Nigeria’s restive oil region braces as elections approach

As the race between President Muhammad Buhari and his main challenger, Atiku Abubakar, nears its climax on Saturday, the military has stepped up its presence in the 70,000 square-kilometer (27,000 square-mile) southern oil rich Niger Delta region. The area, where most oil reserves in Africa’s biggest producer are located, is the source of two-thirds of state revenue and 90 percent of export income.

The Niger delta has been a byword for unrest for more than two decades, with the area’s ethnic minorities complaining they’re being cheated out of their wealth by the government and international energy companies and left with environmental ruin. Nigeria is the sixth-biggest producer in the Organization of Petroleum Exporting Countries.

More than a decade ago attacks by armed militants almost crippled Nigeria’s oil exports, forcing the government to reach an amnesty deal in 2008 that gave former fighters jobs, skills training and monthly stipends. After Buhari defeated Niger delta native Goodluck Jonathan in 2015, he canceled the amnesty payments only to reinstate them after another round of attacks slashed output. That along with a drop in world prices contributed to Nigeria’s first recession in a quarter-century.

But output has yet to recover to reach the government’s budget target of 2.3 million barrels a day and has hovered between 1.6 million and 1.8 million a day in the past two years. As oil majors moved most of their operations offshore to avoid the unrest, Nigeria pushed back its goal of 4 million barrels in daily production and 40 billion in reserves from 2010 to 2020. While the wholesale sabotage of export trunk lines has abated, there’s a blossoming underground industry in stolen crude for local refining or sale to offshore vessels.

The feeling that the federal authorities in Abuja, the nation’s capital, have abandoned the region, which is part of the predominantly Christian south, runs deep. Because both Buhari and Abubakar are northern Muslims, there’s little of the passion for the vote that ran high when Jonathan was a candidate. Abubakar has the edge because his oil-service company Intels Nigeria operates the Onne Oil and Gas Free Trade Zone outside Port Harcourt and he’s pledged to give local authorities more control over oil resources.

Edwin Clark, the 92-year-old chairman of the Pan-Niger Delta Elders Forum which helped the Buhari administration negotiate with the militants in 2016, said his group supports Abubakar because of his stance on devolving power.

Source: Bloomberg



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