Beyond the September 15, 2009 fresh quit notice, which the Movement for the Emancipation of the Niger Delta (MEND) gave to oil multinationals operating on oil platforms in Nigeria is a new threat to the country’s economy and global oil pricing. Energy Correspondent, ADEOLA YUSUF, periscopes the economic hornet’s nest stirred by the new threat and the renewed measures to render the threat infertile
September 15, 2009 and October 5 have, without doubt, crept into the realm of unique dates on Nigeria’s calendar. By September 15, the 60 days ceasefire declared by the Movement for the Emancipation of the Niger Delta (MEND) will lapse, while the amnesty’s race championed by the Federal Government gets to its finishing line by midnight of October 5, 2009. The two dates, where the cat and mouse relationship between the FG and MEND will again come to the fore, have already started to stir furore in Nigeria’s multi-billion dollar oil industry.
Although Nigeria, world’s seventh biggest oil producer, which hitherto contributed 2.3 million barrels daily to the global oil market, is, due to series of attacks on oil equipment, contributing about one million barrels per day to the global population growing thirsty for crude, the country still plays major role in determining the international prices of oil.
MEND Stirs Hornet’s Nest
Penultimate weekend, MEND threatened to resume attacks against the oil industry on September 15, when its self-declared ceasefire expires. Nigeria’s main militant group made the threat in an electronic mail statement, picking holes in FG’s money-for-arms programme.
This “deceit”, it declared, would not solve the region’s problem.
“The on-going amnesty programme seems to have achieved separating those who still have the zeal to fight for our freedom from those who were in it for the money. ‘There are still too many! Bring them down to the spring, and I will sort out who will go with you and who will not’ – God to Gideon (Judges 7:5),” the group wrote.
MEND continued in the strongly-worded statement: “Today, Saturday, August 22, 2009 that sorting process was again re-enacted in Yenagoa, Bayelsa State, where weapons mostly bought by the government were displayed and the boys separated from the men in the circus.
“The charade witnessed in Bayelsa is not an indication of success, but that of failure, considering that the energy put into that event could have been better used in deliberating on the root issues collated in the Niger Delta Technical Committee report which addressed such germane issues from the Willink’s Commission of 1958 to date.”
In the midst of such sheer deceit, the statement read, “MEND will be compelled to resume with ferocious attacks on the oil industry at the end of our ceasefire on September 15, 2009, to prove that weapons being displayed are mostly government-owned and those surrendering them have not been part of the previous campaigns like Hurricanes Barbarossa, Piper Alpha and Moses that brought the government to its knees.”
The group stated further: “We have also suspended talks with the Special Adviser to the President on the amnesty, Mr. Timi Alaibe, who, like the government, expects disarmament without the real issues being addressed.
“MEND will not enter into talks with governors from the region who have tainted the amnesty programme with politics and monetary inducements.
“Many of the boys who have received money today will, at best, squander it on material things, and what happens next can best be left to the imagination.
“Our solemn pledge to the people of the Niger Delta still remains to emancipate the region from the forces that have held it down for over 50 years with divide-and-rule, monetary inducements and treachery.”
Government’s Louder Silence
Indications emerged last Wednesday that the Federal Government might have instructed the Joint Task Force (JTF) and other peace-keeping agencies in the Niger Delta region not to respond publicly to the threat by MEND to resume hostilities on oil facilities in the region come September 15.
A Source told Sunday Independent on Tuesday, four days after the threat was issued, that there were more to the silence the government was using to greet the threat.
Sunday Independent gathered that the FG was seriously scheming to stop “criminal militancy” in the region once and for all.
Government, according to the source who works at the Presidency, “does not want to join issues with MEND until the amnesty period lapses.”
SPE Lines Up Behind FG
In what observers described as a tacit support for the FG, the Society of Petroleum Engineers (SPE) expressed concern over the taking over of the real struggle for the development of the region by some unscrupulous elements.
SPE said through its chairman, Nigeria council, Bayo Ojulari, that destruction of the oil facilities by militants would adversely affect development in the region.
Ojulari, who spoke in Lagos, however maintained that the activities of the militants would stifle foreign investment in the country’s oil sector.
“The attacks will discourage foreign investments and create instability in the sector, as people are not ready to work in the region for fear of being attacked.
“They go to other areas or change their line of business,” he said.
There are, according to Ojulari, three militant groups: those clamouring for development and want the companies to implement certain things, those using the struggle for their political gains to cause instability, and poor criminals.
“The criminals specialise in attacking oil wells, stealing crude and destroying pipelines,” he added, accusing the third group of masterminding the quit notice to oil companies.
According to him, oil companies have spent about $1 billion on the development of the region.
“Annually, each company spends between $100 million and $250 million on each community for development of the area.
“In all, the joint venture gives about 90 per cent of income generated from the oil-rich communities to the federal, states and local governments,” Ojulari said.
He said it was difficult to observe any development in the area because the money was released to the people to execute projects.
“The monies given to them go into micro-credit, construction of schools, water, empowerment programmes and sponsorship of students within and outside the country,” Ojulari said.
And The World Pays Higher For It
Oil prices skyrocketed immediately news of the threat fluttered into the global market. The commodity traded near $75 on Monday upon information that the militants had issued a notice to all oil companies in Nigeria to leave or face offensive on their installations.
In more good news for the U.S. economy, the National Association of Realtors said, penultimate Friday, that home re-sales posted the largest monthly increase in at least 10 years.
This price surge repeated on Tuesday when the commodity rallied above $74 a barrel.
Analysts blamed the price rally on news of threats by militants in Nigeria and on expectations that the U.S. will sap the already weak demand.
Oil approached $75 a barrel on Monday for the first time in 10 months amid optimism that the world’s economies are on the mend, but fell back to settle at $74.37, up 48 cents on the day.
Expectations that demand for energy will grow, at least for oil and gasoline, were spurred by Federal Reserve Chairman, Ben Bernanke, who said penultimate Friday that the recession-hit U.S. economy is recovering.
Bernanke’s remarks and signs of improvement in the U.S. housing market sent stock markets higher, with some momentum carrying over into the new week.
Despite the optimism about recovery from recession, analysts say energy demand remains in the doldrums and seasonally lower demand for gasoline as the summer holidays end will exacerbate that weakness.
“Oil at the $70-plus level remains potentially vulnerable because there is little constructive fundamental support, inventories are high and global demand remains weak,” said Victor Shum, an energy analyst with consultancy firm, Purvin & Gertz, in Singapore. “In my view, oil prices will likely give in to the fundamentals in the coming week. Seasonally, oil demand is lower in autumn; so reduced demand in the shoulder season may put further pressure on oil.”
Nearly all world stock markets were lower on Tuesday, providing a negative lead for the oil market, which often looks to the performance of equities as a gauge of economic optimism and therefore crude demand.
In other NYMEX trading, gasoline for September delivery fell 0.15 cents to $2.03 a gallon and heating oil was down 1.67 cents to $1.9124 a gallon. Natural gas fell 2.1 cents to $2.948 per 1,000 cubic feet.
In London, Brent crude was down 64 cents at $73.62.
The World Belief In FG’s Silence-succour
Oil prices, however, tumbled below $72 a barrel on Wednesday, after dipping more than three per cent overnight on renewed belief by investors that the Nigerian government could handle the new threat.
The global oil market depositors also expected inventory data from the U.S., world biggest oil consumer, to show weak demand.
Daily Independent (a sister publication of this weekly) exclusively reported on Wednesday that the FG was waiting for October 5, when amnesty would lapse before taking a decisive action “to stop criminal militancy once and for all”.
The source that confided this to Daily Independent, maintained that the government was “already strategising on it”.
This news, however, brought normalcy to the market and reduced the amount the country would pay on product subsidy.
Defence Minister’s Hot Words Against Arms Struggle
From Nigeria’s Defence Ministry came hot words for MEND on its planned armed struggle. The minister in charge, Major General Godwin Abbe (rtd) did not mince words when he, on Wednesday, spoke forcefully, against threat of renewed attacks by the leading militant group at the end of the 60 days amnesty offered by FG.
Abbe, who described news that militant leader, Government Ekpumopolo (aka Tompolo), had agreed to lay down his arms as positive, urged MEND to throw in the towel by halting economic sabotage because the militant group had lost the sympathy of Nigerians.
Fielding questions from State House correspondents at the Presidential Villa in Abuja, the Defence minister, who is also chairman of the amnesty committee, said Nigerians had realised that most of the problems confronting the country today, such as the power crisis, are caused by the activities of militants.
He said the militants would lose an opportunity for peace if they fail to accept the amnesty deal before its expiration. He added that they would lose the respect of people from the region and Nigerians in general.
The government, Abbe continued, has appealed MEND not to make good its threat. But the authorities would not fail to deploy the armed forces to curtail insurgence from any part of Nigeria and provide security to its citizens and oil facilities, he declared.
The Defence minister stated that government was taking the issue seriously. He advised members of the group, who are yet to come out of hiding, to take advantage of the remaining days by turning in their arms.
“We have appealed to their consciences not to carry out the threat because they have more to lose if they go back to militancy,” the minister stated. “They should not continue to bring cry and anguish to women, children and the elderly in the region.”
He commended the efforts of President Yar’Adua to address the problems of the region, noting that government “is sincere and determined”.
Abbe, who criticised the resort to violence, asked rhetorically if that would construct roads and provide hospitals.
On the issue of cash for arms, Abbe disclosed that government would not give money to any group of militants in exchange for arms surrendered.
Sylva Warns MEND
Governor Timipre Sylva of Bayelsa State also threw his weight behind FG against MEND’s new threat. The governor dared defiant members of the group to identify themselves to the public, describing their threat as empty.
Airing his views during an interview in Lagos, the governor who wondered why the militants should be compensated for killing, maiming and disrupting economic activities, in the name of amnesty, declared that this amounts to rewarding bad deeds.
“Honestly, God is controlling it. I can tell you that he is hearing the prayers of well-meaning Nigerians in ensuring that there is peace,” he said.
According to Sylva, MEND lacks the capacity to mount attacks on the due date, September 15. The governor explained that most MEND members had already given up their arms and wondered who the faceless people behind such threats were.
“Nobody has said that Boyloaf is not part of MEND. He was a major part of MEND. Africa was part of MEND. For now, we have succeeded in breaking their ranks. That means we can cash in on this and do something. We are waiting for the rest of MEND members who have threatened to resume attack on oil installations on September 15,” said Sylva.
For him, the era of militancy is coming to an end. However, the problems of the region will not be solved automatically, he added. The governor further pointed out that his administration “is focused” on the post-amnesty period.
“I cannot say amnesty is now fully on and it has succeeded in tackling the Niger Delta problem. No. Amnesty was not conceived like that. Amnesty was designed to give the platform and the basis for the development of the Niger Delta, because at the end, it is development and opportunities that will solve the problems of the Niger Delta,” said Sylva.