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Renewed Niger Delta Violence Reignites Fears For Nigeria Oil Production

Posted: Mar 2, 2016 at 10:32 am   /   by   /   comments (0)

Financial Times

Oil-rich Niger Delta is seeing a renewed wave of attacks on the energy industry that threatens to disrupt production in Africa’s top crude exporter and whose increasing sophistication is raising concern among diplomats and security experts.

Attacks on Nigeria’s oil facilities in recent months are on par with the most sophisticated sabotage seen during the destructive 2006-2009 insurgency, according to observers.

Royal Dutch Shell declared “force majeure” — a clause in contracts that frees parties from obligations in the case of an event beyond their control — on February 21, a week after a bomb attack on an underwater pipeline. The assault suggested a degree of technical capability among saboteurs not seen in years, say Nigeria-based security experts and diplomats.

The company, the biggest oil producer in the country, said it was working to contain the subsequent spill on its subsea line, and crude flows to Shell’s export terminal could be halted until April, Reuters reported last week.

It is unclear who was behind the attack. But it comes hard on the heels of two pipeline bombings in January just days after a former militant leader was charged by the federal anti-corruption agency with money laundering and collusion with the national maritime authority to siphon off N34 billion ($170.73 million) in state funds.

The powerful ex-commander, known as Tompolo, saw his fortunes — and wealth — rise under the administration of former President Goodluck Jonathan as he was granted a slew of lucrative contracts to guard pipelines. He has denied the charges against him.

President Muhammadu Buhari’s fight against corruption has rattled powerful interests in Africa’s biggest economy since the former military ruler took office last May. The president has pledged to end the widespread fraud that has bled the resource-rich nation dry and left its state coffers barren despite years of high oil prices.

Key figures from Mr Jonathan’s administration are under investigation at home and abroad on counts mainly related to diversion of state oil revenues.

Violence in the Niger Delta could have severe economic consequences. Oil is Nigeria’s chief source of export revenue, and the collapse in global prices has seen economic growth fall to its lowest level in a decade.

The downturn could pile pressure on a Niger Delta population already disappointed that Mr Jonathan, who hails from the region, did not deliver long-promised development and which fears Mr Buhari, a Muslim from the north, will not prioritise their needs.

The Buhari administration is making overtures. The government this year plans to train thousands of young men for work to encourage them to stop stealing oil and attacking pipelines, and has budgeted funds to continue an amnesty programme that is meant to channel payments to some 30,000 militants.

However, “the growing climate of lawlessness is probably also a reflection of the widespread sentiment that the Buhari administration’s policies are anti-Niger Delta”, says Nnamdi Obasi, Nigeria researcher for the Brussels-based International Crisis Group. “This climate of protest may be providing a convenient cover for criminals masquerading as a new generation of militants.”

The technical capacity of militants to launch complex attacks should not be underestimated, according to a person in a western security company who spoke on condition of anonymity. During the former insurgency, which cut Nigeria’s production of 2 million barrels a day in half, militants occasionally detonated explosives on underwater lines, but such operations were rare. Most of the attacks involved more exposed targets, such as oil well heads and above-ground pipes.

No matter who is behind the attacks, vandalising oil infrastructure is unlikely to serve the aims of the population, warns Jonjon Oyeinfie Emmanuel, a former leader of the unarmed but militant Ijaw Youth Council who now runs a private security firm.

“People need to not be stupid and create problems in our area which will cause more militarisation”, he says. “The Niger Delta is like a conquered area.”

But the possibility of revenue drying up for former militants made rich under the previous administration has caused “pushback over pressure on kingpins in the region”, says Chris Newsom of Stakeholder Democracy Network, a Niger Delta-based NGO.

“In the past, the scenarios have been fairly simple,” he says. “If there are not responses or engagement from government, it’s a matter of time before there is an escalation of incidents intended to bring attention around by force.”