Last year, Nigeria's President Goodluck Jonathan claimed that the country was losing an average of 350,000 barrels of oil per day through theft. As the figure suggests, this is a highly organised affair and it's now thought that illegally sourced crude represents the second most lucrative criminal activity behind the global trade in narcotics.
Siphoning off this amount of crude obviously requires more than a determined local with a bucket and a hosepipe. So there has long been whispers that industry insiders, and perhaps even elements within Nigeria's security forces, must have been complicit in an operation of this scale. We'll probably never know the extent to which officials were involved in this trade - if, at all - but the seeming inability of authorities to deal with the problem has exhausted the patience of western oil majors. And in doing so, has opened up opportunities in the Niger Delta for a number of home-grown operators.
One such company - SEPLAT Petroleum Development Company - has announced that it wants to raise at least $500m (£299m) through offerings on the London and Lagos stock exchanges, which would imply a market capitalisation of about $2bn. SEPLAT will use the proceeds of the offering to pay down borrowings (net debt is $141m, or 22 per cent of shareholder funds), with the remainder utilised to secure assets that are being hived off by the likes of Royal Dutch Shell (RDSB), Chevron and Total SA. Indeed, the Anglo-Dutch major has pocketed over $1.8bn from asset sales in Nigeria since 2010. And it has opened up offers for the theft-ravaged Nembe Creek oil pipeline, in addition to a 30 per cent stake in four oil blocks in the Niger Delta. SEPLAT would obviously be well placed in any bidding process given that it already boasts daily production of 60,000 barrels per day from its interest in three blocks acquired from Shell, Total and Eni in 2010.