Stealing Oil Is Easy, Selling It On The International Market Isn't
DAVID GREENE, HOST:
Let's talk now about the price of oil, which is pretty cheap right now, about $50 a barrel. But for some it's even cheaper. It's free; that's because they just steal it. In Nigeria, theft is big trouble. Some 10 percent of Nigerian oil goes missing every day. Julia Simon from NPR's Planet Money team went to West Africa to learn more.
JULIA SIMON, BYLINE: It's not hard to find stolen oil. People put up ads from the Nigerian version of Craigslist saying, come and get it. Bring your own tanker. I contacted one the guys with an ad - Lawrence.
Would it make you more comfortable if you sat here?
I met him at this nice hotel in Lagos, Nigeria. He doesn't call the oil stolen. He uses the slang term - racket.
And what's racket?
LAWRENCE: Racket is more or less non-official. I can say that.
SIMON: Non-official. Lawrence lays it all out for me. In the oil-rich Niger Delta, there are pipelines everywhere. People can go to their local pipeline, drill into it with a power tool and siphon out all they can haul away. Or for oil thieves with a bigger appetite, there's a way to get a whole tanker full of oil. At the oil terminal near the ocean, where empty tankers fill up with crude, some thieves bribe the guys working the pump to get a few hundred-thousand barrels extra.
Stealing the oil is easy, people told me. Selling it on the international market, that's the challenge. First of all, thieves need paperwork - a paper that says this oil is from Nigeria - oh, yeah, sure. It's legit. There are specialists who can get you the official papers, guys like Kossi.
KOSSI: (Foreign language spoken).
SIMON: I met Kossi in Togo, not far from Nigeria. He used to be a taxi driver. Then he became a sort of courier of documents. Remember that oil terminal in Nigeria? Most of the ships are legal. When they pay for their oil, they get a paper with a government stamp. Kossi says if you bribe the officials there, instead of printing one copy...
KOSSI: (Foreign language spoken).
SIMON: ...The Nigerian officials print two. The original copy goes with the legal boat. The second copy is for Kossi. And it's precious because when you attach it to a tanker of stolen oil, you can sail away with oil that looks totally legit. The final challenge for oil thieves is to sell it to a refinery somewhere in the world. To do this, you need a broker. And I met one, not in Nigeria, in Syosset, Long Island.
UNIDENTIFIED WOMAN: Hi...
SIMON: OK. So will you...
UNIDENTIFIED WOMAN: What's your first name?
UNIDENTIFIED WOMAN: Julia, will you sign in please?
In this typical office in a boring-looking office park, I meet...
PAUL OLAKENGGIL: Paul Olakenggil, and I'm a securities and commodities trader.
SIMON: Guys call up Paul from West Africa all the time and say, I have a tanker full of oil off the coast. Do you know a refinery?
(SOUNDBITE OF CELL PHONE RINGING)
SIMON: Oh no, go for it.
When I was with Paul, his cell phone dinged. He got an email from a guy in Nigeria.
Do you need to do something?
OLAKENGGIL: This is from a guy (inaudible). His uncle is a seller.
SIMON: Paul was getting word that a ship with almost a million barrels of Nigerian oil was on its way to Rotterdam. We went online to track the ship.
Oh, my God, there it is. Wow, there are so many tankers.
SIMON: So it's, like, rounding Spain right now.
SIMON: Paul says ships like this - full of oil but with no buyer - the stuff inside is called distressed cargo. Maybe the owners of the oil had a deal and it fell through, or maybe the oil is stolen. He doesn't know for sure.
OLAKENGGIL: The way I look at it, it's possible that some of the crude you're buying and selling may be mixed up with sources that are not that legal.
SIMON: Paul trusts his sellers. He says he doesn't think the stuff in his deals is illegal. But the truth is the further the oil gets away from Nigeria, the harder it is to know what's legal and what's not. I've heard from sources that stolen Nigerian oil ends up in India, in Italy. And when it comes down to it, when people fill up their tank, they look at the price and don't always ask where the stuff came from. For NPR News, I'm Julia Simon. Transcript provided by NPR, Copyright NPR.