It is possibly the most dangerous workplace in the world. Young men and women, often working at night, pump crude oil from barges into massive tanks or open air pits, heat it to boiling point with naked flames and then pass the liquid through water-cooled pipes where it condenses and evaporates.
Black smoke billows across the swamps, the waste oil residues are tipped straight into the waterways, and at any point the tanks could explode.
Developed country health and safety officers would despair, but the 500 or more small-scale illegal oil refineries that have sprung up across the Niger Delta in the past five years make diesel and kerosene of good enough quality to use in generators and cars.
But the very real risks of death, illness, pollution and the Nigerian armed forces smashing up the camps are all outweighed by the lure of jobs and money in impoverished communities. No sooner has one refinery camp been broken up than another reopens.
Nigerian authorities estimate that around 150,000 barrels of oil is stolen every day directly from the thousands of kilometres of pipelines that cross the oil rich delta states, and that possibly 25% of this is then taken to makeshift DIY refineries. Until now little has been known about how they operate or are funded, or how important they are for the local economy.
But a report by Stakeholder Democracy Network (SDN) in Port Harcourt, based on interviews with the operators of nine illegal refineries in three Niger Delta states, gives an idea of the vicious circle of pollution and self-destruction that now determines life in the communities, and why the refineries are sanctioned in the full knowledge that they will pollute and destroy livelihoods.
The refineries may be crude, but they need a sophisticated network of high-level corruption led by government security forces to keep them going, the authors suggest.
The roots of the illegal refineries are to be found in the bloody 1967-70 Biafran civil war, the continuing injustice of the poorest people getting no benefit from oil, and the inability of the oil companies to stop or clean up their pollution,the report says.
With life expectancy at just 47 years, miserable health and education services, only half the population having access to safe drinking water, and one in five children dying before they are five, the sense of exclusion has been allowed to grow for decades.
“The government and oil companies are collecting our oil and we don’t have jobs, no money, so we have to collect the oil and refine our own,” says one man. “We have no fish in these creeks because of pollution. Even the farmers, their lands have been polluted with oil – so they all joined the practice of illegal oil refining.”
Another says: “The boys started pipeline vandalising both because of their aggression towards the oil companies and because they saw the amount of money their communities were being offered [after company oil spills]. They went to the creeks not with guns but with the illegal refining business.”
The basic refining techniques, first used in the Biafran war, were resurrected and modernised by militants to provide cash for insurgency. But after an amnesty deal was struck in 2009, the militants returned to their villages “taking their knowledge of refining with them”.
According to the report, the illegal trade often begins in the oil companies themselves, with pipeline operators being bribed up to $6,000 to reduce the pressure in pipes to allow gangs to break in and siphon off the oil. The operators of “tap points” must pay thousands of dollars a month for security, and labour, but they can make over $1m a month from stealing oil and selling it on to traders.
Each refining camp costs about $4,700 to set up, employs 12-20 people, and can make about $7,800 a month profit from sales. But the camp operators must hire boats, bribe the security forces, and pay the communities.
The crude diesel, or kerosene, is then sold for about 50p (62 cents) a litre, either in the communities, which are desperate for fuel, or further afield in cities like Port Harcourt and even Lagos, where black market economies thrive. Many refiners give their host communities small quantities for kerosene or lighting and cooking, and they are allowed to operate because they spend big money renting houses, buying cars and in restaurants.
When the military comes and smashes up a camp, it is often rebuilt within a few weeks. The cost of reconstruction is usually no more than 7% of the total annual profits.
The security forces are now key players in the whole corrupt system, the interviewees suggest. They must be paid off all along the line, from when the first illegal tap is put on the pipeline, to when they collect “transport” fees, protection money, and sales taxes.
But without legal development on the delta, the refinery business is now an important part of community life. “Crude oil theft and the illegal refining business … supports the families, small businesses and social aspirations of many Niger delta communities,” says the report.
“As the communities’ living environments worsen because of [oil company] equipment failures and oil released as part of the refining process, fishing and farming livelihoods deteriorate. This increases the need for cash to buy bottled water and imported frozen fish. When so few other opportunities to earn money exist, the vicious circle intensifies.”
