Our Creeks-to-Sea research project identified significant and consistent discrepancies between Nigerian government figures on oil exports and refined product import volumes, and those provided by independent sources. Official figures for 2018 appear to over report import volumes up to 41%, and under report export volumes by 3%, compared to independent sources. This is unlikely to be the full picture, but the finding strongly implies that there continues to be major fraud in its fuel subsidy programme, and significant crude oil theft from export terminals. This costs the Nigerian government billions of Naira in revenue, ultimately defrauding Nigerians of funds which should be supporting services and other public goods.

On-the-ground investigations and increasing regulatory transparency remain vital in addressing these risks. However, we identified new statistical and remote sensing methods of monitoring oil movements to help track these risks, using commercial and independent sources of data, which could support the Nigerian government and others to strengthen monitoring of imports and exports and identify suspicious behaviour.

This research compares differences in the standards of, and emissions from, official fuels in licensed filling stations, and unofficial fuels produced by artisanal oil refineries across Bayelsa and Rivers states.

The analysis aims to improve upon current levels of evidence and understanding around some of the impacts of consuming these fuels on air pollution, health, and damage to engines and generators. Field researchers collected 91 unofficial and official fuel samples to establish the quality of fuel produced by artisanal refiners, in comparison to fuel available at filling stations and international standards. Samples of official and unofficial fuel were obtained in Bayelsa and Rivers states, and control samples of official fuels were collected in Lagos.

The findings of this research are cause for serious concern, particularly the very high sulphur concentrations across unofficial and official fuel supplies in the Niger Delta. The samples analysed suggest a low standard of fuel is on offer in the Niger Delta, likely leading to high levels of emissions, serious health impacts, and increased vehicle and generator maintenance costs to consumers. Those handling products in artisanal refineries are also potentially exposed to serious health risks.

This report calls for an alternative approach to tackle artisanal oil refining in the Niger Delta, based on an analysis of how the improvised artisanal oil refining value chain has adapted and changed in Bayelsa and Rivers states over a five year period.

Our analysis indicates that all levels of the artisanal oil refining value chain are better organised and more profitable than five years ago. Data simulations indicate there are more refineries in operation, that are capable of producing larger volumes of fuel.

The industry is characterised by severe threats to stabilisation, which will continue to escalate if the drivers of the industry are not addressed effectively. These include poor working conditions, environmental pollution, health hazards, revenue loss to the government, increased risk of armed confrontation between associates, and raids on communities by security agencies. These problems are layered upon, and a result of, the environmental destruction, economic underdevelopment, and insecurity which has been caused by the actions and poor governance of the oil industry in the region.

Pipeline vandalism cost the Nigerian Government, oil-companies and communities an estimated $14bn dollars in 2014.

The failure of the Nigerian state to provide basic public services and security in the Niger Delta has resulted in a significant breakdown of the social contract. In the void that remains, international and national oil companies are often seen as a Government proxy, spending millions of dollars in their operating locations through various formal and informal Corporate Social Responsibility (CSR) and security instruments. However, these efforts are not perceived to have the communities' interests at heart, preferring to secure a short-term license to operate as opposed to a long-term legacy in the region. In addition, the "quick and easy cash" approach by oil-companies in response to threats by vandals has created an implicit incentive to "crack pipes", earn money and survive.

Individuals within operating subsidiaries of International Oil Companies (IOCs) have long stood accused of structural and organised corruption within their operations in Nigeria. However, the nature of such practices is opaque with current knowledge based on informal reporting as opposed to a strong understanding of facts, processes and individuals involved.

This issue is caused by people, not process. Individuals within IOC's are able to abuse, manipulate and defraud internal company policies, procedures and procurement processes to divert contracts through loyalty networks for personal gain. These individuals have operated with impunity and consequently these methods have become accepted and entrenched within the oil-service sector in Nigeria.

An estimated 150,000 barrels of crude oil are stolen every day in Nigeria. The vast majority of this is sold internationally, but approximately 25% stays in the Niger Delta for refining and consumption. Illegal oil refining in the region comes with steep economic and social costs. Unless the problem is better understood and key drivers of the illegal economy are analyzed, the trade could come to undermine the stability of Nigeria's legal oil sector.

The dangers notwithstanding, organized theft of crude oil and the illegal refining business it feeds also support the families, small businesses and social aspirations of many Niger Delta communities. Interviewees for this report described illegal oil refining as an entrepreneurial, free market response to local economic dysfunction, socioeconomic pressures, the Niger Delta's chronic fuel shortages and government's failure to deliver basic public services.