Why Illegal Bunkering Thrives in the Niger Delta

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Bunkering in Niger Delta

A recent inspection at the Brass River terminal of the Nigerian Agip Oil Company by the JTF explains why the illicit activities of illegal bunkerers in the Niger Delta continues unabated, Demola Ojo reports

Afew weeks ago, troops from the Join t Task Force, Operation Delta Safe, stormed the Brass River terminal of the Nigerian Agip Oil Company (NAOC) on an investigative mission.

Operation Delta Safe was set up with the mandate to protect oil and gas infrastructure, deter and prevent sea robbery, crude oil theft and other criminalities within the joint area of operation that could impact negatively on economic activities in the Niger Delta.

According to an eyewitness at the location, the inspection was most likely based on reports that the terminal in Brass had been running its operations on “cooked AGO”, a colloquial term for illegally refined diesel.

The source alleged that the Brass terminal had become a dumping ground, a market for practically anybody with these “off-spec” products; that is, products that don’t meet the required specifications. He continued that this is operation has been going on for months and possibly, years.

The Back Story

Brass is an island in Bayelsa State that began as a fishing village. At a time, the town was the main port of the Nembe Kingdom, prompting a historian to call it the “the Venice of the Niger Delta”.

Blessed with beautiful Atlantic Ocean beaches, it has a coastline of approximately 90 km and lies at the mouth of the Brass River, a major inland waterway.

The Nigeria Agip Oil Company – a subsidiary of the Italian multinational group ENI – was established in 1962. The company discovered some oil fields a few years later. By the early 70s, it started production.

In 1972, the Nigerian National Petroleum Corporation acquired a stake in the company. NAOC’s Brass River terminal, about 100km west of Port Harcourt, was inaugurated a year after. By February 2010, the terminal produced 37,300 barrels of oil per day and two million cubic meters of gas.

NAOC (also referred to in this article as Agip) operates in the land and swamp areas of the Niger Delta, and owns 20 per cent of a joint venture arrangement with NNPC (60%) and Oando (20%), with concessions lying within Baylesa, Delta, Imo and Rivers States.

NAOC’s production asset includes 11 flow stations, two plants and one export terminal. The flow stations and gas plants are connected to the terminal in Brass through a 460 km pipeline network.

The Inquest

During the week starting March 18, 2019, the JTF’s Operation Delta Safe under the command of Rear Admiral Apochi Suleiman stormed the Agip terminal. As fate would have it, there were two vessels at the location to supply products. One was a ship named “Messiah 1”and the other, an unmarked non-propelled barge.

However, non-propelled barges have been banned by the Navy from operating in these waters. According to the source, this particular barge along with other vessels, frequently deliver products to the terminal.

“Some of the vessels have a capacity of 500,000 litres with others capable of up to 800,000 litres,” he said. He reckons that about four million litres of AGO (a conservative estimate) must have been discharged at the AGIP facility within a month.

The JTF team duly detained the vessels found at the terminal and went aboard to collect samples of the products for analysis.

Murky Business

Cooked AGO can be visually identified. It is a darker colour than regular diesel because it isn’t well refined. However, the samples are usually subjected to analysis to dispel any doubts.

While good quality diesel sells for around N250 per litre, cooked AGO can be procured for as low as N40 per litre.

According to a barge owner who operates in the creeks but would not want to be identified, the whole cost, which includes the product, the vessel, man power, certification and more, amounts to N100 per litre at most.

“Let me shock you,” he said. “It is still sold to the buyer at close to the market price of 250.”

This has allegedly been going on for years, and allegedly not limited to Brass but also, to some other terminals operated by IOCs in the Niger Delta, in spite of the commendable fight put up by the Nigerian Navy led by chief of Naval Staff, Vice Admiral Ibok-Ete Ibas.

In 2018 alone, the Navy destroyed no fewer than 637 illegal refineries in the Niger Delta.

However, illegal bunkering has continued because the local communities are complicit, along with some rogue security personnel. It is big business in the creeks for those in this nefarious chain.

On the other hand, it is reported that marketers with good quality AGO are forced out of doing business as they simply cannot compete with those who get their products for a fraction of the legitimate rate. These are the companies that employ labour and pay taxes; the loss is not just theirs but extends to the country’s coffers.

The economic ramifications of the illegal bunkering going on the Niger Delta go beyond profits ending up in the wrong hands. The source of cooked AGO is crude stolen from vandalised pipelines. Invariably, any IOC running its operations on cooked AGO is indirectly sabotaging its own business, as well as denying the country billions of naira in revenue.

If there is no market for cooked AGO and other illegally refined products, there would be less incentive to vandalise pipelines.

Cold Trail

When this reporter put a call through to Rear Admiral Suleiman a day after his initial inspection of NAOC’s Brass River terminal, he sounded surprised that word was out. “I’m still working. Don’t let the cat out of the bag. I need to analyse the samples. Call me at the end of the week.”

However, it increasingly became more difficult to reach him, despite numerous calls and text messages. On one occasion he picked up the phone, he cautioned about going to press. “You need to hold on. Your story will not be complete, until you get my input,” he said without confirming the status of the samples he took. This was an assertion that this reporter reluctantly agreed to at the time.

The next time the JTF Commander picked the phone, he told this reporter off for continually calling him. “If I’m not picking your calls, it means I can’t talk,” he retorted. A few days later, he was redeployed to Defence Headquarters in Abuja as Chief of Defence Administration.

Rear Admiral Akinjide Akinrinade took over from Rear Admiral Apochi Suleiman as JTF Commander of Operation Delta Safe on April 1. Speaking during the handover ceremony at the headquarters in Yenagoa, he promised criminal elements in the region a tough time.

However, Rear Admiral Akinjide seems to be in the dark over the operation at Agip’s Brass terminal. Or at least, that is what he said when this reporter reached him over the phone.

“I don’t have a firm idea of what you are talking about. It’s the same Suleiman you will have to reach out to,” he replied.

Still following the trail of the investigation, a call was placed to the Flag Officer Commanding Central Naval Command, Yenagoa, Rear Admiral Saidu Garba.

“Since you have been speaking with the former JTF Commander, I think you should speak with the person that took over from him, because that is an operation that they are doing. I’m not even aware of it,” Rear Admiral Garba said.

“Obviously, if Suleiman had been conducting an investigation, probably he has already submitted it to the people that directed him to conduct the investigation.

“I suspect maybe that task has been completed. You know everything is subject to a lot of cross-checking and corroboration, so if you’re talking of somebody committing an offence of that nature, you need all your facts in place. You cannot make an allegation out of nowhere.

“So you have to follow up with him. It’s not within my purview. I may be responsible for everything that happens there but sometimes, when an investigation comes from outside like that, it may be for checks and balances,” Rear Admiral Garba informed.

With the former JTF Commander still difficult to reach, this reporter decided to hear NAOC’s side of the story. First was the General Manager District (Port Harcourt), Mr Tianni Alessandro, who neither picked his calls nor replied text messages in a period spanning more than a week.

Next was General Manager, Nigeria Content Development, Tajudeen Adigun, who picked up the phone and promised to refer the reporter to a public affairs personnel since he was not authorised to speak. He thereafter stopped responding to calls.

Finally, an email was sent to NAOC’s Managing Director, Lorenzo Fiorillo, who is yet to reply.

Staggering Numbers

If an estimated four million litres of cooked AGO is being sold per month, this amounts to a N1 billion (at a price of N250 for good quality AGO) loss to legitimate, tax-paying suppliers.

Multiply this by months and years and you get a picture of how much is being lost to illegal bunkerers not just in Brass, but across the Niger Delta. This is the root of the proliferation of illegal refineries in the region.

It is a running battle that the JTF in the region has made great strides in, but has not totally won.

In his remarks while handing over to his successor, Rear Admiral Suleiman affirmed that the operation under his command has destroyed and dislodged major militant camps in the Niger Delta, thereby boosting security in the region.

As a result, crude oil production in the country has risen steadily in the past couple of years to over two million barrels per day.

“When I came here in 2016, there were issues of militancy all over my joint operation area,” he said at the ceremony in Yenagoa. “But diligently, we have taken out the major militant camps in the Niger Delta region.”

He reeled out a number of militant camps and kidnapper bases that his troops routed and dislodged.

However, there is more to the winning the war against the economic saboteurs in the creeks than destroying their bases and illegal refineries. If there is no demand, there will be little incentive to cook these products.