Nigeria is planning the construction of a new $25 billion deep-water port in the restive and oil-rich Niger Delta, hoping the new facility will entice foreign oil interests to stay in the region despite escalating violence and potential political upheaval.
The project is set to be undertaken in a group effort involving U.S., British and Dutch marine and industrial construction firms.
Construction on the project is scheduled to begin this March and its initial stages completed by the end of the year, allowing Nigeria to increase oil lift from 3 million estimated barrels per day to 4.1 million bpd.
The project, according to Nigeria analysts, is an effort to stem the growing tide of concern over the violence plaguing the Delta region, where militant groups have in just a year’s time hampered oil production in the world’s eighth-largest producer by at least 25 percent.
Their attacks on oil installations and the kidnapping and killing of foreign workers have garnered militants known as the Movement for the Emancipation of the Niger Delta international attention and provoked some foreign firms to shut down some operations for fear of additional violence.
According to a recent report, violence attributed to MEND cost Nigeria $4.47 billion in 2006.
“Early in the second quarter of 2006, there was a loss of production of 600,000 barrels a day from joint venture operations. The loss was due principally to social disruptions in the Niger Delta, which continued until the end of fiscal year 2006,” Nenadi Usman, finance minister of Nigeria, said recently.
On Wednesday, the head of the Nigerian National Petroleum Corp. said Nigeria was forced to import fuel to meet its own energy needs because all three of the country’s main refineries were shut down due to attacks by MEND.
Militants, meanwhile, were blamed for the kidnapping Tuesday of two foreign construction workers — believed to be a British and a U.S. citizen — in the seaside city of Port Harcourt.
The attack and abduction took place just days after six Filipino workers were abducted. Already this year, nearly 30 people have been taken hostage by MEND and other groups, though some have been released.
Nigerian Defense Minister Thomas Aguiyi-Ironsi warned militants this week that the military would not stand idly by and watch the region be reduced to chaos. He also refuted reports that Nigeria had hired Chinese soldiers to police the region as “baseless, false, spurious and seditious.”
“The problems of the Niger Delta region will be solved by Nigerians and Nigerians alone,” he said.
Nigerian President Olusegun Obasanjo has stressed his desire to regain control of the region to improve oil production. In August, he vowed to crack down on MEND. However since then, militants have stepped up attacks and kidnappings and vowed to continue their struggle until their demands for a greater distribution of oil wealth were met.
The continuing violence comes ahead of presidential elections slated for April 2007. If successful, the election would mark the first time Nigeria has successfully transferred power from one leader to another since the country’s transition from military rule in 1999.
Those elections could be in jeopardy if the violence continues, noted Princeton Lyman, former U.S. ambassador to Nigeria and an analyst with the Council on Foreign Relations.
In addition to threats of MEND violence, Obasanjo is battling on the political front with his vice president, Atiku Abubakar, who contends that the Nigerian government and oil industry is rife with corruption and blames the president for not combating it.
Some speculate that Abubakar’s ire is based on Obasanjo’s alleged efforts to keep himt off the ballot for April elections.
“This kind of fighting just might keep the elections from happening,” Lyman told United Press International