun carrying alarming reports of a dramatic decline in Nigerian oil production, down according to some reports by as much as 25% in the last few months. As bad as matters are already for Nigeria’s suffering millions, what is to come may be far worse, for without even the small morsels that their western masters allow to fall from their oil burdened tables the Nigerian economy is headed for a collapse, being almost completely dependent on their oil exports.

What is going to happen if Nigeria’s oil fields begin to run dry? Only time will tell, though thanks to the looting of Nigeria one might be forgiven for holding little hope for what should be one of the jewels of Africa.

Thomas C. Mountain is an independent western journalist based in the Horn of Africa, and has been living and reporting from Eritrea since 2006. He was a member of the 1st US Peace Delegation to Libya in 1987.            

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THE ARTICLE IS NONESENSE AT BEST!!!

People for reasons best known to them write rubbish and put it in blog for gneral readership. The writer does not have any data to support his allegation and I am forced to conclude that his thesis is but nonesense. Here is my data.... With alleged loss of 150,000 Bbls a day at the the current $ 95 per barrel, Nigeria will loose about $ 3.5 Billion a year and that will be a far cry from $ 140B a year alleged by the writer. Let us work backwards, for Nigeria to loose
$ 140B, she has to produce excess 3,000,000 Billion
a day for the purpose of feeding the theft requirement.
The problem is that the commulative production level is not even up to 2,000,000 Bbl and that including attained and excess for theft. Conclusion, factually fraudulent data that should not be presented in the first place and is rubbish.

From the oxen's mouth 4

The current Petroleum resources minister admitted recently that over 150,000 barrels of oil is stolen everyday in Nigeria. So if the Nigerian government can officially admit the theft, why the pretenses on the part of those of us at the receiving end of the corrupt practice. What I expect all Nigerians of goodwill to do is lend our voice to calls for the total overhauling and sanitizing of the operations of the oil industry in Nigeria, to make it more transparent and accountable both financially and in environmental stewardship.

From the oxen's mouth 3

To the anonymous commentator that asserted that oil companies pay 85% in taxes, does it sound rational to increase taxes beyond 85%? Where in the world are companies taxed that high whether it is an oil company or not? Let us assume that oil companies operating in Nigeria pays 85% of their income in taxes, how come they still find investment in Nigeria lucrative? The only logical answer of course will be that they are able to steal one third of their production with government official’s collusion. This sort of lends credence to the assertions of Mr. Mountain who incidentally is not the first person to raise concern about oil bunkering in Nigeria

From the oxen's mouth 2

Under Risks Factors;
"An erosion of the business and operating environment in Nigeria could adversely impact our earnings and financial position.
We face various risks in our Nigerian operations. These risks include: security issues surrounding the safety of our people, host communities, and operations; our ability to enforce existing contractual rights; limited infrastructure; and potential legislation that could increase our taxes or costs of operation. The Nigerian government is contemplating new legislation to govern the petroleum industry which, if passed into law, would likely have a significant impact on Shell’s existing and future activities in that country and could adversely affect our financial returns from projects in that country."

From the oxen's mouth

These are excerpts from Royal Dutch Shell 2011 Annual Report
Under Activities;
"Shell is one of the world’s largest independent oil and gas companies in terms of market capitalisation, operating cash flow and oil and gas production. We aim to sustain our strong operational performance and continue our investments primarily in countries that have the necessary infrastructure, expertise and remaining growth potential. Such countries include Australia, Brazil, Brunei, Canada, Denmark, Germany, Malaysia, the Netherlands, Nigeria, Norway, Oman, Qatar, Russia, the UK, the USA and, in the coming years, China"

I think that Nigeria will

I think that Nigeria will find a way to survive if the oil supply will dry out some day and this is not even going to happen anytime soon because it really has oil.Nigeria is a beautiful country and if they work a little at the infrastructure and the garbage, for the last one i recommend SLC junk removal everything will turn out great.

Hi all! I have read up on

Hi all! I have read up on the tinnitus thing. I've even visited an ent. I was offered no solution to my ear issue. My proper ear feels full and rings quite a little. I was wondering if there was indeed a way to quit this ringing. I feel like it's realted to my extreme allergies. I nearly really feel like, given that mucus is continually draining from my nose and down my throat, that some of the fluid is obtaining into the ear. Am I correct in thinking this? Are there any options to this issue?.

Re: Uninformed Write up

@Anonymous
You missed the point. Go back and reread the information presented in the article and rescind your write up by way of an open apology to the writer and readers who identify with the information ...

Sahara Reporters are incompetent for "platforming" this garbage

An average reader will immediately see the irresponsibility in this write-up. I am shocked Sahara reporters allowed an article with no facts, spiced up with cheap propaganda to post on their page. This is an insult to our intelligence. Mr Mountain thinks he can come and simply state that Nigeria is being looted and we'll lose our thinking hats. Challenge to Mr. Mountain...State your source on the 9% royalty. coming up here to say anything 9% , 1% is cheap ..how is it derived? The saddest part of it all is reading the comments and seeing my fellow Nigerians dancing to this false tune of how Western oil companies have "looted" Nigeria. If we have many Nigerians that are this gullible , then we'll continue to have propagandist leaders in Aso rock. These are the people voting for the next president, governors etc.

Uninformed write up

My very good and interesting reporters. It's quite unfortunate that we paint a quarter truth and use this to portray the country and investors in a bad light most of the time all in the name of journalism. I believe that as a journalist, facts should be well looked into and presented in the most accurate way to ensure that the generality of Nigerians are not mislead and misinformed. Back to my reason for this comment. It will be interesting to note that the tax regime of oil companies is 85% as against the 30% paid by all other companies outside the oil and gas industry. Hence, for every profit that the Big Oil's make, they pay 85% of it as tax while employing and being involved in CSR activities. This is just a few observations. It's always good to carry out investigative journalism when posting articles that will be read by a number of people both within and outside the shores of this country. God bless Nigeria, God bless Sahara Reporters and God bless us all.

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God help Nigeria

God help Nigeria

re:

love it! very interesting topics, I hope the incoming comments and suggestion are equally positive. Thanks for sharing information that is actually helpful.

allinfouneed
www.tulleeho.org

Are you retarted??? You must be.

What exactly isn't correct about the article?

What garbage

I was not going to confer the dignity of response to this childish crap, but, because of its degree of insult and assault on the motherland, I decided otherwise. What an utter socialist insult on the people of Nigeria. This childish rant, contributes greatly to the debasing of SR. I doubt the SR editorial board has read this rant, if it had, it would have rejected it outright as utter garbage. SR, your readers are way too intelligent for this dribble masquerading as an article. As a Nigerian, I find this article deeply offensive and should be removed henceforth by SR. All it is is an old and tired socialist polemic nonsense, that adds nothing, but instead insults our intelligence as Nigerians.

Numbers?

Where did you get your numbers from?

I agree with you. This writer

I agree with you. This writer is either mischievous or totally ignorant (most likely both). Writers like this will soon confer "junk" status on Sahara Reporters.

Enlightenment

Provide labtops for poor rural families: One labtop per family

Provide online registration and education to the Nigerian people to stamp out illiteracy

Make education and technical skills easier to access for all, and a better country will emerge

Looters as Leaders

Nigerian Leaders (Lawmakers & Executhiefs alike) are all thieves. God will definitely punish all of them. The wealth of the whole Nation end up in the pockets of few thieves who call themselves Presidents, Senators & Rep members. None of them will be spared. The wrath of God will decend heavily on them. This is for all past and present Executhives, Legislatives, Senatives and and members of House of Representathives. God will punush all of you for pocketing the wealth of the Nation. Amen.

Looming crisis

Nationalize all Oil and Gas production, put honest courageous Nigerian in charge for the biggest fight of our national life. Trust me the thevies would definitely fight back.

hi

hi

This is an absolute rubbish.

This is an absolute rubbish.

The Looting of Nigeria

Poor leadership means poverty. Give the local "leaders" a few million Naira and put the rest away in secret bank accounts and in not-so-secret real estates in Europe and North America. I visited U.S. recently and I accompanied my host to an African Market store in the city she resided with her family. When the store owner found that that I had just arrived from Nigeria, he asked if I came with the government official who was occupying with his family that expensive flat he bought for millions of dollars. When I said that I was not, he then asked me why a Nigerian official would be stupid enough to buy expensive homes in other countries and not stay in them for more than three weeks in year, while they pay taxes on those mostly unoccupied homes. Arrogance, stupidity and ignorance would always be fatal. The oil companies steal the billions with the complicity of the Nigerian government officials.

It's not hatred...

Emeka: You are right, let our President work! That's what we have been waiting for, since his assuming control, two years ago. Or has the noise of our chattering been distracting him?
---And for "our world acclaimed Havard trained Finance Minister", what patriotism would be in her leaving us again for the World Bank job had she been appointed the bank's boss? Honestly, we don't hate these people. We are just disappointed.

@Sadisctico: "Obasanjo is

@Sadisctico: "Obasanjo is indeed the best president ever produced by the Yoruba." Ooch! that's low.

I believe that avoiding

I believe that avoiding highly processed foods may be the first step in order to lose weight. They could taste good, but processed foods possess very little nutritional value, making you eat more only to have enough vigor to get through the day. For anyone who is constantly taking in these foods, transferring to whole grain products and other complex carbohydrates will make you to have more energy while feeding on less. Good blog post.
Service Sector

Thank you very much for

Thank you very much for writing such an interesting article on this topic. This has really made me think and I hope to read more.

Hmmmm

na w ooo .. Thsi write up is fishy ..

Well relaxing with my alomo bitters

www.gamugaza.blogspot.com

re:

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MARIZ
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Naija

Only HOPE and GOD will make Nigeria see 2015! nairaland.com/970075/brake-pads-brake-lining