Theft of oil costs oil companies, governments (and the communities they
serve) hundreds of millions of dollars each year in Nigeria alone. In
addition to loss of revenue, oil theft fuels violence and insecurity, feeds
corruption, finances the purchase of weapons, corrupts youth, escalates
youth unemployment, causes environmental pollution and destabilizes communal
The concept of oil certification follows the success of the “conflict
diamonds” initiative and aims to hit the well-organised theft of oil by
choking off the market for the stolen oil and interrupting the supply chain.
Tackling oil theft requires action on both the demand and supply side. It
also requires attention to the root causes of the problem. Following the
success of the “conflict diamonds” campaign and work on disarmament, there
is a clear opportunity to address oil theft by including a focus on the
market for the stolen oil in a comprehensive strategy that would include the
- Law enforcement activities (e.g. monitoring ‘oil theft hot-spots’ and navy
- Initiatives on corruption and transparency;
- Providing sustainable developmental alternatives to communities at the
source of the theft (e.g. micro-credit schemes, community development
- Tracking funds from oil theft and stopping associated revenue flows
- “Fingerprinting” oil at source, during transport and at refineries;
- Auditing refineries for processing illegal oil;
- Establishing common industry-wide positions and action;
- Pressuring markets to only accept “legal” oil.
Effective action on the supply side needs to occur in the context of
initiatives on corruption and transparency. This will press the domestic
aspects of illegal bunkering that give these activities room to operate.
Action will be required in the domains of law enforcement and ensuring
transparency in revenue flows through banks.
Oil certification will target the demand side where oil is transported and
refined. Central to the demand strategy is oil “fingerprinting” or
certification that is critical in hitting the well-organised theft of oil by
choking off the market for the stolen oil. Oil can be “fingerprinted” and
uniquely identified. This means that oil can be analysed to determine its
source. In this manner tankers and refineries can be checked for stolen oil.
This can and should be complemented by audits on oil processing levels, and
particularly whether refineries are processing oil ‘not on the books’.