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Nigeria’s Main Rebel Group Declares 60-Day Cease-Fire

Bloomberg

By Edward Johnson

July 15 (Bloomberg) — Nigeria’s main rebel group, the Movement for the Emancipation of the Niger Delta, declared a 60- day cease-fire in its campaign targeting oil and gas installations after authorities freed leader Henry Okah.

The cease-fire, which came into force at midnight local time, should “create an enabling environment” for talks with the government, MEND spokesman Jomo Gbomo said in an e-mailed statement today.

The government must withdraw forces from communities in the Gbaramatu area of the southern Delta state and allow displaced people to return to their homes as a “compulsory prelude” for talks, Gbomo said.

MEND made the release of Okah a key condition for ending its rebellion in the Niger River delta, home to Nigeria’s oil industry. Attacks have cut more than 20 percent of the nation’s crude exports since 2006.

The West African country has the continent’s largest hydrocarbon reserves and is the fifth-biggest source of U.S. oil imports. The country holds reserves of more than 36 billion barrels of crude and 187 trillion cubic feet of gas.

Levi Ajuonuma, spokesman for state-owned Nigerian National Petroleum Corp., didn’t immediately respond to an e-mailed request for comment.

Crude Rising

The cease-fire had no immediate impact on the oil market, with benchmark West Texas Intermediate crude rising as much as 0.6 percent in after-hours trading on the New York Mercantile Exchange after an industry report showed gasoline stockpiles in the U.S. declined.

Brent crude oil for August settlement rose 49 cents, or 0.8 percent, to $61.35 a barrel on London’s ICE Futures Europe Exchange at 10:38 a.m. in Sydney.

“Underlying tensions in the Nigerian oil complex remain and a cease-fire in the near term won’t get to the root of the problem,” said Yingxi Yu, a commodities analyst at Barclays Capital in Singapore.

Since MEND started its assault in January 2006, Royal Dutch Shell Plc, Chevron Corp. and Exxon Mobil Corp. have suffered attacks on plants and pipelines, curbing production of the light, sweet variety of oil favored by U.S. refiners.

Scott Walker, a Chevron spokesman based in Houston, didn’t immediately respond to an e-mail or phone call requesting comment on the cease-fire.

Intensified Attacks

MEND has intensified attacks against oil installations in the region since the military began an offensive against its positions in May. The rebels have claimed 24 raids on oil installations and one on a chemical tanker since May 25.

Oil production has fallen to less than half its capacity because of the escalation in fighting, with the country pumping 1.6 million barrels a day, compared with capacity of 3.2 million, the government said May 22.

President Umaru Yar’Adua has offered an amnesty to the rebels, giving fighters until Oct. 4 to surrender their weapons and renounce violence.

Okah was arrested in Angola in September 2007 on suspicion of gun-running and deported to Nigeria in February last year to face a treason trial. He is suffering from a kidney ailment, his lawyers say. The rebel leader was released two days ago by Nigerian authorities after all charges against him were withdrawn.

Oil Wealth

The group says it is fighting for a greater share of the delta’s oil wealth for local people. Communities in the Niger Delta, a 70,000-square-kilometer (27,000-square-mile) maze of rivers and creeks forming one of the world’s biggest remaining areas of mangroves, are among Nigeria’s poorest, with unemployment over 90 percent in some areas.

The region contains more than 600 oil and gas fields onshore and in nearby Atlantic shallow waters, linked to pumping stations and terminals by about 6,000 kilometers (3,729 miles) of pipelines, according to the International Energy Agency.

Sabotage at Shell’s oil plants in the delta region, where it is the largest international producer, is the main reason behind an increase in worker deaths and oil spills last year, the company said at its annual general meeting at The Hague on May 19.

To contact the reporter on this story: Ed Johnson in Sydney at [email protected].

Last Updated: July 15, 2009 00:47 EDT

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