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The Economist: Nigeria: Blood and oil

Mar 15th 2007 | LAGOS

Elections could further destabilise the violent, oil-rich Delta region

THE seedy drinking-holes frequented by burly foreign oilmen in Nigeria’s main oil city of Port Harcourt are pretty empty these days. Kidnappings and killings of expatriate workers, car-bombs and violent robberies have persuaded many to stay behind the high walls and barbed wire of their own homes, as armed groups wreak havoc ahead of national elections next month.

In the past year, attacks on oil facilities have forced Nigeria to shut down a fifth of its production; over 100 foreign workers have been kidnapped in the oil-producing Niger Delta region. Higher security costs and a shrinking number of expatriates willing to take the risks of working there have sharply slowed new investment. The Nigerian government has lost billions of dollars in oil revenues.

Now the multinational oil companies, such as Royal Dutch Shell, that operate in Africa’s biggest oil producer are bracing themselves for more trouble. The omens are not good; in the run-up to the elections in 2003, violence in the Delta forced Nigeria to shut down 40% of its oil capacity.

Trouble in the region is not a new phenomenon, but it has escalated in the past year or so. For years, impoverished communities in the tropical swamplands of the Delta protested against exploitation of their lands by oil companies, only to be suppressed by the army. Things got worse under civilian rule in the late 1990s, when politicians armed local thugs to rig elections for them. After the 2003 elections, many of these bully-boys used their guns in territorial squabbles in the mangrove creeks. But they also began to espouse a radical political rhetoric as well, demanding a greater share of the oil-wealth for their local communities. In the cities, criminal gangs, born from secretive university fraternities, were armed in a similar way.

Militant cells and gang leaders are engaged in a variety of criminal enterprises, building up arsenals of weapons with the proceeds and sometimes working with corrupt army officials. The theft of crude oil from sophisticated oil pipelines and wells (known as “bunkering”) has become a multi-million-dollar industry. Worryingly, the Movement for the Emancipation of the Niger Delta (MEND), the mysterious group responsible for the most troubling attacks on the oil industry last year, has been trying to bridge the gap between militants in the creeks, with their machine-guns and rocket-launchers, and the criminal gangs in the cities, armed with lighter Kalashnikov rifles.

On January 28th MEND stormed a police complex in Port Harcourt, freeing 125 criminals, including Soboma George, an influential gang leader who had once been used to help rig state elections for the ruling party. MEND’s anonymous leader and spokesman boasts that he has “the oil industry by the balls”. On March 15th, after releasing its latest two hostages, presumably for a nice ransom, MEND promised to step up its attacks.

But many groups falling under the broad banner of MEND have local agendas and a variety of paymasters. Some have been enraged by the choice of gubernatorial candidates put up by the ruling People’s Democratic Party (PDP) which may well cheat, rig and bribe its way into hanging onto power in the Delta State Houses in April’s elections. The richest oil-producing states have revenues of up to $1.3 billion a year but dismal records in providing basic services, since officials loot most of the money. The fear is that militants could work alone or with MEND to disrupt elections in the Delta states and launch attacks on the oil industry as a way of holding the PDP state and federal governments to ransom. “Either bodies are going to pile up or we are going to see an oil shock, or both,” says an oil-industry security official.

The PDP candidate for president, Umaru Yar’Adua, a northern state governor, says that by picking as his running-mate Goodluck Jonathan, from the Delta’s majority tribe, the Ijaw, he will be able to tackle the region’s problems. Should he become vice-president, Mr Jonathan will be under pressure to deliver quick results to his people if he wants to stave off yet more violence and unrest in his land.

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