Nigerian politicians profit from oil theft-WikiLeaks

* Oil bunkering costs huge portion of Nigerian production

* Nigeria produces around 2 million barrels of oil per day

LAGOS, Sept 7 (Reuters) - Nigeria's political elite and soldiers have profited from large-scale oil theft in the Niger Delta that may cost the country up to a tenth of its production, according to a leaked U.S. diplomatic cable released by WikiLeaks at the end of last week.

Nigeria is the world's eighth biggest exporter of crude oil but thieves take a sizeable proportion of its output by drilling into pipelines or sometimes hijacking barges loaded with oil, a type of theft known locally as "bunkering".

"Oil theft, widely referred to as 'illegal bunkering' in Nigeria, represents significant economic activity with serious ramifications for Nigeria's economy, security, democracy and environment," says the Nov. 2009 cable sent by then-U.S. Consul-General Donna M. Blair, released by the anti-secrecy group.

"No other, major oil-producing country ... loses as much revenue from illicit oil bunkering as Nigeria, largely because the political elite, militants, and communities profit from such operations," Blair added.

An amnesty for militants in the Niger Delta in 2009 brought a degree of security and has helped cut attacks on pipelines, enabling Nigeria to restore production to around 2 million barrels of oil a day (bpd).

But oil bunkering is believed to be still widespread, and little is known of the shadowy networks that steal, store, ship and market the oil.

"Nigerian officials repeatedly request U.S. assistance to prevent bunkering. The reality, however, is that most oil bunkering is not a global phenomenon readily susceptible to international deterrence, but a largely Nigerian development that requires domestic resolution," the cable said.