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Nigerian call for oil theft crackdown as militants cease fire

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Nigerian call for oil theft crackdown as militants cease fire

By Matthew Green in Lagos

Published: June 23 2008 07:32 | Last updated: June 24 2008 08:02

A Nigerian militant group has declared a temporary halt in its campaign against the oil industry just days after staging an attack that cut the country’s output to its lowest level in more than 20 years.

Fears over Nigeria’s rapidly declining production dominated discussions at a high-level meeting in Jeddah this weekend aimed at taming the impact of runaway oil prices on the global economy. Saudi Arabia pledged to raise production by 200,000 b/d to its highest level in 30 years to offer some succour to oil importers, but Nigerian gunmen shut in the same amount in a raid on a huge offshore facility owned by Royal Dutch Shell on Thursday.

The Movement for the Emancipation of the Niger Delta (Mend), which staged the night-time attack on Shell’s Bonga vessel, said it had declared a truce with effect from Tuesday after an appeal from elders to give dialogue a chance.

But Mend stopped short of saying it would participate in a planned summit the government has pledged to hold in Abuja, the capital, within the next few weeks to try to kick-start a new initiative to end the long-running insurgency in the Niger Delta.

“It’s just a temporary respite. It’s not something I would regard as a definitive end to hostilities in the region,” said Nnamdi Obasi, an analyst with the International Crisis Group think-tank in Abuja. “The fundamental issues have not been addressed.”

Umaru Yar’Adua, the president, is planning to invite representatives from across the delta region to sketch out a plan to unravel the complex tangle of conflicts, fuelled in part by the industrial scale theft of crude oil.

In a column in a special report on Nigeriapublished in Tuesday’s Financial Times, Dele Cole, a former presidential adviser, calls for private security contractors to be deployed to protect energy installations from attack and clamp down on the massive theft of crude oil which he estimates intermittently may involve 500,000 b/d of Nigeria’s production.

“On a bad day some 25 per cent of Nigeria’s oil exports are illegal,” Mr Cole writes. “If current trends continue new exploration will become impossible.”

His plan includes introducing a chemical-sampling system to track the origin of crude oil cargoes and seeking a new approach to development in the Niger Delta, where poverty is rife.

Mr Yar’Adua’s task is complicated by the proliferation of armed groups across Nigeria’s oil-producing heartlands, where the dense vegetation and twisting creeks make military action difficult. Mend is only one of many factions capable of causing damage to oil facilities.

Last Thursday, shortly after the Bonga raid, youths sabotaged a pipeline belonging to Chevron, the US energy giant. Nigeria’s army estimated that 120,000 b/d of output was affected.

The attacks have piled further pressure on an industry which is still struggling to restore the loss of 500,000 b/d of production shut-in during an upsurge of violence in early 2006, which at the time accounted for about a fifth of Nigeria’s production.

Nigerian energy officials say the most recent losses have cut output to close to 1.5m b/d of oil, its lowest level since the mid-1980s – in 2005 it produced 2.5m b/d. Mr Yar’Adua has pledged to hunt down the perpetrators of the attack on Bonga, the first time militants had managed to affect a facility located more than 100km out to sea.

Western majors such as Shell, ExxonMobil, Chevron and Total are hoping such deepwater developments will provide a safe way of restoring Nigeria’s declining output. But the Bonga raid, carried out by speedboat-riding gunmen who spent perhaps seven hours navigating open sea in darkness, has exposed the failure of Nigeria’s Navy to offer adequate protection.

Mend says its men did not board the vessel, but opened fire with guns and threw dynamite. Shell has yet to publish a detailed account of what happened or say when Bonga’s production will resume.

EDITOR’S CHOICE

Nigerian rebels sabotage Shell oil pipeline – May-26

Copyright The Financial Times Limited 2008

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