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Home Uncategorized Trouble looms in Nigeria’s oil sector

Trouble looms in Nigeria’s oil sector

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Every attack on an oil pipeline leaves Felix Timileami feeling as if he’s on top of the world. The 39-year-old, who belongs to a recently formed — and as of yet unnamed — militant group, has taken part in raids on a number of oil facilities in the Niger Delta. Last month, they hit one operated by Royal Dutch Shell.

“It’s the only means to vent our anger and to draw the world’s attention,” says Timileami, who hails from the Delta city of Warri.

For six decades, the people of this swampy southern region have been the sore losers in Nigeria’s scandalous game of crony capitalism. Oil worth billions of dollars is pumped directly through communities here, but residents see almost none of it. For most of the 2000s, an insurgency fueled by bitter resentment claimed thousands of lives and, at its height, cut Nigeria’s oil production in half. Now, after a brief respite, it is beginning to re-emerge.

Seven years after an amnesty agreement persuaded most militants to put down their weapons in exchange for monthly stipends — and in some cases, contracts to guard the same pipelines they used to bomb — the Niger Delta, a region of more than 20 million people, is suddenly sliding back into chaos. This month, a militant group calling itself the Niger Delta Avengers has already claimed three separate attacks on oil installations and promised to cut the country’s oil output to zero. The Ijaw Youth Council, an influential grassroots organization that has its roots in the armed struggle of the 2000s and advocates for local control of natural resources, said last week that the security situation is “rapidly deteriorating and getting out of control.”

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At issue is President Muhammadu Buhari’s perceived abandonment of the region. Already viewed suspiciously in the Delta because he is a Muslim from the north, Buhari has courted trouble by slashing funds for the amnesty programme and revoking some of the security contracts. When he abruptly called off his first planned presidential visit to the region last week, people saw it as proof that he does not care about Christians in the south of the country.

“The body language of the president does not favor us at all,” Eric Omare, a spokesperson for the Ijaw Youth Council, told Foreign Policy. “But we in the Niger Delta have oil and gas pipelines in our backyards. So when we are angry, we can attack the pipelines and that will force the federal government to pay attention because we are affecting the national economy.”

The Niger Delta produces 90 percent of the country’s commercial crude and accounts for roughly 70 percent of government revenue. The total dollar amounts are staggering. According to OPEC, Nigeria made $77 billion from oil exports in 2014 — and that was a low year. The U.S. Department of Energy says Nigeria’s oil export earnings hit $99 billion in 2011. (The figures were $94 billion and $84 billion for 2012 and 2013, respectively.)

In the communities of the Niger Delta, there is a feeling that these mind-boggling profits belong to the people here. Oil money, people feel, is a birthright. They say God blessed them with oil and they deserve to reap its wealth.

Instead, they have borne the costs of environmental degradation while the benefits have largely passed them by. Much of the wealth, which is supposed to flow back to the states from the federal government, is simply siphoned off. A recent federal government audit showed that the state-owned Nigerian National Petroleum Corp. (NNPC) failed to pay $16 billion in revenue that it owed to the state treasury in 2014 alone. (NNPC officials disputed that figure, claiming it was closer to $1 billion.) The revelation came after then-Central Bank Gov. Lamido Sanusi accused the NNPC of failing to pay $20 billion to the federal government between January 2012 and July 2013. (Sanusi was immediately suspended after making the accusation and eventually forced out of his job.)

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The discovery of oil in 1956 forever changed the face of the Niger Delta. Located in the southernmost part of Nigeria, it is the largest mangrove swamp in Africa and the third largest in the world. Its dense forest and complex labyrinth of creeks and waterways breathes life into over 339 plant species and more than 100 species of birds and fish. Tall palm trees with thick branches stretch upward before bending to touch the water below. The natural wonder stretches for miles and miles, but today it’s only a fragment of what it once was.

A burgeoning population coupled with rapid urbanization has swallowed much of the mangrove, which is being reclaimed to create more habitable land. Meanwhile, multinational oil companies have dredged the swamp to build pipelines, disturbing the delicate saltwater and freshwater balance, eroding banks, and depriving the roots of plants and trees of vital nutrients. Oil spills have clogged the soil and contaminated just about every community in the Delta, contributing to myriad health problems, including cancer.

The list of environmental mishaps reads like a criminal record. Royal Dutch Shell, one of many multinational oil companies pumping crude from the troubled region, has admitted to 1,693 oil spills since 2007. (Advocacy groups like Amnesty International claim the figure is much higher.) In just one of those spills, in 2008, 100,000 barrels seeped into the Ogoni Land region of the Delta. Thousands of hectares of mangroves were damaged, and 69,000 people were affected. Four months later, Shell was responsible for another spill that further devastated Ogoni Land.

For the Niger Delta communities that rely on farming and fishing, the environmental damage has been catastrophic. All told, the United Nations says it could take 25 to 30 years and at least $1 billion to clean up pollution from more than 50 years of oil operations here. But the government has done little to help the region bounce back.

Countless studies reveal that access to water, electricity, health facilities, jobs, and education remain limited. A 2006 report from the United Nations Development Programme highlights “administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict.” The report goes on to call the Delta one of the world’s starkest examples of the “resource curse.”

This is why Timileami and his fellow militants are destroying pipelines again. The son of a retired soldier and a petty trader, Timileami participated in the last insurgency here in the mid-2000s. “We wanted to make Nigeria fall to its knees,” he says.

Hundreds of young people in the Niger Delta shared the same ambition. For a decade ending in 2009, they attacked oil infrastructure and kidnapped oil company workers for ransom. Nigeria’s crude oil output dropped by nearly 50 percent and the militants, collectively known as the Movement for the Emancipation of the Niger Delta (MEND), brought the nation’s economy to a virtual standstill. It was during this period that the Ijaw Youth Council was founded as a civilian counterpart to MEND, documenting local grievances and advocating for greater autonomy. All told, thousands of people were agitating for change in the Niger Delta, some through nonviolent protest, some through militancy, and some by aiding militants.

Teenage girls cooked for MEND fighters, cleaned their guns, and served as lookouts. Whole communities took part in the struggle against the Nigerian government, which ended only after the Ijaw Youth Council helped broker an amnesty agreement that covered some 30,000 Niger Deltans. These former militants and their family members began collecting monthly stipends of 65,000 naira — then, roughly $400 — from the government. Some received scholarships for foreign study or vocational training. Others landed lucrative contracts to secure oil installations or target illegal refineries, some reportedly worth as much as $100 million. Suddenly, it paid to be a former militant, and warlords became superstars in the Niger Delta. One of them, still known by the name he used during his MEND days, Pastor Reuben, lives in a palatial mansion in Rivers State with gold-plated furniture. Another, Ateke Tom, bought two lions that he keeps in a house “far away” because he’s “afraid of them,” he says.

But the high life is winding down for the former militants. A frugal disciplinarian, Buhari slashed the budget for the amnesty program by about 70 percent and yanked some of the security contracts. He has also scrapped a plan to build a new university in the Niger Delta. As a result, resentment is building in the region. Some people say Buhari is retaliating against communities that voted overwhelmingly for his opponent in the 2015 election.

Timileami is one of those people. He voted for former President Goodluck Jonathan, a native son of the Delta, and sees Buhari’s presidency as a threat to his livelihood. Before the election, he was dismantling illegal refineries as part of a contract offered through the amnesty program. But then his monthly government stipend became irregular; he soon went back to the way of the gun. He says he will continue hitting pipelines until Buhari “comes to his senses.”

The recent wave of attacks has contributed to a gradual reduction in oil output — from 2.2 million barrels per day at the beginning of the year to between 1.5 million and 1.6 million per day — that has cost Nigeria its claim as Africa’s largest oil producer. (It has fallen behind Angola.) A major port has been closed because of the violence, along with two refineries.

Buhari has responded by announcing a deployment of troops to the Delta. In a May 29 address marking the end of his first year in office, he finally offered to “engage” leaders in the region and pledged to restructure the amnesty program. But he also implied that his military would continue to use force against those targeting oil installations. “If the militants and vandals are testing our resolve, they are much mistaken,” he said. “We shall apprehend the perpetrators and their sponsors and bring them to justice.”

.Yahoo

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