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Global Intelligence Report - 20th February 2019

Nigeria

Sources

- Inside source at a black market Niger Delta refinery

- Investigative journalist with access to militants in Nigeria

- Nigeria political analyst

Everything You Need To Know About Nigerian Oil Right Now

Nigeria is currently just recovering from oil-production disruptions suffered in 2016 because of attacks on the pipeline infrastructure by armed militants operating under the name of Nigeria Delta Avengers. The attacks had caused the output of Africa’s biggest producer, usually above 2 million barrels a day, to drop at a point to under 1 million barrels daily. With oil the source of two-thirds of government revenue and more than 90 percent of export income, there were telling consequences as Nigeria slid into its first recession in 25 years in 2016.

President Muhammadu Buhari, a former military ruler who won elections in 2015, had talked tough on assuming office, threatening to deal with the militants. He canceled pipeline-protection contracts awarded to former militant leaders such as Government Ekpemupolo, better known as Tompolo, and ordered their investigation and prosecution. It is widely believed by our sources on the ground, that this move by Buhari prompted the resumption of the attacks.

Faced with a collapsing economy, Buhari sought negotiations with the militants, using back channels established by Oil Minister Emmanuel Kachikwu while he was an ExxonMobil executive, to reach out to the fighters. Then elders of the region under the Pan-Niger Delta Elders Forum weighed in and convinced the fighters to agree to a truce while they presented to Buhari the region’s demands centered around giving the locals more control over their resources, reducing military presence and initiating developments projects. Since then, the demands haven’t been met and there has been a kind of stalemate, leaving the Delta in a permanent state of unease.

Output Versus Oil Theft

Despite the relative peace of the past two years, Nigeria’s oil output has struggled to recover to previous levels above 2 million barrels per day, treading water instead in the region of 1.6 million to 1.8 million barrels daily. The major reason for this has been a booming underground industry in the theft of crude from pipelines for sale to vessels waiting offshore or to illegal bush refineries.

During a visit to the Delta region at the end of January, we sent an investigative journalist to one of these local…




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