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Financial Times: Delta militants release hostages

By Dino Mahtani in Lagos
Nigerian militants released the last three of nine foreign oil workers taken hostage several weeks ago but threatened more destruction to the oil industry in the world’s eighth biggest exporter.
The Movement for the Emancipation of the Niger Delta handed over two Americans and a Briton to government officials on Monday, helping to stifle upward pressure on international oil markets. But Mend, which is demanding a bigger share of the government’s oil revenues for the Ijaw, the majority tribe in the oil-producing delta, said it had chosen to release the foreigners to free up hundreds of its fighters, otherwise used for guarding hostages.
“We are not in negotiations with the Nigerian government so oil companies and their workers should not be deceived into a false sense of relief,” the group said in a statement.
The group has threatened to cut another 1m barrels on top of a reduction of more than 630,000 b/d, or 26 per cent of Nigeria’s production, resulting from attacks this year – largely directed against Royal Dutch Shell, Nigeria’s biggest producer.
Officials said the hostage release was brokered by members of FNDIC, another militant group that has operated in the delta for years and was key to an Ijaw insurgency that shut 40 per cent of Nigeria’s oil production in 2003. Delta human rights activists say FNDIC has a close relationship with Mend. The role of FNDIC is complicated by the fact that some of its leaders and loyalists say they have registered companies with Shell to solicit jobs such as pipeline clamping, surveillance, oil-spill clearances and waste disposal.
Kingsley Otuaro, FNDIC secretary-general, said he and his half-brother had registered contracting companies for work in the area where militant attacks and abductionshad taken place. But he complained that Shell had not honoured many of its promises for work.
“Shell has a cumbersome bureaucracy and often rely on their own local syndicates. We feel cheated,” Mr Otuaro said. Shell confirmed that Mr Otuaro’s half brother owns a company that is a Shell contractor.
Tension among local communities linked to militant groups frequently results in acts of sabotage against oil facilities, or violence among rival communities. A report commissioned by Shell and published in 2004 said the company’s corporate policies could force it to withdraw onshore production by 2008.
While Chevron, one of the biggest US oil companies in Nigeria, has changed its policy of engaging with “host communities”, saying such policies are responsible for increasing tensions, industry officials acknowledge that all oil companies are under pressure to make ad hoc payments to communities or to dish out contracts to calm tensions. While Chevron was worst hit in 2003, this year it has avoided strikes on its facilities. Some militants say this is because the company is easier to deal with.
Meanwhile many militant groups in the delta operate in cartels alongside political and military figures and are engaged in the theft of crude oil for sale to international criminal syndicates. Industry officials say such groups have built up arsenals from the proceeds and are likely to be a source of instability before elections next year.
Government officials privately acknowledge that political figures encouraged the rise of militant groups to bolster their influence before elections in 2003. But some officials say the companies are more to blame. “The methods of the kidnappers may be wrong but you cannot exonerate the oil companies,” said Ovuozourie Macualay, a government commissioner for ethnic affairs and conflict resolution.

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