Nigeria not losing $1.5bn monthly to sea pirates, oil thieves – findings

BusinessDay findings have shown that Nigeria is no longer losing $1.5 billion monthly to oil thieves as asserted by United States deputy ambassador to the United Nations, Michele Sison, widely published in the media last week.

Sison made the remark while briefing the UN General Assembly, quoting a 2013 Chatham House report, which BusinessDay check reveals is not a reflection of current reality.

While piracy was rampant in 2013, when crude oil sold for $100 per barrel, the same cannot be true of the situation in 2016, when oil prices have fallen below $40 per barrel, and Nigeria has cut production to levels lower than 2013 output due to vandalism.

“With oil at a low bottom price of below $30 per barrel, piracy is no longer such a profitable business as it was when prices hit $106 a barrel a few years ago,” said Florentina Adenike Ukonga, the executive secretary of the Gulf of Guinea Commission, a regional body that exists to promote cooperation between West African states, many of which export oil via tanker.

Oil prices have dropped from $100 per barrel in July 2015 to less than $40 barrels as a supply glut set in when Saudi Arabia and Iran turned on the taps. The dip in oil prices has substantially reduced attraction to piracy in the Gulf of Guinea and is leading to lesser attacks.

According to the Gulf of Guinea Commission, while 100 attacks were recorded in 2013 with a success rate of 56, only 26 of 69 attacks were successful in 2014.

“The price drop has contributed a great deal in reducing piracy and other maritime crimes in the Gulf of Guinea,” Ukonga said.

Also, Nigeria’s crude oil production has been on the decline in recent times on account of activities of suspected Niger Delta militants who blow up pipelines and disrupt oil exploration.

Recently, the Organisation of Petroleum Exporting Countries (OPEC) in its latest monthly report said Nigeria’s oil production fell by 67,000 barrels per day (bpd) in March.

The report said Nigeria produced 1.677 million bpd in March, down from 1.744 million barrels in February, while Angola oil output rose from 1.767 million bpd to 1.782 million, to make it the highest oil-producing nation in Africa.

Sison had made the assertion on the account of the global maritime watchdog report that states that “as piracy on the world’s seas continue to fall but violence off the coast of West Africa is on the rise and has resulted into capture of 44 seafarers so far this year.”

The International Maritime Bureau (IMB) reports that Nigeria and Ivory Coast account most for the ship hijackings recorded globally.