Episode 578: How To Steal A Million Barrels Of Oil : Planet Money Stealing oil takes a global system. Lots of people are in on it - small time crooks, criminal bosses, oil tankers owners and corrupt officials.
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Episode 578: How To Steal A Million Barrels Of Oil

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Episode 578: How To Steal A Million Barrels Of Oil

Episode 578: How To Steal A Million Barrels Of Oil

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  • <iframe src="https://www.npr.org/player/embed/359624435/359955249" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Hey, after you get done listening to PLANET MONEY, if you're interested in more great content from NPR, we recommend checking out Ask Me Another. The show has word games and trivia of all kinds, hosted by comedian Ophira Eisenberg and in-house musician, the incomparable Jonathan Coulton. Find Ask Me Another on iTunes under podcasts.

In general, it is not that hard to buy stolen goods. Say you're here in New York, you walk down the street, you get offered a suspiciously cheap bike for sale. It's probably stolen. You go on Craigslist, there's some too-good-to-be-true deals on electronics, iPhones, gold chains.

JULIA SIMON, BYLINE: And that's true everywhere. I live in Nigeria, Robert, and we have our own version of Craigslist. It's called Nairaland.

SMITH: This is Julia Simon. Julia, thanks for joining us. She's a freelance reporter in Nigeria that we've had on the program before. Welcome.

SIMON: Thank you. So yeah, there are the same things online here. You have electronics. You probably have stolen bikes. But there's something else that you guys don't have.

SMITH: Uh-huh (ph).

SIMON: Something that is really only available here in Nigeria. It's under the business section. So let me read from one of these ads. (Reading) Dear crude oil racket buyers. We have 50,000 metric tons of crude oil racket in Nigerian water.

SMITH: And racket is...

SIMON: ...Racket is a slang term for oil that somebody got illegally.

SMITH: So this is an ad for stolen oil, 50,000 metric tons of stolen oil.

SIMON: Yeah. That's huge. That's not just, like, some small container. That's a big oil tanker filled with oil. By my reckoning, that might be, like, $20 million just sitting there out in the ocean.

SMITH: This ad is amazing because the ad basically says, oh, if you want to buy this stolen oil, you have to get a tugboat to get the vessel. And - I love this - buyer and seller have to be together in the hotel to do the deal.

SIMON: There are so many ads like this on the Nigerian internet selling millions of gallons of stolen oil right there. And I wanted to know how. Who are these criminals? How did they get their oil? How are they getting away with it? So I went through these ads, found their names and called them up.

SMITH: Hello, and welcome to PLANET MONEY. I'm Robert Smith along with Julia Simon. Today on the show, we will show you how to steal a million barrels of oil. The internet guys are just the start because to steal oil takes an entire global network. Seriously, lots of people are in on it - small-time crooks, criminal bosses, the owners of oil tankers and corrupt officials. Today, we'll show you how they get away with it.


SMITH: Couple of things you need to know about Nigeria in order to appreciate this story. First of all, there is a lot of oil there. It's one of the top oil exporters in the world after Russia and some of the Middle Eastern states. And oil money basically runs the place. The government owns the oil. Eighty percent of their budget comes from oil. Other thing you need to know - Nigeria is a relatively poor country. Regular people don't have much. They want a little piece of the oil action, and so stealing oil from the Nigerian government has become this huge problem. Independent estimates say Nigeria loses about $10 million dollars a day - 10 million every day - from oil theft.

SIMON: Everybody knows this here in Nigeria. When I started to call up those sketchy guys in the internet ads, they were really open with me. And they even asked me, are you sure that you don't want to buy some stolen oil? A few of them agreed to even meet me.

Would it make you more comfortable if you sat here so people aren't looking at you?


SIMON: You're sure? OK.

I met Lawrence and his friend George in Lagos at this hotel right on the lagoon. It's a really fancy hotel. It had very good security, which is what I wanted. And Lawrence is wearing a T-shirt, jeans. He has this assistant who's sitting there, looking really bored. She's just staring at her phone the whole time. And Lawrence, in his internet ad, claimed he had genuine oil. He said you could take his ship or you could bring your own. But I kept asking him, where does this oil come from?

LAWRENCE: Different people, a lot of people - friends, colleagues.

SIMON: Could you put me in touch with them?

LAWRENCE: No. I told you before. I said, no, no, no.

SIMON: Why not?

LAWRENCE: Because I wouldn't want anyone insulting me or saying things that, you know - so I wouldn't want that.

SIMON: They won't tell me where they got it or how they got it, so I ask George if maybe I could go to the Niger Delta to see where the oil comes from.

GEORGE: No, no, no. I wouldn't even advise it because you'll be kidnapped. As you're just coming down from the airport you'll be kidnapped.

SIMON: I don't want to go. Don't worry.

GEORGE: No, you will not because you might end up losing your life. They will ask you for big ransoms. And the people there are very, very rough.

SIMON: Lawrence and George did tell me a little bit about the business, and I talked to other internet sellers. I talked to people in oil companies. I talked to government officials. I talked to experts. And now I think we're able to piece together how the oil heist works.

SMITH: Step one, steal the oil (laughter). I know that sounds like the whole thing. But this is the simplest part, steal the oil, because in the Niger Delta, the oil runs everywhere. It's kind of this dense water world with lots of swamps and creeks. And it is laced with oil pipelines. They are laid down like railroad tracks. You can see this in pictures - big sets of pipes cutting through forests and towns. And just like how in any small town in the United States you could basically walk to a railroad track, walk right up to it, that's how easy it is to walk up to your local pipeline in the Niger Delta.

SIMON: We talked to Alexandra Gillies. She's an expert on the Nigerian oil sector. She works for the Natural Resources Governance Institute, and she's seen the pipelines up close.

ALEXANDRA GILLIES: Unlike a lot of places where oil is produced in the middle of the desert or offshore, in Nigeria it's produced in a part of the country where a lot of people live.

SMITH: So literally, there's pipelines in someone's backyard?

GILLIES: Yeah. And so if you have a pipeline there and you have a valuable commodity running through it, there is a temptation if you are very poor to drill into that and try to make some money out of that.

SMITH: And can you literally - like, what are we talking about? Like, a power drill?

GILLIES: Yeah. I mean, you need a power tool. You can't kind of go at it with a hacksaw.

SMITH: Actually, we checked and we found that some people do use hacksaws. Oil theft can be as simple as, you know, a bunch of friends with a sharp tool and a siphon, or it can also be a gang with some serious equipment.

SIMON: I talked with this woman who told me this story. She went up in a helicopter over the Niger Delta with an oil company executive, and as she was looking down she saw this huge hose that was going from the pipeline to this boat waiting in the creek. So they were basically siphoning the oil through this hose. And the guy who was manning the hose, he was wearing an oil company uniform. The oil company executive, he turns to her and he says, those guys definitely aren't working for us.

SMITH: That's one way to get small amounts of oil. But if you want the mother lode, if you want massive, massive quantities of stolen oil, you've got to go where all the oil pipelines meet. You have to go to the oil terminal. Now, an oil terminal is this giant port on the ocean. It's like a giant gas station. Empty oil tankers line up in the harbor, some of them as long as two, three football fields long. And these ships are waiting to fill their holds with crude oil from the pipelines.

SIMON: Now, here in Nigeria, there are these rich, powerful men. They're kind of mafioso types. They call them Ogas (ph). And some of these guys run criminal syndicates. They have mansions, they have fancy cars and they have access to empty oil tankers.

SMITH: So if you're an Oga with your own oil tanker, you can pull it up to this oil terminal, bribe the guys running the pump and get a few hundred thousand barrels of oil inside. It's like slipping a $20 bill to a gas station attendant, having him fill up the tank for free. It's so common there is a name for this in the oil business. It's called the illegal top-off.

SIMON: So congratulations, you now have a ship full of stolen oil. But in order to sell the oil, you have to make it look legit.

SMITH: That brings us to step two, disguise the oil. In order to move oil from one country to another, you need paperwork, a document that says yes, this oil legally came from Nigeria. I paid for it. I paid my taxes. A criminal may have $20 million worth of crude oil on a ship, but it is worthless without that piece of paper. A buyer anywhere in the world needs to see that paper.

SIMON: I met a guy who can get this paper for you. His name is Kosi (ph).

KOSI: (Foreign language spoken).

SIMON: He introduces himself as a simple businessman.

KOSI: (Foreign language spoken).

SIMON: Kosi lives in Togo, not that far from Nigeria, and he used to be a taxi driver. That's actually how he got into the stolen oil business because one day this foreigner, a Chinese guy named Mr. Ling, gets into his cab. Kosi is driving him around. He's a good driver. He becomes a regular customer. And one day, Mr. Ling invites Kosi up to his hotel room, sits him down. He says, look, I work in stolen oil. I have a deal for you. I need you to go to Nigeria and get me paperwork.

SMITH: Here is what Kosi did. Remember that export terminal in Nigeria? Most of the ships that go in and out every day are perfectly legal. And when they pay for their oil, they get their paperwork - piece of paper, government stamp. Kosi says if you bribe one of the officials there, instead of printing one legal copy...

KOSI: (Foreign language spoken).

SMITH: ...The Nigerian official prints two copies.

KOSI: (Foreign language spoken).

SIMON: The original copy goes with the legal boat - nothing strange there. The second copy, that was for Kosi. Kosi would fly to Nigeria and he would pick it up in person. It was way too valuable to pop in the mail. Kosi would go back to Togo, he would give it to one of Mr. Ling's friends, and then that guy would take it to Mr. Ling in Beijing.

SMITH: Mr. Ling could now buy a tanker filled with stolen oil. He could basically attach the piece of paper to the shipment and this boat could sail away with something that looked legal. It was, as Kosi says, a perfect copy.

KOSI: (Foreign language spoken).

SIMON: Voila. Kosi says if you are stopped on the high seas, you show them this piece of paper, everything looks official. Se parfait - it's perfect.

SMITH: Step one, get the oil - check. Step two, get the paperwork - check. All you need now is step three - find a buyer. Not as easy as it sounds even with Kosi's document because these guys with their stolen oil, they can't just call up Chevron and say hey, I found all this oil out here floating on the ocean, and do you guys want some of it?

SIMON: Yeah, you can't do that. You need to find buyers who are willing to look the other way. And a few years ago, people started hearing rumors about this place where you could actually buy and sell stolen oil. And we're talking about boats here, so this place is way out in the middle of the ocean.

ARILD NODLAND: It was referred to us by sources in Nigeria.

SMITH: This is Arild Nodland in Norway. He's the CEO of Bergen Risk Solutions. He's a security consultant. And he says this place, this secret spot, was known as the Togo Triangle.

NODLAND: It was a transfer area off the western Niger Delta where a lot of the stolen oil were transferred from small boats coming from the Niger Delta into bigger tankers waiting offshore. So it seems to be a hub of the transfer of stolen oil off Nigeria.

SMITH: The Togo Triangle. You won't find it on any maps. It is just this agreed-upon meeting place. And you should picture sort of an open-air drug market - ships big and small literally making deals out on the water. Sometimes one guy sells an entire tanker to another guy. Sometimes a big tanker will suck the oil out of a smaller boat. These are multimillion-dollar deals.

SIMON: The oil moves from ship to ship in the Togo Triangle, gets mixed in with legal oil, and by the time the ship leaves it's really hard to know where that oil came from originally or who the original owners are.

SMITH: It is time to make the final deal. Who wants totally legit-looking crude oil? Refineries. Big refineries that turn crude oil into gasoline so you can put it in your car. Now, a lot of Nigerian oil goes to refineries in the Middle East, Asia, Europe. And refineries are always looking for more crude oil.

SIMON: There are people whose job is to scour the globe for big tankers

SIMON: full of oil and to make a deal with a refinery. I actually saw this happen. It was not in Nigeria. It wasn't in Togo. Robert, it was actually a lot closer to where you are. It was in Syosset, Long Island.


SIMON: OK, so will you...

UNIDENTIFIED WOMAN: ...What's your first name?

SIMON: Julia.

UNIDENTIFIED WOMAN: Julia, will you sign in, please?

SIMON: Sure.

This is a typical office. It's in a pretty boring-looking office park. And the guy I'm meeting has a very generic job title.

PAUL OLUKINGU: My name is Paul Olukingu (ph), and I'm a securities and commodities trader.

SIMON: Paul is this tall Indian-American man, and he used to be a customs agent back in Bangalore. He tells me he used to ride on boats out on the high seas, looking for smugglers.

SMITH: Now Paul is basically a middle man. And since we've been talking so much about criminals here, we should make it clear that Paul says he has never done a deal with stolen oil. He's been offered suspicious oil, but he only works with people he trusts. Here's what he does do - guys call Paul up from West Africa saying, look, I have a tanker of 1 million barrels of oil off the coast. Do you know a buyer? Do you know a refinery? And if Paul makes the deal, he gets a cut.

SIMON: When I was with Paul, this actually happened. His cell phone dinged.


SIMON: It was an email from a guy in Nigeria.

Do you need to do something?

OLUKINGU: I wanted to show you so that...

SIMON: ...Oh, sure, sure.

OLUKINGU: That's why I...

SIMON: ...Yeah.

OLUKINGU: This is from a guy I'm direct. His uncle is a seller, OK? He just sent me now a ship's cargo for TTO, which is coming in Rotterdam.

SIMON: Paul was getting word that this ship with almost a million barrels of 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: It's, like, on its way up through...

OLUKINGU: ...Rotterdam, yes.

SIMON: It's going to round Spain, go past France and go up to the Netherlands.

SMITH: Paul says ships like this - filled with oil, looking for a buyer - the stuff inside the ship, the oil, is called distressed cargo. Now, maybe the owners of the oil had a deal with a refinery somewhere and that deal fell through, or maybe they had to leave port before they could find a buyer. Those are legitimate reasons you might be carrying distressed cargo.

SIMON: Or maybe it really is stolen because these offers happen all the time, always from Nigeria.

OLUKINGU: Seven ships or five, six ships per week. So, you know, so many buyers are failing to perform - it looks a little odd. It could be a way to mask stolen oil or, you know, dubious sources of the crude.

SMITH: Everyone pretty much knows that some of the documents are forged. And stolen oil can be really in the same ship as perfectly legal oil.

OLUKINGU: 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: The truth is that the farther this oil gets from Nigeria, the harder it is to figure out what's legal and what's not. There's no international oil cop chasing these criminals down. I've heard from some sources that stolen Nigerian crude oil ends up in refineries in India, in the Balkans, in Italy.

SMITH: And by the time the stolen oil gets to a refinery in Genoa, let's say, gets turned into gasoline, no one really cares. If you've been on vacation in Genoa, if you got a rental car, you could have been fueling up with gas from stolen Nigerian crude - no way to tell.

SIMON: It's basically Nigeria's responsibility to find out who is stealing their oil, and they've made it very difficult for themselves. Most countries sell directly to refineries. But Nigeria - you have this system where the government has authorized all these different players to sell the oil for them, so it's very hard to tell who has government approval and who doesn't.

SMITH: You know, as you told this story to me, Julia, there was one question that kept running through my mind. So when we were talking to Alexandra Gillies - she's the woman who was describing the pipelines in the Niger Delta - I asked her.

Does Nigeria not care?

GILLIES: I mean, this is the big question, is if I was the president of Nigeria and there was a problem that was costing me four, five, $6 billion dollars a year and I was, you know, a poor, poor country where that money's sorely needed, I would fix that problem. Yet year after year, the problem remains in place. That tells us how politically valuable this oil theft is. You could beef up your security systems if you wanted to, and you're choosing not to. Especially in a place like Nigeria - this is not a weak government. This is not a broke government. This is a government that knows how to run an oil sector and chooses to run it in a messy way anyway.

SMITH: To use an analogy, if a bank gets robbed once, you blame the robber. You go after him. But if a bank gets robbed every single day, you have to start looking at the people who run the bank. You have to start looking at the people whose supposed job is to guard all that wealth.


CLAPTONE: (Singing) No eyes, no eyes on me.

SMITH: We always like to hear what you think of PLANET MONEY and today's show, so email us, please - planetmoney@npr.org. Or you can tell us what you think on Twitter, @planetmoney.

SIMON: There were a lot of people who helped me figure this out. I want to thank Ben Amunwa (ph), Patrick Delecol (ph), Christina Katsouris, Uwo Nuokegi (ph), Trevor Houser, Cyril Odu, Afolabi Oladele, Uwa Oso Obo (ph), Jessie Obadia (ph), Michael Watts and Blame Eque (ph) in Togo.

SMITH: And here in New York, We wanted to thank Aparna Alure (ph), Thea Bennon (ph) and our producer today, Jess Jiang. Now that you are finished listening to PLANET MONEY, may I recommend that you go on over to iTunes and check out Ask Me Another? It's NPR's puzzle and game show. You will be delighted. I am Robert Smith.

SIMON: And I am Julia Simon. Thanks for listening.

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