“More Money, More Problems”– Economic Dynamics of the Artisanal Oil Industry in the Niger Delta Over Five Years
See our press pack for photos, a graphic guide on the industry, and exclusive video interviews with ex-industry workers
New research finds the artisanal oil refining industry in the Niger Delta, Nigeria, is thriving in spite of the current militarised approach, such as Operation 777 AKA Operation Delta Safe. There is now estimated to be at least five times the number of refining camps in the area researched than there was five years ago. There are also ongoing environmental, health, and security problems as a result of the industry.
Growth of the artisanal oil Industry in the Niger Delta
On the ground research in the Niger Delta (Nigeria) by SDN reveals that the informal economy of crude oil theft from pipelines, and camps that artisanally refine this into the finished product, is booming. Increased organisation and production capacity within the informal sector has improved its coordination with the formal oil sector infrastructure. One example of this is the illicit oil which flows into official supplies at petrol stations in Nigeria and abroad.
Amongst other concerns, growth in the industry leads to:
- environmental damage from oil spills via breached crude oil pipelines and refining camps
- sometimes violent competition over resources
- potential contribution to high levels of respiratory health conditions and ‘soot’ from use of poorer quality fuels.
These problems are layered upon, and a result of, the ongoing environmental damage, economic underdevelopment and insecurity resulting from the oil industry and weak governance in the region. The report finds that an increasing proportion of illicitly refined oil is consumed within Nigeria, highlighting the health concerns for people living in Nigeria, amidst burgeoning demand for cheaper fuel. The report indicates that growing profits within the informal sector have not been passed onto workers who continue to be pushed into the precarious informal oil industry through a lack of livelihood alternatives.
Militarised policy and its alternatives
The current response of, sometimes brutal, militarised crackdowns is not only failing to end the informal industry, but provoking militancy in those areas and destabilising the region. Reported results of these crackdowns, like therecent CrocodileSmile III/OperationDelta Safe /Operation 777destroying 436 artisanal refineries, seem effective but the illicit industryhas historically recovered rapidly. The report by SDN recommends a new policy approach based on:
- ending chronic fuel shortages by extending formal sector energy to meet the needs of people in the Niger Delta.
- government adoption of a transparent, development-centred, plan for sustained investment to meet demand in the most affected communities for alternative, sustainable livelihood strategies to pull people out of the informal industry and reduce people entering it.
“When people have needs and we cannot even provide for ourselves, not to mention our families, what do they expect us to do?”Artisanal refining camp worker
“As long as official supply is not extended to our people in the [Niger Delta] creeks, pipelines will be vandalised to refine crude oil”Illicit crude oil dealer
“My hope is that one day I will meet someone that will help me to achieve my dreams and get a good legitimate livelihood”Artisanal refining camp worker
Media contact: Daniel Therkelsen – Communications Officer, SDN
Note to the Editor:
About the report
This report is the result of primary research gathered by SDN across their offices in London and Niger Delta, between 2012 and 2017 to find out how the informal artisanal oil industry has evolved. The Niger Delta occupies 7.5% of the total land area of Nigeria, 70,000km2, and is home to approximately 30 million people. This number is increasing quickly and therefore the need to address the currently neglected basic needs of the population is of paramount importance. The Niger Delta region accounts for over 90% of Nigeria’s proven gas and oil reserves, and the sector earns the Federal Government around 90% of its foreign exchange. Yet despite this enormous wealth of natural and human resources, essential services such as electricity, sanitation, healthcare and primary education have not been delivered to communities. Energy poverty, instability, poor governance, gas flaring, and oil pollution are just some of the myriad issues facing the people of the Niger Delta. https://www.stakeholderdemocracy.org/the-niger-delta/
SDN supports the efforts of those affected by the extractives industry and weak governance. We work with governments, companies, communities and other stakeholders to ensure the promotion and protection of human rights. Our work currently focuses on the Niger Delta, where SDN is an established voice with a presence spanning 14 years.
- PORT HARCOURT, NIGERIA SDN Nigeria Secretariat, 13A Location Road, Off Tombia Extension, Oroazi, G.R.A. Phase 3, Port Harcourt, Rivers State T: +234 (0) 703 1593 783 E: email@example.com
- LONDON, UNITED KINGDOM SDN International Secretariat, The Green House, 244-254 Cambridge Heath Road, London, E2 9DA