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You are here:Home>>Strategic Research & Analysis>>Nigeria looted oil money 'laundered abroad'
Sunday, 22 September 2013 14:07

Nigeria looted oil money 'laundered abroad'

Written by BBC
Nigeria looted oil money 'laundered abroad' Photo: bbc

 

The proceeds from stolen Nigerian crude oil sold each year on international markets are being laundered in world financial centres, a new report says.

 

The London-based think-tank Chatham House said Nigeria's oil was being looted on an "industrial scale".

 

Africa's biggest oil producer should be more proactive in sharing intelligence so foreign governments can help crack down on the organised crime, it said.

 

Losses account for 5% of Nigeria's total oil output, the report said.

 

A conservative estimate - with 100,000 barrels a day believed to be the minimum amount stolen - lost revenues to the Nigerian government this year will be $3.6bn (£2.2bn), Christina Katsouris, co-author of the report Nigeria's Criminal Crude: International Options to Combat the Export of Stolen Oil, said.

 

"Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria. In Nigeria, politicians, military officers, militants, oil industry personnel, oil traders and communities profit, as do organised criminal groups," the report says.

 

It said that oil theft networks used foreign banks among other channels to launder or store their illicit earnings.

 

"Thieves have many ways to disguise the funds they move around the world. These include bulk cash smuggling, delayed deposits, heavy use of middlemen, shell companies and tax havens, bribery of bank officials, cycling cash through legitimate businesses and cash purchases of luxury goods," the report said.

 

People interviewed by Chatham House said other African countries, Dubai, Indonesia, India, Singapore, the US, the UK and Switzerland were possible "money-laundering hotspots".

 

"We tried to find cases of prosecution for money-laundering linked to crude oil theft and couldn't find one," Ms Katsouris said.

 

'Blood diamonds'

According to the report, interviewees said that the US, several West African countries, Brazil, China, Singapore, Thailand, Indonesia and the Balkans were possible destinations for the illicit oil.

 

"Because it's so mysterious we can't be sure that it's confined to a small narrow band of people - in fact we think that there's a very strong likelihood that it is actually going into the legal market," Ms Katsouris said.

 

The BBC's Tomi Oladipo in Nigeria says the Nigerian National Petroleum Corporation (NNPC), charged with regulating the country's oil industry, is often seen as ineffective and corrupt.

Nigeria's former anti-corruption chief, Nuhu Ribadu, agreed that the Nigerian authorities needed to do more to tackle the problem and said it was essential for them to find ways of identifying its crude oil and then tracking it.

 

"It's something similar to the blood diamonds, we need to do it with oil. You must first of all identify it as your own crude, then you will be able to follow it, then whoever buys it you can make a case against that person or the country," he told the BBC's Newsday programme.

 

People living in the oil-rich swamps and creeks of Nigeria's southern Niger Delta region are among the country's poorest.

 

The report detailed how much of the oil was stolen, saying at a local level, gangs tap pipelines or other onshore oil infrastructure, which is then refined locally.

 

But more industrial bunkering involves tapping pipelines on land, under the ground and under water, using huge large hoses to load the oil.

 

"This activity takes place both in daylight hours and at night, and is easily observable from the air or ground," it says.

 

These barges then head for the coast and their crews transfer the oil onto small tankers which go to an "international class 'mother ship' waiting further offshore".

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