Illicit oil operations in Nigeria are rampant. All told, the Niger Delta currently loses an estimated one-fifth of its oil revenue to theft and virtually every village in the area is involved. Royal Dutch Shell (NYSE: RDS.A), the biggest player in the region, claims a loss of 7% of its two million barrels over syndicated theft.
Given such pervasiveness, the country has little hope of ending corruption, but it’s making efforts in that direction nevertheless. The army is carrying out raids to stamp out the illicit aspect of the trade and a new oil law that increases trading transparency is in the pipeline.
However, many fear the proposed transparency of the new law doesn’t go nearly far enough. The government will still be allowed to leave payments and extraction quantities undeclared, keeping the door open wide for continued corrupt transactions and black market operations.