Stolen Nigerian oil worth billions of dollars is sold overseas every year with much of the proceeds laundered in world financial centers, the likes of Britain and the United States, a report by London-based Chatham House said on Thursday.
The report said an estimated 100,000 barrels per day (bpd) of oil was stolen from pipelines in the Niger Delta in the first quarter of this year, excluding the unknown quantities stolen from export terminals.
Reuters reports that the theft amounts to around 5 percent of Nigeria’s current 2 million bpd production but has a wider impact because oil companies are often forced to shut down pipelines due to thievery.
Nigeria is producing 400,000 bpd below its capacity, mainly due to theft and pipeline closures.
The activity costs the country an estimated $5 billion a year in potential revenue.
While oil majors like Royal Dutch Shell and Italy’s Eni are often the first to complain about theft, it is unclear how much they are losing from it.
“Nigerian crude oil is being stolen on an industrial scale. Proceeds are laundered through world financial centers and used to buy assets in and outside Nigeria,” said the 70-page report, entitled “Nigeria’s Criminal Crude”.
“Thieves have many ways to disguise funds…including cash smuggling, delayed deposits, use of middlemen, bribery of bank officials, cycling cash through legitimate businesses and cash purchases of luxury goods.”
The report named the United States, Britain, Dubai, Indonesia, India, Singapore and Switzerland as likely money-laundering hotspots, and the United States, Brazil , China, Thailand, Indonesia and the Balkans as the most likely destination for stolen oil.
Nigeria’s Oil Minister Diezani Alison-Madueke has called for stolen oil to be labeled“blood oil”, arguing the security risk is similar to those in past and present mineral conflict zones such as Angola, Sierra Leone or Congo