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Muhammadu Buhari, Nigeria’s president, has won a second term in office with a lead of over three million over opposition candidate Atiku Abubakar, who made some bold promises on the campaign trails, including a promise to Niger Delta communities that if he won they could keep all oil revenues generated by supermajors operating in Nigeria’s oil-rich region.
The first Buhari term was marked by violence in the Delta by various militant groups that claimed they were attacking oil fields and infrastructure in response to the poverty that reigns in the region despite the billions of dollars made from oil production and exports.
The violence, coupled with more sort of traditional forms of vandalism such as oil theft from pipelines, created quite a few headaches for the Buhari government, leading to a serious slump in Nigeria’s total oil production and gravely affected the country’s export revenues as a result.
However, in the past year or so the situation has improved somewhat. Violence is significantly less frequent these days after the oil ministry managed to negotiate a truce with most militant groups. Vandalism is still a serious problem, but steps are being made to rein in self-styled refineries who bought the crude stolen from the pipelines that crisscross the Delta. After for years chasing and closing them down, now the government is trying a new approach: making them legal.
In this context, many observers of the political situation in Nigeria warned that if Buhari lost this vote, the terms of agreements struck with militant groups and Delta communities by the Buhari government would need to be renegotiated and they might break down. So, for the oil industry the re-election of the incumbent in Nigeria’s presidency is good news.
As for what the future holds, the restructuring and reform of the national oil company would likely continue to top the agenda as it has proven to be slower and more challenging than what its engineers initially may have expected.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.