Global Policy Forum

Nigerian "Blood Oil"


By Dulue Mbachu

ISN Security Watch
August 8, 2008

Nigeria blames the illegal oil trade for Niger Delta violence and calls for international efforts to hinder it, while militants say the plan is meant to criminalize their legitimate struggle.

When Nigerian President Umaru Yar'Adua was invited in July to be a guest at the summit of the world's richest countries, or the Group of Eight, in Japan, what ranked uppermost in his mind was how to stop a growing trade in stolen crude oil that is robbing his government of revenue and arming militants in his country's oil region. He came armed with the coinage "blood oil" and a proposal to treat stolen oil like stolen diamonds. "I appeal to you and through you to all other G8 leaders to support my new proposal […] that stolen crude should be treated like stolen diamonds because they both generate blood money," Yar'Adua told Japanese Prime Minister Yasuo Fukuda.

Crude oil tapped by criminal gangs in the country's volatile, oil-rich Niger Delta and sold to vessels waiting offshore for onward shipment to the global oil market is not only aiding corruption and violence but is on the verge of provoking war in Africa's most populous country of 140 million people, he warned. Yar'Adua's government says armed militants in the Niger Delta, claiming to be fighting for a greater share of oil revenue for the region's impoverished inhabitants, are using the "cover of militancy" to pursue a criminal agenda by selling crude oil in exchange for weapons, thereby perpetuating an unending cycle of crime and violence. Nigeria estimates that between 100,000-200,000 barrels of oil daily are lost in this way. Since 2005, attacks by armed groups have cut more than a million barrels per day of the country's export capacity.

Fingerprinting oil

The solution to the violence sought by Yar'Adua lies in cutting the circulation of the "blood oil" through improved security in the Gulf of Guinea and introducing a system of international certification in the oil trade that would make illegal oil difficult, if not impossible, to sell.

British Prime Minister Gordon Brown has been quick to buy into Yar'Adua's proposal, declaring after the G8 summit his willingness to provide military assistance to Nigeria to help secure the Gulf of Guinea, which has become one of the most dangerous waterways in the world. "We stand ready to give help to the Nigerians to deal with lawlessness that exists in this area and to achieve the levels of production that Nigeria is capable of, but because of the law and order problems has not been able to achieve," Brown said.

Elaborating on Britain's plans while receiving Yar'Adua in London in the week following the G8 summit, Brown said assistance to Nigeria would include "a trading and advisory support package" that will improve security in the Niger Delta. Such a package will help put an extra 1.5 million barrels a day of the country's oil, lost through smuggling and violence, in the world market to help bring down rising prices, he said. Apart from military assistance, the other half of the job of cutting off blood oil from the global oil market is expected to be accomplished by the science of "oil finger-printing," a technology that makes it possible using analytical chemistry techniques to identify the origin of any oil cargo and determine whether it is legitimate or not.

Originally developed to trace oil reservoirs and determine specific sources of crude in cases where various sources commingle, the technology is now ready to serve the effort to stop the illegal trade in crude oil from Nigeria, according to, a website campaigning against oil smuggling. What remains is to set up the oil industry's equivalent of the Kimberly Process, which is used to tackle the illicit trade in diamonds that fuelled conflicts in Angola, Sierra Leone and the Democratic Republic of Congo.

Beginning with a meeting of southern African diamond producers in 2000, the Kimberly Process got the backing of the United Nations Security Council later in the same year, with the certification scheme coming into effect by 2003. The scheme not only helped bring stability to affected countries, but also pushed significant quantities of diamonds into the legitimate market that would otherwise have been controlled by criminals. Today the illegal trade in diamonds is only "a fraction" of the global trade compared to 15 percent in the 1990s, according to, the website representing the 74 signatory countries. The effectiveness of the process in dealing with conflict diamonds recommends a similar approach to the illegal trade in crude oil, advocates, including major oil companies and the Nigerian government, say. The arrest of a Panamanian-registered ship, MV Lina, and its 14 Filipino crewmembers in Nigeria while carrying a cargo of 160 tonnes of crude not backed by any documentation, days after Yar'Adua's trip to London, appears to underscore the urgency of the situation.

Criminalizing a legitimate struggle?

But militant groups in Nigeria's Delta, who allege decades of exclusion of the region's impoverished inhabitants from their oil wealth by partnerships formed by the government and international oil companies, perceive British moves to provide military support for Yar'Adua and back curbs on the illegal oil trade as aimed at their further emasculation. (See Dulue Mbachu, Niger Delta: Nowhere to hide). "The oil belongs to us, you can't steal what belongs to you," Mujahid Dokubo-Asari, a former militia leader in the Delta who gave up his weapons after a peace deal with the government in 2005, told ISN Security Watch. "It is the government in Abuja, in collaboration with the oil companies, that has been stealing our oil," added Dokubo-Asari, who admitted acquiring weapons in the past in exchange for crude oil.

Estimates made separately by the World Bank and Nigeria's Economic and Financial Crimes Commission indicate that US$400-500 billion have been stolen through corruption under successive governments since oil exports began in the country 50 years ago. In the Niger Delta, which remains desperately poor despite accounting for nearly all of oil exports, decades of resentment first bred restiveness which escalated into insurgency in recent years. Global Witness, the international organization campaigning to break links between the extraction of natural resources, conflict and corruption and led the campaign against the illegal diamond trade, says it has so far not taken up the campaign to stop the illegal trade in crude oil. "We've focused more on transparency, getting the governments and oil companies to publish what they pay," to prevent corrupt money being used to fuel conflicts, Corinna Gilfillan of Global Witness told ISN Security Watch.

In response to the British pledge to provide military backing to the Nigerian government, the Movement for the Emancipation of the Niger Delta (MEND), the main militant group in the oil region, called off a unilateral ceasefire it had declared weeks before and resumed attacks on oil installations. MEND blamed Britain, Nigeria's former colonial ruler, for helping foster the impoverishment of the Niger Delta through its colonial policies. "Should Gordon Brown make good his threat to support this criminality for the sake of oil, UK citizens and interests in Nigeria will suffer the consequences," MEND spokesman Jomo Gbomo said in an e-mailed statement. Even moderate activist groups in the oil region have condemned British plans to intervene and the moves initiated by the Nigerian government to isolate armed militias as common criminals.

At a protest march at London's Trafalgar Square on 19 July, the Ijaw People's Association, an activist group representing the dominant ethnic group in the Niger Delta, accused Britain of seeking sacrifice the inhabitants of the region for the sake of cheap oil. "Neither the Nigerian government nor any foreign power can protect the oil wells or guarantee the continuous flow of oil from Nigeria to the world market," said Inemo Samiama, who led the protest march. "Only the people of the Niger Delta that can protect and guarantee both and Britain should know where real power lies and support the people of the Niger Delta in order to resolve the problems."



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