Activities of Niger Delta militants take a grave toll on the Nigerian economy and continues to claim human lives
By Oluokun Ayorinde/Abuja
If President Umar Yar’Adua’s recent announcement of his readiness to grant amnesty to militants who are ready to give up their violent activities was aimed at restoring peace in the troubled Niger Delta region, then he may have failed going by events of the past two weeks. For one, it was a bloodbath when the militants engaged men of the Joint Task Force in yet another battle for control of the creeks in the thick of the Easter celebrations. An attack by men of the JTF and a counter-attack by the militants resulted in the death of scores in Bayelsa State. “The militants led by their leader, Ogunbos, while coming from their hide-out in the creeks, were closing in on our location. Unknown to the armed youths, the JTF troops, following a tip-off, were battle-ready and in the process of engaging the security outfit, four of the militants’ speedboats were sunk with all the occupants,” spokesman of JTF, Colonel Rabe Abubakar said of the Sunday 12 April confrontation, which he said left about 20 militants and two naval officers dead. The militants were reportedly returning from their hide-out in Okilo creek, Igbomotoru, Bayelsa State.
According to Abubakar, the militant leader, Ogunbos, was also responsible for recent attacks on and destruction of houseboats belonging to Daewoo Nigeria Limited stationed at Igbomotoru area of Southern Ijaw. Daewoo was a contractor to Italian oil giant, AGIP Nigeria Limited. JTF had promised to track down the militants involved in the attack on the Daewoo facility and bring them to justice to serve as deterrent to others. But in what seemed an indication of the boldness with which they now conduct their business, the militants came back less than 12 hours later to avenge the killing of their men.
The retaliatory attack, which reportedly took place in the early hours of last Monday at a facility owned by Shell in Nembe, was reportedly led by Kitikata and Fara Dagogo, two popular militant group leaders in the region. One source said the militants who came in over 15 speedboats, surrounded the military outpost and opened fire. Two naval officers lost their lives in the attack while one other is missing, according to military authorities.
However, the Movement for the Emancipation of the Niger Delta, MEND, which claimed it was not involved in the attacks, said three naval personnel were killed and four abducted while two Navy gunboats were seized by the militants. The militants allegedly stole four speedboats belonging to Shell during the attack.
“It was a retaliatory attack on the earlier sinking of four militants’ speedboats, which led to their occupants being drowned. The attack was jointly carried out by Kitikata and Fara Dagogo. It was, however, foiled. But in the process of defending the facility, one naval rating was killed, two sustained minor injuries and four Shell speedboats were carted away by the miscreants. However, the JTF has launched a manhunt for perpetrators of this attack and in just a matter of time, we would get them,” Abubakar said in a statement.
Such promise of imminent waterloo has failed to be a deterrent even as activities of militants such as kidnapping, illegal bunkering and attacks on oil facilities have continued to take their toll on the oil industry from which Nigeria earns about 90 per cent of its foreign revenue.
Activities of the militants have not only resulted in divestment from the Nigerian oil industry, it has also scared off new investors. Among companies operating in Nigeria, Shell Petroleum Development Company, SPDC, unarguably the biggest operator in the upstream sector of the Nigeria oil industry, has borne the biggest brunt of militant activities. Some weeks ago, the invasion of the company’s production facilities at Nembe Creek flow station in Bayelsa State led to a production shut-in of 180,000 barrels per day. The militants were said to have invaded the multi-billion dollar flow station to demand for a monthly payment of N3 million from the oil giant, accusing it of “being insensitive to the plight of people of the area by refusing to implement agreements reached with them in various Memorandum of Understanding signed with the people”, in a letter they took to the facility.
Though they were repelled by security men guarding the facility, it was gathered that the management of the oil company had to close down the flow station because of the unfavourable security situation. Intermittent attacks on SPDC facilities over the years have resulted in a decline of its production level from about one million barrels per day of crude oil about six years ago to less than 500,000 per day as at some weeks ago.
The militants took stakeholders in the oil industry, the government and the Nigerian security forces by surprise not too long ago when they launched attacks on Bonga Floating, Production, Storage and Offloading, FPSO, facility located about 120 kilometres off Nigerian shores. The oil field has a daily production capacity of 200,000 barrels of oil and 150 million standard cubic feet of gas. Such facilities located hundreds of kilometres offshore were before then thought to be safe from militants’ attacks and as a result, many operators in the upstream sector had devoted attention to them.
But about 20 militants who claimed to be members of MEND took Nigerian security forces by surprise when they launched an attack on the oil field on 19 June 2008 in three speedboats. “Shell Nigeria Exploration and Production Company’s (SNEPCo’s) Bonga field was attacked this morning by unknown gunmen. We can account for all personnel in Bonga field, and have no report about people being taken hostage from our operations. Three people who were roughhandled have been treated for light injuries. Production from Bonga field has stopped. We are carrying out detailed inspection of the Bonga FPSO and other key installations to ascertain what really happened. It is too early to say when production will resume. SNEPCo is doing everything possible to ensure the safety of personnel on board, and our thoughts are with staff and contractors on what must have been a traumatic experience,” a spokesman of Shell Development Company of Nigeria, Mr. Precious Okolobo said while confirming the stoppage of production of oil from the facility following the attack.
MEND said it deliberately chose to attack Bonga to let the Nigerian security forces know that it has the capacity to strike wherever it wanted. “The location of yesterday’s attack was deliberately chosen to remove any notion that offshore oil exploration is far from our reach,” the group said in a statement sent to journalists a few hours after the attack. The dreaded militia group also warned that all expatriate staff working on the facility and within Niger Delta should be evacuated to avoid casualties, saying it had decided to prove to “the Federal Government that it is not happy with the present situation in the region”.
Shell declared a force majeure for April, May June and July deliveries following persistent attacks on its facilities carried out by MEND and other militant groups in the first half of 2008. The attacks resulted in loss of 200,000 barrels per day, which is about 10 per cent of Nigeria’s then daily production of about 2 million bpd.
Few months ago, a militant group led by Ateke Tom also accused Shell and other oil operators, including Agip, the local subsidiary of Italian oil company Eni, and the Nigeria Liquefied Natural Gas company of helping the Nigerian military to carry out attacks on its camps in Rivers State. Ateke, who had been under attack by the government of Rivers State, consequently asked the oil companies to vacate Niger Delta or risk attacks from his group. This magazine gathered that following the threat many oil companies evacuated some of their workers from the region.
Mercer, the human-resources unit of Marsh & McLennan, a New York-based company, ranked Port Harcourt with Baghdad, Yemen’s capital of Sana’a and Khartoum in Sudan , as the world’s most dangerous cities as a result of the activities of militants. Such rankings have driven up the cost of hiring expatriates to work in the Nigerian oil industry. Some foreign companies have also had to hire foreign security firms to protect their workers and installations from attacks. The additional cost in terms of hiring of workers and security, it was gathered, has driven up the cost of oil production in Nigeria compared to other countries.
Arild Nodland, the Managing Director of Bergen Risk Solutions, a consulting firm based in Norway, put the number of kidnapped workers in the oil industry in the Niger Delta in 2008 at 52 in 25 incidents. This is down from a record 167 abductions recorded the previous year, he said. The Bergen Risk Solutions boss attributed the reduction in kidnapping cases to improved security put in place by the companies, government and the relocation of expatriates from the oil city of Port Harcourt, which for a time appeared to be the hub of kidnapping activities. But while the incidence of kidnapping may have reduced in 2008, attacks targeting oil installations rose by 31 per cent to 92, Bergen said.
Militants’ activities and crude oil theft have since 2006 led to a shut-in of more than 500,000 barrels a day of production. Nigeria’s current production fluctuates between 1.6 and 2.2 million barrels a day, down from between 2.5 million and 2.6 million barrels of oil per day before the escalation of activities of the militants. “The activities of the militants have been sustained by trade in oil stolen from vandalised oil export facilities. They not only use the stolen oil to sustain themselves, they also use the proceed from what is generally referred to as illegal bunkering to acquire sophisticated arms with which they have been able to fight the military to a standstill, so to say,” said a source.
Indeed, President Yar’Adua had at the meeting of Group of Eight most developed nations, in Hokkaido, Japan, last year drawn attention to the role of stolen crude oil in helping to sustain militant activities in the Niger Delta. Speaking at a meeting with Japanese Prime Minister, Yasuo Fukuda and the President of the World Bank, Mr. Robert B. Zoellick, President Yar’Adua said stolen crude oil ought to be treated globally in the same manner as stolen diamonds.
The President also intimated them of the intention of his administration to present a proposal to the United Nations on the necessity of moving against international trade in stolen crude oil. “The other aspect of the Niger Delta challenge is the criminal aspect, those who use the cover of militancy to steal our crude oil and engage in all forms of violence. We know how arms are brought in to support this criminality but we will tackle the menace together with the challenge of development,” Yar’Adua told his hosts. He therefore put forward a proposal that “stolen crude should be treated like stolen diamonds because they both generate blood money. Like what is now known as ‘blood diamonds’, stolen crude also aids corruption and violence and can provoke war”.
Not many Nigerians will find cheery the revelation that rising violence in the Niger Delta resulted in revenue loss of at least $23.7 billion to Nigeria in the first half of 2008 alone. The Presidential Committee noted in its report that attacks on installations in the region resulted in shut downs and spillages, with consequent losses in revenue estimated at about $20.7 billion. According to Dow Jones newswires: “This amount (of $20.7 billion) is exclusive of another estimated $3 billion lost to oil bunkering (theft) over the first seven months of this (last) year alone.”
The report, which was based on an average of 700,000 barrels a day lost during the months from January to September multiplied by each month’s average Nigerian crude prices, also added that “there are unaccounted costs in human misery, with about 1,000 persons killed within the same period and another 300 taken as hostages.”
Mohammed Barkindo, the Group Managing Director of NNPC, at a recent meeting between the Senate committee on Petroleum (upstream) and stakeholders in the oil and gas industry said the country has recorded a shortfall in oil revenue from an average $2.2 billion monthly recorded in 2008 to about $1 billion in January 2009, a 50 per cent reduction. He listed factors responsible for the drop to include fall in the price of crude oil in the international market, reduction in investment in oil and gas production, insecurity in the oil-producing Niger Delta and OPEC quotas. The NNPC GMD added that the decline in daily crude production from two million bpd in 2008 to the current level of 1.6 million bpd is taking a heavy toll on the economy.
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