Nigeria’s oil sector, the backbone of Africa’s largest economy, is under threat from both within and outside its borders. While the Nigerian National Petroleum Company Limited (NNPC) is concerned about international criminal gangs looting crude oil, Aliko Dangote, Chief Executive Officer of Africa’s largest oil refinery, is engaged in a battle with an entrenched “oil mafia.”
- Nigeria’s oil sector faces threats from international theft syndicates and local interests.
- The NNPC highlighted concerns about sophisticated international crude oil theft operations.
- Aliko Dangote encounters opposition from a domestic ‘oil mafia’ against his refinery project.
- The industry struggles with corruption, insufficient infrastructure, and resistance to reform.
NNPC concerns: International oil theft syndicates
At the Africa Chief of Defence Staff Conference in Abuja on Monday, NNPC’s Group Chief Executive Officer, Bashir Ojulari, cautioned that crude oil theft is a sophisticated operation conducted by international and continental syndicates.
SEE ALSO: Oil importers in Nigeria seem to be getting the edge over Dangote
These gangs, he added, use security flaws and poor enforcement systems throughout Africa to pilfer billions of dollars in crude oil each year.
“Crude theft and its attendant illegal activities are by no means a purely localised occurrence; rather, these operations involve specialised international syndicates that take advantage of gaps within the state, national and continental security architecture to conduct illegal activities,” he stated.
“Security forms a key pillar of the energy business and therefore plays a very important and strategic role in achieving national, regional, and continental energy security goals,” he added.
Recent crackdowns by the Nigerian Army’s 6 Division provide insight into the scope of the problem, as reported by the Punch.
Over 32,000 gallons of stolen petroleum supplies were collected, and 69 people were apprehended in a single operation.
Despite these successes, challenges remain in the form of corruption, insufficient infrastructure, and challenging terrain in oil-producing regions.
Dangote’s concern: The domestic “oil mafia”
While NNPC concentrates on external challenges, Aliko Dangote is more worried about local entities attempting to undermine his $20 billion refinery, Africa’s largest.
Dangote called the refinery project the most risky in his career in February, during an interview with Forbes.
Aside from the tremendous financial and logistical needs, he claimed the largest hurdle has come from a mysterious group he dubbed the “oil mafia.“
“The oil mafia is more deadly than the one in drugs because, with the oil mafia, there are so many people that are involved,” Dangote stated.
“You might be wining and dining with them, but these are the guys that are the masters of moving things around,” he added.
Speaking again at an investment event in Lagos in May, Dangote reiterated that the mafia, which is entrenched in Nigeria’s long-standing petroleum importation system, had deliberately attempted to sabotage his refinery.
The Nigerian billionaire elaborated that for decades, these organizations reaped enormous benefits from government subsidies on imported petroleum products.
With the refinery now poised to eliminate Nigeria’s need for imports, its hold on the lucrative import market is jeopardized.
Dangote claimed that attempts to destroy his facility are still underway, highlighting Nigeria’s oil sector’s strong resistance to change.
The NNPC’s fears about international oil theft syndicates, along with Dangote’s war against domestic oil cartels, portray an image of an industry under attack from all sides.
On the one hand, Nigeria loses billions of dollars yearly to international criminal organizations that smuggle petroleum across borders.
On the other hand, major domestic interests are opposing efforts to wean the country off imports and establish a self-sustaining refining sector.
