WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Alt Text

Natural Gas Prices At Highest Level In Two Years

Natural gas has posted significant…

Alt Text

How Russia Outsmarted OPEC

OPEC’s historic output deal stands…

Politics, Gangs, and Big Oil Spell Disaster in the Niger Delta

Renewed violence, oil bunkering and piracy has apparently cost Nigeria over $4.3 billion over the past two years, while violence, a disastrous environmental problem, corruption and a level of state failure hard to match threaten the country’s economy and security. 

According to the Nigerian Tribune, the government loses around 400,000 metric tonnes of crude oil daily due to oil theft, and that police officers are taking massive payoffs to assist in the bunkering schemes, which are increasingly sophisticated. The newspaper estimated that there are now about 80 illegal refining hamlets across the Niger Delta. For oil companies, the bulk of the security challenge is to onshore oil fields, primarily operated by Shell and Chevron. While over half of production has been moved off shore for protection, the rising threat of piracy in the Gulf of Guinea makes security on this level tenuous as well.

The 2009 ceasefire and amnesty deal quieted the main oil militant group, the Movement for the Emancipation of the Niger Delta (MEND), but incidents in 2011 and 2012 indicate that the group is back in business. This is in part because the government has allowed itself to become distracted by the Boko Haram threat in the Muslim north, giving MEND time to rethink and regroup. In February this year, a spokesman for MEND claimed that the group was responsible for a number of attacks earlier this year. In a statement, the alleged MEND spokesman specifically stressed that the amnesty deal was bogus. “Rather than address series issues facing the nation and its citizens, [President] Goodluck Jonathan squanders public funds on tribalistic sycophants and thugs calling themselves ex-militants.”

MEND certainly has a point, and to that end it is important to understand the Niger Delta politics that helped catapult Goodluck Jonathan into presidential office. To wit, Jonathan, an ethnic Ijaw from the Niger Delta’s Baylesa state, had help from violent gangs in the Niger Delta to ensure his victory. This directly affected the situation on the ground in the Niger Delta, helped spur an eventual return to violence and undermined the amnesty deal put in place by his predecessor. Baylesa state is currently a hotspot of gang violence and the site of a number of attacks in recent months. Baylesa is the president’s political base, and here politics and gang violence mixes beyond the comprehension of the outside observer.   

In the meantime, hoards of “amnestied” militants and gang members are languishing out in massive impoverished camps managed by gang leaders on the government payroll, where they are expected to sit tight and wait for gainful employment and other benefits in return for not attacking oil installations. The frustration said to be brewing in these camps is palpable, as the promised jobs are not forthcoming, nor is the promised development for the region.

Beyond this, the “benefits” that were promised along with the amnesty deal, and cash handouts by the government to keep key ex-militants from re-arming are creating a situation in which volatile youth and militants not included in the amnesty deal are rising up to take over where their amnestied brethren left off, for the most part.

Nigeria’s Daily Trust claims that the government underestimated the capabilities of and ignored the signs of unrest among militants who were not privy to the government’s amnesty “largesse”. According to the daily, those “enlisted” in the amnesty program collect sizable paychecks from the government and “many of them are now millionaires”, “depending on their closeness to ex-militant leaders and politicians across the Niger Delta region.”

Environment Sidelined

The release of a massive and damning UNEP report in August 2011 led to the belief that something was finally going to be done to clean up the Niger Delta, where the land and rivers are indelibly polluted thanks to decades of unchecked oil extraction. Farming and fishing livelihoods have been decimated, standards of living are appalling, health conditions horrifying and human rights abuses vast. 

The UNEP requested an initial $1 billion (to come from oil companies) to clean up the area – a task it believes will take around 25-30 years. But this sum is only to clean up Ogoniland, a small part of the Niger Delta. It would take around $100 billion to clean up the entire Niger Delta.

The UNEP report was based on a 3-year investigation and focusing largely on Ogoniland, was funded by Shell and commissioned by the Nigerian government, but appears to be objective. The report’s key findings were that Shell and other oil firms systematically contaminated a 1,000 sq km area of the Niger Delta’s Ogoniland.

It cites heavy contamination of land and underground water courses, even up to 40 years after an oil spill. It also notes dangerous concentrations of benzene and other pollutants in drinking water, and hydrocarbon levels more than 1,000 times the norm. Soil contamination is over five meters deep, and allegedly “cleaned” spill sites are still highly contaminated. Oil companies operating in the area dumped contaminated soil in unlined pits.

Ogoni, in the Rivers State, was the stage for peaceful protests in the 1990s, which culminated in the execution of nine members of the Movement for the Survival of Ogoni Peoples (MOSOP). While oil drilling ceased in 1993, spills have continued from aging pipelines, oil bunkering, hastily abandoned and unsecure oil infrastructure.

Oil companies have largely bought out the Nigerian government to turn the other way to environmental and human rights abuses. Graft and corruption are unbridled, and those who will not be bought are considered enemies of the state.

So where does that leave the clean-up of the Niger Delta. Nowhere, really. Shell and the Nigerian government are apparently in “talks” about how to proceed. Shell’s response to the UNEP report was to lay all the blame for the environmental catastrophe at the hands of Niger Delta gangs. “The majority of the oil spills in Nigeria are caused by sabotage, theft and illegal refining. We urge the Nigerian authorities to do all they can to curb such activity, and we will continue working with our partners in Nigeria, including the government, to solve these problems and on the next steps to help clean up Ogoniland."

In the meantime, private contractors are lining up left and right to get in on the gig. Intelligence sources close to these dealings tell OIlprice.com that Shell is fighting hard to keep control of the clean-up process. The clean-up cannot proceed without the requisite security and stability to allow it to move forward. Contractors attempting to get in on this largesse by offering more of a grass-roots strategy that would turn enemies into stakeholders for a more lasting peace and stability are sidelined. The preferred strategy is a military sweep of the region – one that pays close attention to the president’s alliances back home in the Niger Delta.

Nothing with move forward without the typical gangland-style politics that informs everything that happens in the Niger Delta. Much like the amnesty for “oil militants” went down, so too will the pieces be put into place for an eventual “clean-up”.

There will be no progress under the current administration. The next elections in Nigeria, scheduled for 2015, may offer up some change. But this will depend on tribal affiliations. If another southern Christian is elected to office, Niger Delta strategy will be shaped by whatever political-gang-tribal relations he has in the region.

By. Jen Alic of Oilprice.com

Jen Alic is a geopolitical analyst, co-founder of ISA Intel in Sarajevo and Tel Aviv, and the former editor-in-chief of ISN Security Watch in Zurich.




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News