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BB: The Low Ball NSAI Report maybe worth $1.85 to $2.00 a share for ERHE.
Sneak
Tryoty: That would be like adding 144,400,000 more share, For a new Total of 866,400,000 @ .25 to Pick up EEL.
Sneak
BB: Thanks for correcting The "Hair on the deal" statement!
BB: It would seem that Sao Tome does not like the Overbearing Nigerian Factor in the JDZ, Hence the Public Investigations of ERHE rights, The effort to resist ERHE'S rights to reclaim Blocks 5 & 6, The effort to introduce New Laws that allow the Government of Sao Tome to give out the EEZ blocks as they see fit, Partnering with Angola and Brazilian oil companies. One can not forget about the coming U.S. Naval Operations in the GOG (maybe Sao Tome request and U.S. oil interest). Could Rickland's " The HAIR on the Deal" Be the Nigerian Factor? Who Knows? As drilling draws near, The evens could become Fast and Fluid. In the World of Political Intreege, The True Story is Never as it Appears! It is always about the MONEY!
JMO
Long and Strong
Sneak
BB: That does not sound good. How can a Non-U.S. Company buy ERHE without Congressional approval?
Oily: Do you have a Rebuttal or Comformation Riddle?
Oily it looks like Mark, as they say in the News Business "You got Scooooooooooooooped"!
Thank Mark
Sneak
Mark: It should have looked like this:
The Ultra low ball reports maybe needed in order to get the other smallfry oilers to sell.
Sneak
BB: The Chinese interest in AXC maybe more related to the very large Taq Tag oil find in northern Iraq, Than P-50 oil in the JDZ. Irag is a lot closer to home and cost less to produce.
JMO
Sneak
Oh, You so Wise GRASSHOPPER!
Could be.
Sneak
Tryoty: Any Buy-out of a U.S. company by a Non U.S. National Company will requires a Homeland Security Oversight Approval.
Having said that, If AXC (A Western Goverment Freindly Company) buys ERHE, So as to get around a Homeland Security Review, Then A Real International Bidding Round could start to unfold for All the AXC GOODIES and it will not just be limited to the Chinese offer on the table. I believe that the AXC CEO will SEEL to the HIGHEST BIDDER!
Sneak
Ruby: It all sounds good, But that Cramer could not pick the winner in a One Horse Race!! ERHE will do find regardless of his Pump and Dump Stock Market Insight.
JMO, From the True Reaganist!
Sneak
Raz:
$4,175,432,153 / 150 million = $27.83 AXC stock price.
$4,175,432,153 / 722 millin = $5.78 ERHE
722 million / 150 million = 4.81(ERHE) to 1(AXC).
4.81 x $5.78 = $27.80
Oily, What happened to the $3.67 cash!
The two combined $9.45 is close to SEO price.
Have a nice day.
Sneak
Do not forget about Mr. SOROS hand in that report.
New Ultra deepwater drill ships to come on line in 2009.
Must be Presalt related.
http://www.rigzone.com/news/article.asp?a_id=74486
Sneak
OilY: Does that include the $3.67 you spoke of 2 weeks ago or is that 150 Million plus $3.67 a share?
Thank You Tryoty
Sorry, You will have to GOOGLE it up.
Sometimes one must go back in history in order to see the future going forward. Informative reading. I hope it post.
DOC] Scrambling for Oil in West AfricaFile Format: Microsoft Word - View as HTML
Thus, the control of West African oil is critical to American oil security ..... It implies among others the greater opening up of Africa’s oil reserves for ...
ecas2007.aegis-eu.org/commence
Mid: No sense laboring the issue, XOM only left Block 1. CVX can run that show. The Tiger is still lurking in the area, as per XOM CEO.
Have a nice weekend
Sneak
Thanks BB, As always very insightful.
Have a nice weekend!
Sneak
Ruby: Hard to say at this stage of the game. Need more research, But 8 to 9 years ago I remember reading an article claiming the entire West African offshore region could hold 300 to 400 billion barrels of oil and the JDZ and EEZ could hold 40 billiob barrels that oil. Exxon use to have a map that showed they wanted the whole area.
Sneak
SPP: Only time will tell. Exxon has it's eyes on the area! Thank you for posting.
Sneak
BB: Can the powers that be start a "EEZ" Board or is it to early in the Game?
EEZ PRESALT ARTICLE:
http://www.anp-stp.gov.st/eng/docs/BGS%20-%20Summary%20public%20report.pdf
The EEZ has a working Hydrocarbon Kitchen and Hanging Wall also!
Watch out for the lurking Tiger. Presalt here we come!
Sneak
This Article is for ALL THE PRESALT NAYSAYERS of the EEZ!!
http://www.anp-stp.gov.st/eng/docs/BGS%20-%20Summary%20public%20report.pdf
Have a Nice Weekend!
Sneak
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sales@upstream Petrobras lines up Sao Tome gig
News wires
Brazilian state-owned oil company Petrobras will carry out a seismic survey of the exclusive economic area of Sao Tome & Principe and train staff for the oil sector, Sao Tome’s prime minister, Joaquim Rafael Branco said.
DO I HEAR PRESALT!
Sneak
For All The China Backers of a buy out, I say not so Fast! Read This:
Geopolitical Diary: China's Calculated Currency Rhetoric
March 25, 2009
One of the more popular conventional wisdoms is that the United States is in decline and that it is a simple matter to select options that will edge the United States out of its dominant position in the world. In an editorial published Tuesday, Chinese central bank governor Zhou Xiaochuan spoke to one of the more popular financial conspiracy theories in this vein when he wrote that the time had come to establish a new scrip to replace the U.S. dollar as the global reserve currency. The issue is close to Beijing’s heart: The Chinese reserve fund is a significant holder of U.S. debt, with some $750 billion in U.S. T-bills.
China does not purchase U.S. debt out of choice, but out of a lack of choice. China is a state with serious social stability issues that are mitigated only by state intervention in the economic structure to maintain mass employment. Since there isn’t much internal demand for the goods these employed masses produce — due in part to a high savings rate and low incomes — China must peddle its goods abroad. The U.S. consumer market, with annual sales of approximately $10 trillion, is roughly equivalent in bulk to the next six consumer markets combined. Sales to the United States and other countries hardwired into the American supply chain — which includes the bulk of East Asia — are the only reasonable option. And so the Chinese yuan has a de facto peg to the U.S. dollar.
That is hardly the extent to which the Chinese are bound to the dollar, however. Because China lacks the financial and industrial infrastructure needed to metabolize the massive revenues generated by exports, the income must be stored in some sort of non-Chinese asset. Outstanding U.S. T-bills currently total $11 trillion, which — with the notable exception of Japanese government debt, which very few foreigners even touch — is greater than the next five government debt issues combined, by a ratio of two to one. U.S. debt outsizes combined euro-denominated government debt by more than three to one.
Corporate debt isn’t much of an option either, even though the combined global corporate debt market is sufficiently large to absorb China’s currency reserves. Whenever an investor holds a substantial portion of any company’s debt, market liquidity is constrained and trading dynamics are altered. The solution is a highly diversified — and therefore actively managed — portfolio. But the administrative cost of a trillion-dollar portfolio so diversified that it does not affect the value of any particular asset would be staggering. In contrast, U.S. government debt is a one-stop shop that requires — at most — minimal management.
That China’s income is primarily in either dollars or dollar-linked currencies only strengthens the rationale for pouring surplus income into American assets in general, and U.S. government debt in particular. Plainly put, China cannot put its income anywhere else because there is no other option available. There have been some mild attempts to diversify, but a dearth of options means that “mild” is about as dynamic as a diversification program for China can get.
As to a world beyond the dollar, the issue is that a reserve currency is not decided upon; it creates itself. Two things are needed to create a reserve currency. First, there must be sufficient liquidity to support a global system. That requires a central bank with an enormous amount of autonomy from a state government, and the U.S. Federal Reserve is unparalleled on this count. Not even the European Central Bank can compete. Second, the economy upon which the currency is based must be large enough to withstand fluctuations caused by other economies buying and selling its assets in massive amounts. Again, the United States is the only economy that potentially could qualify.
Part and parcel of any replacement of the U.S. dollar would be a large-scale abandonment of U.S. T-bills as the core of Chinese currency reserves, which — as the conventional wisdom holds — would force intractable economic problems upon the United States. But a closer look reveals that this is not the case. First, selling U.S. T-bills en masse simply is not possible. Every seller requires a buyer, and the volumes at hand cannot be exchanged quickly. Second, starting down that road would cause the value of the securities in question to plummet, destroying the savings the Chinese have been building up for years. The so-called “nuclear option” really is not an option at all.
So why are the Chinese bringing this up in the first place? Beijing clearly has done the math already and knows that this idea — even if it had broad support — is a nonstarter. There are two reasons. First, officials in Beijing know that any direct confrontation — whether military or financial — with the United States would end in disaster for Chinese national interests. Therefore, they want to foster anything they can that would create an international structure to restrain American power; failing that, something that just gets people thinking in that direction will have to do. Second, China is more severely affected by the ongoing financial crisis than it would like the world to register. The Chinese need sustained international demand to maintain their export industries and, consequently, their high employment levels. Espousing rhetoric that makes it appear that you have more options than you do, while redirecting attention toward a foreign power, always plays well at home.
Tell STRATFOR What You Think
Oily Do We Get Class "A" (JDZ)& class "B" (EEZ)Shares?
Oil Prices Going Higher!
ASIA NEWS MARCH 24, 2009, 9:27 P.M. ET Oil Markets Pay Scant Attention to Russia
Top Producers Cut Output, Spending; Higher Prices Ahead?Article
Comments
more in World »By JACOB GRONHOLT-PEDERSEN
MOSCOW – Oil markets may not be pricing in the extent of dwindling output in the world's biggest producer, Russia, a factor that could buoy prices later this year, traders and analysts said.
Last week, the Russian government predicted 2009 oil output of 9.68 million barrels a day, a 1.1% annual drop. But a Dow Jones Newswires survey of 12 analysts puts the decline at more than twice that rate, with the most pessimistic predicting a slump of 7%.
Having plunged to a third of last summer's peak, oil prices have stabilized lately. They remained strong in the past week despite a March 15 decision by the Organization of Petroleum Exporting Countries to leave production quotas unchanged until at least May.
The market is focused on the possibility that slumping economic growth will hit demand for energy in the world's biggest oil consumers, the U.S. and China.
But little attention is being given to Russia, where crude-oil output fell last year after a decade of increases. Russian producers pay high taxes, which leave them with limited cash to spend on maintaining fields and bringing new production online. Meanwhile, tight credit markets are slowing the flow of loans to the sector.
"We believe [Russia] will add to the growing global supply curtailment by the end of 2009, a factor which isn't fully appreciated by the market," said Oswald Clint, an analyst at Sanford C. Bernstein in London.
This month, the brokerage cut its forecast for Russia's crude production this year to 9.1 million barrels a day, a 7% drop from last year.
While the Russian government, whose coffers rely on oil revenue, has eased the tax burden somewhat in a bid to stabilize output, it is unlikely to do anything more, despite producer pleas, as the federal budget looks set to post its first deficit in 10 years.
In early January, Russia's five biggest producers -- OAO Rosneft, OAO Lukoil Holdings, TNK-BP Ltd., OAO Surgutneftegas and OAO Gazprom Neft -- announced an average annual reduction in capital spending of 15% for 2009.
But analysts said the industry may cut more spending, crimping new production capacity.
Officials agree that the situation is bleak.
Producers "may lack funds to support production levels at mature oil fields in West Siberia or to open up new fields in East Siberia and Timan Pechora [in Northern Russia] while also having to deal with the current tax burden," the government said in a statement last week.
Since 2000, oil companies ramped up production at fields in West Siberia -- the source of most of Russia's oil -- by bringing in new technology.
But as output from those fields declines, big investments are required to tap new deposits in more difficult-to-access areas.
Moscow-based Alfa Bank reckons the annual rate of decline in production at Russian oil fields already in operation totals 15% to 17%, compared with a rate of 7% in 1998. The higher rate implies producers would need to bring 1.5 million barrels a day in new output on stream just for production to stay flat.
"That's just not going to happen," said Alfa's head of research, Ron Smith.
OPEC also remains unclear about the future of Russian production.
"The uncertainty over Russian oil supply remains high," OPEC said last week in a statement. At present, the cartel forecasts Russia's daily oil production at 9.65 million barrels in 2009, a notch below the government's official estimate.
While Russia is responsible for about 20% of non-OPEC oil supply, falling output from other exporters could also influence prices, traders said.
Last week, the International Energy Agency lowered its forecast for 2009 non-OPEC supply growth to zero, largely due to production problems in the Caspian state of Azerbaijan.
Merrill Lynch said in a research note that the combination of OPEC's cutting output in recent months and the worsening outlook for non-OPEC production from Russia, Azerbaijan and Norway suggests that "supply availability will be significantly reduced in the second half of the year."
On Tuesday, crude oil for May delivery on the New York Mercantile Exchange rose $0.18 per barrel, or 0.3%, to $53.98, marking a second consecutive day of gains. It was the highest settlement price since Nov. 28.
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After looking at the AXC presentation (Thanks Ruby), I could not help but notice how the water depth change drastically. Could we have Presalt like Brazil? Read on:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brazil reports massive oil discovery
Ultra-deep offshore find challenges 'peak' theorists pushing ethanol
--------------------------------------------------------------------------------
Posted: November 14, 2007
1:00 am Eastern
By Jerome R. Corsi
© 2009 WorldNetDaily.com
Oil-drilling platform in Gulf of Mexico
Brazil has announced the discovery of a huge offshore oil field that could contain between 5 to 8 billion barrels of oil, enough to expand the country's proven reserves by 40 to 50 percent.
The "ultra-deep" Tupi field was found under 7,060 feet of water, another 10,000 feet of sand and rocks and a further 6,600 feet of salt – a total of 4.48 miles below the surface of the Atlantic Ocean.
Sergio Gabrielli, the chief executive officer of the state-run oil firm Petroleo Brasileiro SA told Brazil's President Luiz Inacio Lula da Silva Monday that reserves in the pre-salt area off Brazil's coast are much larger than the Tupi field, possibly containing as much as 80 billion barrels in oil reserves.
By specializing in advanced ultra-deep offshore oil exploration, Brazil has moved from being a country dependent on Ethanol for its gasoline consumption to becoming a net exporter of oil within less than a decade.
Felipe Cunha, an oil analyst with the San Paulo-based brokerage Brascan told CNN, "If the best-case scenario happens, this discovery would make Petrobras' reserves overcome those of Shell and Chevron and put Petrobras behind only Exxon and British Petroleum."
Brazil's offshore oil is being found in the Espirito Santo, Campos and Santos Basins some 50 miles into the Atlantic Ocean east of Rio de Janeiro.
(Story continues below)
The discovery challenges "peak oil" theorists who contend the Earth's supply of oil is running out.
WND previously reported the geological description of the Campos Basin suggests that the rock formations in which the oil is being found are in Upper Oligocene to Lower Miocene deposits; in other words, deposits from the Cenozoic Era dating back only some 24,000 years.
Many scientists believe dinosaurs dominated in the Mesozoic era stretching back 250 million years ago and ending some 65 million years ago, which would contradict the theory that dead dinosaurs or decaying ancient forests formed the oil off Brazil's soil.
The Campos Basin deposits are typically described as "turbidite," a sedimentary deposit that consists of material moved down a steep slope at the edge of the continental shelf.
The biological content of the Campos Basin rock is found to contain "benthic foraminifera," little shell creatures that live on the ocean bottom.
The rock itself is described as having been formed in "bathyal" conditions, a term typically reserved to describe the ocean floor from half a mile to about two miles down.
The geological description of the Campos Basin is consistent with the abiotic theory, that oil is formed inorganically, within the mantle of the earth, and seeps up into reservoirs formed in porous sedimentary rock deposits.
The "peak oil" theory was first proposed in 1956 by Shell Oil's M. King Hubbard who drew a bell shaped curve and argued that oil production would gradually diminish to nothing after reaching "peak production" sometime in the 1970s.
Critics have charged that peak oil theorists continually revise their estimates of when oil production will be exhausted without abandoning their theory when new discoveries of oil reserves challenge their fundamental assumptions.
The Energy Information Administration, or EIA, of the U.S. Department of Energy continues to report world proven oil reserves exceeding 1.3 trillion barrels, the most in human history, despite oil consumption doubling since 1970.
Brazil's huge offshore oil find also challenges U.S. advocates of ethanol.
According to the EIA, Brazil is the 10th largest energy consumer in the world and the third largest in the Western Hemisphere, right behind the U.S. and Canada.
For decades, Brazil was considered oil-poor, reliant upon the production of ethanol to provide gasoline for automobiles.
Today, the EIA reports over half the cars in Brazil are flex-fuel, meaning they can run on 100 percent ethanol or an ethanol-gasoline mixture.
The EIA further reports eight of ten cars sold in Brazil are flex-fuel vehicles and all gasoline in Brazil contains ethanol, with blending levels ranging from 20 to 25 percent.
Offshore oil has increased Brazil's oil production since 2005, with the EIA estimating it will reach 2.32 million barrels a day this year, allowing the country for the first time to become a net exporter of oil.
The EIA now ranks Brazil's oil reserves at second only to Venezuela. The three major suppliers of oil to the U.S. are now Canada, Mexico and Venezuela.
WND reported Chevron in September 2006 announced the discovery of a giant oil reserve in the Gulf of Mexico, the Jack Field, estimated to hold as much as 15 billion barrels of oil, enough to increase the U.S. proven reserves by as much as 50 percent.
Still, environmentalists largely have blocked offshore ultra-deep oil exploration in the U.S.
Yet, in 2006, Cuba announced plans to hire the communist Chinese to drill for oil some 45 miles off the shores of Florida.
This move was made possible by the 1977 agreement under President Jimmy Carter that created for Cuba an "Exclusive Economic Zone" extending from the country's western tip to the north, virtually to Key West, Fla.
Tryoty: Could ERHE be Spliting into Class "A" shares(JDZ) and Class "B" shares (EEZ)?
Does ERHE sells Class "A" 361 million shares for $3.67 a share or $1.324 billion dollars and One share of AXC for 4.27 shares of Class "A" or $6.33 for each Class "A" share?
$3.61 billion / by $6.00 BOE = 601MB average for all of ERHE'S JDZ Rights.
Is that the $10.00 a share that SEO was asking for? and still have some up side with AXC as well as Diversifying the risk by being part of oil producing company?
Back to Sneaking.
MEND Part 3:
Nigeria's MEND: A Different Militant Movement
March 19, 2009 | 1118 GMT
Summary
Print Version
To download a PDF of this piece click here.
An outgrowth of the Ijaw Youth Council’s (IYC) militant wing, the Movement for the Emancipation of the Niger Delta (MEND) first emerged in December 2005 when it took credit for blowing up an oil pipeline in Delta state. It is not clear who activated the group or coined its name, but it soon became clear that MEND was a useful tool for Ijaw Chief Edwin Clark in containing his arch rival, Rivers Gov. Peter Odili. By early 2006, as Nigeria geared up for its third round of elections in 2007, a different kind of militant group was waging war in the Delta.
Editor’s Note: This is the third part of a three-part series on the Movement for the Emancipation of the Niger Delta.
Analysis
Related Special Topic Page
Special Series: Niger Delta Politics and Militancy
Related Links
Nigeria’s MEND: Connecting the Dots
Nigeria’s MEND: Odili, Asari and the NDPVF
The Financial Crisis in Nigeria
Global Economy: The Factors Behind Recent Oil Price Fluctuations
As he tried to envision his own political protégé as Nigerian president, Ijaw Chief Edwin Clark knew that he did not have a monopoly on power and influence in the Niger Delta. The Niger Delta People’s Volunteer Force (NDPVF), the militant wing of the Ijaw Youth Council (IYC), had been decapitated in September 2005 when the government arrested IYC President and NDPVF leader Mujahid Dokubo-Asari on charges of treason. As in 2003, when the NDPVF was formed, Clark needed a strong militant capability to challenge Rivers Gov. Peter Odili and emerge as the premier power broker in the Niger Delta. Clark no longer had Asari, but he still had Asari’s network of NDPVF deputies scattered throughout the region.
In December 2005, an umbrella militant group emerged calling itself the Movement for the Emancipation of the Niger Delta (MEND), made up of former Asari deputies and factions empowered to carry out attacks in their home territories. Their first operation was an attack on Royal Dutch Shell’s Opobo pipeline in Delta state. MEND has yet to identify its founder or current leader, but a spokesman known as Jomo Gbomo, who communicates to the media only by e-mail, announced in May 2007 that newly elected Vice President Goodluck Jonathan was a MEND patron. Jonathan also is widely known as a protégé of Ijaw Chief Clark’s.
At the time, the leaders of known MEND factions included Farah Dagogo, whose gang in the Tombia axis of Rivers state became known as the Niger Delta Strike Force (NDSF); Ebikabowei Victor (aka Victor Ben and Gen. Boyloaf), who commanded the faction Bayelsa state axis; Government Ekpemupolo (aka Gen. Tammo and Government Tompolo), whose faction, headquartered near the town of Warri in Delta state, was called the Federated Niger Delta Ijaw Communities; and Soboma George, whose gang, since breaking from Ateke Tom and his Niger Delta Vigilante (NDV), became known as the Outlaws and served as another MEND faction in Rivers state.
PIUS UTOMI EKPEI/AFP/Getty Images
Mujahid Dokubo-Asari, leader of the Niger Delta People’s Volunteer ForceMEND also included an arms dealer named Henry Okah, who was based in South Africa until his arrest in Luanda, Angola, in September 2007 on arms smuggling charges. Okah was later extradited to Nigeria, where he is being held on charges of treason.
MEND was launched as a tool of the Ijaw to attain national prominence at a time when the presidency was up for grabs. Odili had made his move and Clark, from all indications, had responded. Odili had Tom and the NDV; Clark had Asari’s network, rechristened MEND, which began conducting attacks in the weeks following Asari’s imprisonment in November 2005. In addition to fighting Tom’s forces, MEND attacked oil infrastructure targets as they had never been attacked before, sabotaging pipelines, bunkering oil and kidnapping foreign oil workers for ransom.
These concerted and coordinated attacks under the MEND banner gave international prominence to the Ijaw as well as money. The attacks also represented a different militant strategy in the Niger Delta. What set MEND apart from earlier groups was its apparent willingness to destroy the oil sector in order to achieve political goals. MEND was interested in establishing income streams and filling political offices over the long term, not in agitating for quick payoffs, and its aggressive focus on oil infrastructure was meant to establish credibility, not destroy the sector. But they were willing to push it pretty far. MEND attacks in 2006 and 2007 resulted in the shuttering of 600,000 barrels per day in crude output — a quarter of the country’s oil production — and in the kidnapping of hundreds of foreign and national oil workers (none of whom were killed).
It was not long before the international oil companies (IOCs) operating in the Delta began having trouble recruiting people to work there. Higher salaries, bonuses, kidnapping insurance and reinforced security helped matters some, as did a concentration on offshore operations. The belief was that exploration and production onshore in the difficult-to-defend mangrove swamp and riverine environment exposed installations and workers to MEND attacks while the more distant and isolated offshore operations (some as far as 75 miles from land) were less vulnerable. Offshore platforms were not immune to MEND attacks, however. In June 2006, MEND fighters on speedboats attacked an oil rig 40 miles off the coast of Delta state, kidnapping eight foreign workers and several Nigerian workers. It was a new seaborne capability the militant group would use more frequently.
Click to view interactive image
In early 2006, it was still not clear what was going to happen in the 2007 elections. President Olusegun Obasanjo was working to amend the constitution in order to serve a third term. By May 2006, however, Obasanjo’s constitutional amendment bid had been blocked in the senate, with opposition mobilized by Vice President Atiku Abubakar, who had his own eye on the presidency. Obasanjo would not be running for re-election in 2007.
With the presidential field wide open, aspiring candidates piled on. Nigerian northerners believed it was their turn to hold the presidency, after having seen a southwesterner rule at Aso Rock since 1999 (Obasanjo, a member of the Yoruba tribe, hails from the country’s south-west zone). Political tradition in Nigeria calls for presidential power to rotate among the country’s six geopolitical zones. After being ruled by a southwestern president and a northeastern vice president (Atiku Abubakar, from Adamawa state), northerners believed it was their turn again. (The northern Hausa tribe dominated Nigerian politics during the military junta era and remained a powerful force through their continued dominance over the army.)
Perhaps fearful the Hausa would use the military to overthrow Nigeria’s nascent democracy, Obasanjo agreed that the northerners should regain the presidency and that the best the southerners could do was gain the vice presidency. But Obasanjo would drive a hard bargain, particularly with the Ijaw and Odili. Political advancement in Nigeria is not free, nor is it based on merit. The campaign waged by militants in the Delta against the IOCs (together with the revenues the militant activity generated) would win the vice presidency for the south-south zone.
Publicly, Clark began to undermine Odili’s candidacy for vice president by questioning the Rivers state governor’s ethnicity. Odili was a member of the Igbo tribe, which is the dominant tribe in the south-east geopolitical zone but has a minority presence in Rivers state (where Odili was born). In any case, Odili’s tribal heritage did not automatically disqualify him for the vice presidency. He was still a useful politician to Obasanjo. According to sources, Odili made significant financial contributions to the country’s dominant People’s Democratic Party (PDP) in order to secure the vice presidency. PDP politicians from other geopolitical zones likely received backchannel payoffs to sign off on Odili’s candidacy. At some point, however — probably in the fall of 2006, shortly before the PDP held its December primaries — Odili lost his bid for vice president. Despite his sizable down payment for the job, STRATFOR sources say, Odili was displaced at the last minute by Clark protégé Goodluck Jonathan, then governor of Bayelsa state.
(click image to enlarge)
When Odili was still maneuvering to secure the vice presidential slot, he needed to protect his turf in Port Harcourt. Two of his aides were maneuvering to succeed him as Rivers state governor: Celestine Omehia, Odili’s special assistant since 1999, and Rotimi Amaechi, Rivers state assembly speaker. In the PDP primaries in December 2006, Amaechi’s name emerged as the candidate to succeed Odili. STRATFOR sources say Amaechi was not Odili’s preferred successor, however, and in February 2007 Amaechi’s name was removed from the election roll — likely by Odili — and replaced with Omehia’s. Meanwhile, Omehia hired Soboma George of the Outlaws gang to act as his enforcer. Facing no resistance from the state, the Outlaws proceeded to wage an unrestrained militancy campaign in Rivers state throughout the election season, indicating that they received political protection to do so.
Omehia was sworn in as Rivers state governor on May 29, 2007, but his governorship was doomed from the start. An NDPVF-allied gang led by Rivers state militant Prince Igodo, and hired by Amaechi threatened to attack the inauguration. The Outlaws, calling in Farah Dagogo’s NDSF for assistance, proceeded to attack Igodo’s camp, killing the gang leader and preventing an attack on the inaugural festivities.
That same day, in Abuja, new Nigerian President Umaru Yaradua and Vice President Goodluck Jonathan were sworn in. Shortly before the inauguration, a MEND spokesman confirmed that Jonathan was one of its patrons. With Jonathan assuming a point position for managing Niger Delta affairs, the Ijaw now had a prominent seat at the table in Abuja, with a direct hand in managing resource flows and lucrative patronage appointments. One of Jonathan’s first moves was to release the imprisoned Asari, who got out in June 2007 and immediately began singing Jonathan’s praises. According to STRATFOR sources, Asari was released to serve as a proxy for the federal government to re-establish control over his gangs in the Niger Delta. Soon after Asari returned to the region, his gangs began to ally with Tom’s NDV to battle the Outlaws.
All Roads Lead to Clark
In August 2007, after the government’s Joint Task Force (JTF) carried out a two-pronged attack against the Outlaws, assaulting a hotel in Port Harcourt where George was staying as well as one of his village homes, George appealed to Chief Clark for protection. George addressed Clark as if Clark were a father figure who needed to intervene to save his son.
Omehia faced a different kind of attack. Amaechi filed an appeal challenging Omehia’s election, and in October 2007 the Nigerian Supreme Court annulled Omehia’s victory (ruling that no election actually took place) and ordered that Amaechi be installed in his place. Mere days after Amaechi was sworn in as Rivers state governor, he travelled to Clark’s camp professing his loyalty for whatever Clark did to secure Amaechi’s belated victory.
When Amaechi was sworn in as governor, Tom was given political protection — for the time being, anyway. Tom’s forces were needed to push back George’s Outlaws, who had the run of the state. While Tom was receiving patronage, George retreated underground. Tom’s protection did not last long. In January 2008, JTF forces attacked his camps at Okrika. The NDV was attacked again by the JTF in June 2008 and pushed back from positions in Rivers state toward positions in neighboring Bayelsa state. Clashes there resulted in the death of the NDPVF-allied gang leader Gibson Kala.
In July 2008, while Tom’s forces were being pushed toward Bayelsa, Dagogo’s NDSF was called in to fight George’s Outlaws, who were still conducting kidnapping and bunkering operations — though unsanctioned, as far as Gov. Amaechi was concerned — in Port Harcourt and southern Rivers state. Amaechi lured Dagogo away from George’s control by promising protection in gaining a monopoly over bunkering and kidnapping operations in Rivers state. Cooperating with Dagogo was a gang leader named Egbiri Papa (aka Soboma Jackrich), whose gang became known as the People’s Liberation Force (PLF).
Dagogo and his patron in Port Harcourt did not remain on positive terms for long, however. In August 2008, the two had a falling out over a disagreement on kidnapping ransom money. A month later, units of the JTF attacked NDSF camps in Rivers state. (MEND blamed the move on Amaechi and Nigerian President Yaradua). Battles waged for a week between the JTF and NDSF before a ceasefire was reached. Two days later, JTF forces attacked NDV camps in Rivers state with inconclusive results. (Tom was not arrested, nor did he launch reprisals).
The government offensive continued. In November 2008, MEND accused the JTF and the Rivers state government of paying $3 million to NDSF insiders to assassinate Dagogo. The plot was uncovered and Dagogo survived the assassination attempt. Only marginal reprisals took place (some NDSF insiders reportedly were killed). Then in December, the JTF arrested PLF leader Papa, who had been a deputy to Dagogo. Papa was arrested on his way to peace talks in Rivers state arranged by Asari, who was nowhere to be found at the time of the arrest. In January 2009, the JTF conducted raids against NDV and Outlaws camps in Rivers state. (MEND said nothing specific about the raids against George’s Outlaws and mentioned only that the JTF attacked three communities in an unsuccessful attempt to secure the release of two British hostages.) According to an NDV spokesman, Tom’s forces called off threatened reprisal attacks following Clark’s intervention.
PIUS UTOMI EKPEI/AFP/Getty Images
Ateke Tom and the Niger Delta Vigilante, a gang with links to MENDBy early 2009, IOCs had hardened their office and residential compounds in Port Harcourt to the point where kidnapping operations seldom, if ever, occurred. Oil workers now traveled to exploration and production sites by helicopter to avoid the threat of being kidnapped while caught in traffic. When ground transportation was required, workers were moved in heavily armed convoys surrounded by protective details of Nigerian soldiers (whose competence is sometimes questionable). IOCs have essentially abandoned plans for large-scale investment in the Nigerian onshore sector, while the offshore sector still attracts widespread interest. Despite the threats, violence and costs of working in Nigeria, the quality and quantity of the region’s crude ensures that IOCs will remain active in Nigeria’s oil sector as long as the oil is there.
As it Stands Now
Today, Asari is the sole militia gang leader moving about openly in the Niger Delta without interference from the government. STRATFOR sources say he travels with a security detail of official Mobile Police (“Mopol”) officers, although he also probably relies on NDPVF loyalists for personal protection. (Mopol is a paramilitary unit of the Nigerian police that specializes in rapid response operations.) STRATFOR sources report that Tom, George and Dagogo, in contrast, are forced to sneak around the Delta to avoid being detained. Asari is working to re-establish his influence among his former deputies (who along with their followers make up MEND), but STRATFOR sources say his influence has yet to be consolidated. Asari’s former deputies are not so thrilled to see their independence and influence usurped by their old leader, and have not automatically accepted him back into the fold.
Odili, meanwhile, is no longer active in Rivers state politics, and STRATFOR sources say he splits his time between Abuja and South Africa. The ex-Rivers state governor received an immunity deal in March 2008 that protected him from prosecution and enabled him to keep the money he acquired during his governorship. The deal will likely last as long as he avoids interfering in or destabilizing Rivers state. Should he become active again he would likely be investigated by the Economic and Financial Crimes Commission and, if convicted of any kind of wrongdoing, put in prison and stripped of his wealth, which is precisely what happened to former governors Diepreye Alamieyeseigha of Bayelsa state and James Ibori of Delta state.
Alamieyeseigha, released from prison in July 2007 after serving two years, maintains a very low profile and a small degree of influence in Bayelsa state. According to MEND, his successor as governor, Goodluck Jonathan, now vice president, owes his current position to the militant group as a result of its 2006-2007 campaign. STRATFOR sources say Clark is a patron of Jonathan’s and that Asari is being controlled from Jonathan’s office.
Jonathan’s successor in Bayelsa state, Timipre Sylva, is kept on a very short leash by the PDP. Sylva’s 2007 election was challenged by the opposition Action Congress party, which filed an appeal with the appellate court in Port Harcourt. The court ruled that that no election actually had taken place and called for a new election. With backing by Vice President Jonathan, Sylva won the new election and remained in office. The ordeal was a reminder to Sylva that as long as he played by the rules, the PDP would support him. If he did not, then the PDP would find a way to reopen the court case or remove him from office in a less judicial manner.
Clark, too, could use a short leash in Delta state. Although incumbent Gov. Emmanuel Uduaghan maintains positive relations with Clark, the Ijaw chief initially held up Uduaghan’s nomination in order to extract loyalty from the Warri-based politician.
Former President Obasanjo left office in May 2007 to become chairman of the board of trustees of the ruling PDP party, a godfather position that would allow him to retain the power to reward his friends and punish his enemies.
Moving Forward
The next national elections in Nigeria will be held in April 2011. If tradition holds (and politicians play by the rules), incumbents will be nominated for a second term. Yaradua will be nominated as president; Jonathan will be nominated as vice president and Amaechi, Sylva and Uduaghan will be nominated as governors in Rivers, Bayelsa, and Delta states, respectively. Thus, national elections in 2011 will be no watershed and should not generate widespread violence. However, if Yaradua’s health prevents him from standing for re-election (he has had to travel abroad for medical attention several times since the 2007 election season), competition over who would fill his shoes will likely turn violent. Should Amaechi step out of line, his minority Ikwerre tribal status in Rivers state could be used to end his political career.< /p>
Considerable — though geographically concentrated — violence could occur if any candidate refuses to play by the rules (e.g., fails to acknowledge his patron or pay the money expected of him). An aspiring candidate could also trigger violence in order to carve out a political position for himself. The way to get attention in Nigeria is to become a big man, and the way to become a big man is to employ a militant gang to beat your rivals. Nice guys do not get very far in Nigeria.
LIONEL HEALING/AFP/Getty Images
Masked Niger Delta Vigilante militants at their campThe bigger battle will come ahead of the 2015 national elections, when the presidency is up for grabs. With tradition calling for northerners to rotate the presidency to another geopolitical zone, the Ijaw of the south-south Niger Delta will no doubt believe that what was denied them in 2007 should come their way in 2015. The 2007 vice presidency was a compromise; the Ijaw have their sights set on the presidency. Of course, other geopolitical zones will also be aiming for Aso Rock, so a battle for prominence and patronage will surely be waged to determine the officeholders in 2015. Given the campaign patterns in past elections, the action will likely begin in 2013.
In the meantime, Chief Clark will continue to play a leading godfather role as he maintains his influence among Ijaw youth, who can be quickly mobilized to achieve political aims. Politicians in the Niger Delta will pay homage to Clark, who in turn will pay homage to his network of senior Ijaw figures as well as PDP power brokers at the national level. Militant gang leaders like Tom, George and Dagogo will not be killed (if previous strikes against their camps are indicative of JTF capabilities) but will be kept around for use when their forces are needed. Until then, in times of lean patronage, they will carry out bunkering and kidnapping operations to support themselves. All the while, inter-gang violence will continue as Asari tries to rebuild his influence over the gang networks and as MEND faction leaders resist that influence.
The fact is that as long as there is sweet Nigerian crude to be extracted from the Delta, first tapped by the British in the late 1950s, there will be political and militant turmoil in the region. Tenuous understandings that keep tensions and violence to a manageable level will occur from time to time, as long as the Ijaw believe their political and financial stake in the region is assured. This is currently one of those times.
Meanwhile, some questions may have to go unanswered. Who is the “shepherd”? The weight of evidence (gained through open sources and STRATFOR human intelligence sources) indicates that MEND has an assortment of patrons at the state level that can activate various units for localized attacks. Our intelligence also suggests that at least one national-level politician (the sitting vice president) can activate MEND factions for larger, more centrally controlled operations. Is there one preeminent godfather? That would be the aging Ijaw patriarch Edwin Clark, though our MEND sources tell us he is not the so-called “shepherd” (who may be more than one person or who may not even exist). Another principal enabler is former President Obasanjo, who has been instrumental in allowing regional politicians to activate attacks against oil infrastructure and rival militant proxies to achieve his and their political goals.
Who the shepherd is does not really matter. MEND or its component factions will be a fact of life for the denizens of the oil-rich Niger Delta for the foreseeable future. Nigeria is a fledgling democracy with an economy wholly dependent upon crude oil. Until it matures as a nation-state with a more diversified economy, militant groups emerging, evolving and fighting each other and the IOCs will continue to make the Delta a dangerous place.
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MEND Part 2:
Nigeria's MEND: Odili, Asari and the NDPVF
March 18, 2009 | 1106 GMT
Summary
Print Version
To download a PDF of this piece click here.
The Movement for the Emancipation of the Niger Delta (MEND) has evolved in sync with Nigerian power brokers and politicians as they have fought for influence and wealth. And Nigeria’s wealth lies largely in Rivers state, where a rivalry between Ijaw Chief Edwin Clark and Rivers Gov. Peter Odili resulted in a declaration of war against the state of Nigeria by Ijaw youth leader Mujahid Dokubo-Asari. Having once worked closely with Asari and his Ijaw Youth Council, Odili decided to dump him in order to undermine Clark. Odili took the gloves off and Clark responded in kind.
Editor’s Note: This is the second part of a three-part series on the Movement for the Emancipation of the Niger Delta.
Analysis
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Special Series: Niger Delta Politics and Militancy
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Nigeria’s MEND: Connecting the Dots
Soon after Nigeria’s 2003 national elections, Rivers state Gov. Peter Odili sat back and assessed the situation. He had just been sworn in for his second term as governor of the leading oil-producing state in the Niger Delta, at the helm of a state government generating on the order of $100 million per month. It was not clear to Odili that a third gubernatorial term was even possible. Politicians were still charting their way in the new democratic Nigeria, which had just gone through its second election cycle. Although the constitution restricted elected officials to two terms, there was no guarantee that a strongman would not figure out a way around that. In any case, Odili had his sights on a higher office — either president or vice president — that would befit his growing stature as a political heavyweight in the Niger Delta.
Oil is Nigeria’s raison d’être, its only real form of wealth. The majority of Nigerian government revenues — and 95 percent of its export income — are generated by crude oil production. Ninety-five percent of Nigeria’s oil production comes from the Niger Delta; of that total, roughly 40 percent comes from Rivers state (Bayelsa and Delta states each contribute about 15 percent). Control over the oil provides tremendous advantages beyond short-term personal gain; oil-derived income finances a patronage network that ensures long-term loyalties upstream and down.
To achieve higher office, Odili — a member of the Igbo tribe, which is a minority in Rivers state but the dominant tribe in the neighboring south-east geopolitical zone — first had to break the political hold that Ijaw Chief Edwin Clark continued to have in the Niger Delta. Although Odili worked closely with Ijaw Youth Council (IYC) President Mujahid Dokubo-Asari during the 2003 elections (and had gotten Asari elected IYC president in 2001), Asari still had one foot in Clark’s camp. Asari’s divided loyalties weakened Odili’s grip on the levers of power in Rivers state — Asari could pass actionable intelligence on Odili to Clark for use against the Rivers governor. Maintaining a connection to Asari, and by extension Clark, was a price Odili could no longer afford to pay if he wanted to propel his own ascendancy within the dominant People’s Democratic Party (PDP).
Odili had to dump Asari and break from Clark without exposing himself to an Asari counterattack. To deal with Asari, Odili repeated a move from his 2001 IYC playbook (in which he had Asari elected president of the IYC in order to lure the group of marauding youth away from Clark and into his camp), this time luring away Asari’s deputy, Ateke Tom, in return for exclusive patronage.
When Asari held the IYC presidency from 2001 to 2003, Tom had been his deputy in charge of the Rivers state’s Okrika “axis” (a MEND term for the turf or territory it controls or is fighting to control). Tom’s gang was called the Icelanders and its turf stretched from Port Harcourt south to Bonny Island. Now Odili provided political protection to Tom while he waged war against Asari. For compensation, Tom was given free rein to take over illegal bunkering routes that Asari claimed for himself. Tom split from Asari and renamed his Icelanders the Niger Delta Vigilante (NDV), in part to improve his reputation following alleged Icelander atrocities. Based in the town of Okrika and the slums in and around Port Harcourt, the NDV hunted down Asari’s forces in Rivers state.
Neither Asari nor Clark took the news of Asari’s being dumped by Odili very well. For Clark to maintain his influence in the Niger Delta, he needed to keep Odili in check. Failure to respond to Odili could permit the Rivers state governor to become too politically powerful for Clark to contain. Odili had taken the gloves off, forcing Clark to respond in kind.
Click to view interactive image
By July 2003, Asari had transformed the IYC — an activist organization that had participated in some targeted violence — by adding a dedicated militant wing known as the Niger Delta People’s Volunteer Force (NDPVF). The IYC remained an activist youth organization promoting Ijaw interests throughout the Niger Delta while its militant wing, led by Asari, battled Odili’s proxy militia, the Tom-led NDV.
Fallout from the April 2003 elections carried into the summer as the NDPVF fought running battles against the NDV. In October, the NDV assassinated Onengiye Ofori Terika (aka Occasion Boy), Asari’s deputy in charge of the Tombia axis, located about a half-hour’s boat ride southwest of Port Harcourt. In addition to battling each other, the two militias fought for control over bunkering routes, the proceeds from which were used by their respective political patrons.
Despite the fact that Odili provided political cover for Tom’s forces during their assaults — police and military forces would stand aside during NDV operations — Asari’s forces maintained their positions and effectively fought back throughout 2004. In June of that year, the Rivers state government was forced to raise the stakes, deploying a state-level contingent of army, navy and police forces against Asari units. Fighting intensified, with battles waged not only in the creeks and villages of Rivers state but in the streets and neighborhoods of Port Harcourt. Combined forces of the NDV and the state security apparatus were unable to defeat the NDPVF, forcing the Odili government to request federal assistance. In response, army personnel comprising the Joint Task Force (JTF) were deployed in September 2004 in support of the NDV and state security personnel.
These combined JTF, NDV and state security operations against the NDPVF in September triggered Asari to declare “all out war” against the Nigerian state. Asari adopted Ijaw nationalist slogans to defend his attacks, saying that the Ijaw tribe and Niger Delta had been exploited for decades by corrupt Nigerian governments and that his group was fighting to control the resources in the region.
Ceasefire and Simmering Conflict
Asari’s declaration of war, igniting a conflict that threatened to spread beyond the control of Niger Delta politicians, caused global crude prices to hit $50 per barrel for the first time ever and brought Nigerian President Olusegun Obasanjo into the mix. In October 2004, Obasanjo called Asari and Tom to the Nigerian capital and negotiated a ceasefire. In return for disarming their militias and turning in their weapons, the federal government would pay militant leaders the equivalent of $1,000 per weapon and grant amnesty for any crimes committed. The Rivers state government promised to pay an additional $1,800 per weapon surrendered. It is not clear how many weapons were given up or how much money Asari received, but he returned from Abuja and proceeded to live an extravagant lifestyle in Port Harcourt, complete with mansions and the freedom to travel about in luxury SUVs, while still maintaining control of his militant group.
Political pressure was also exerted to rein in Tom’s forces. Tom himself was charged with murder in connection with a November 2004 attack on the member of an NDPVF-allied gang called the Greenlanders. Rather than give himself up, Tom pinned the blame on his deputy, Soboma George. In November 2004, George was arrested for murder and jailed in Port Harcourt. Tom’s betrayal of George would have repercussions. George was broken out of jail in June 2005 by a force led by then-NDPVF deputy Farah Dagogo. George went on to form his own gang, called the Outlaws, and joined Asari’s side in the struggle.
(click image to enlarge)
Meanwhile, pipeline sabotage and bunkering by the NDPVF and the NDV was becoming more common in the oil-producing states, and more burdensome for the oil companies. They would patch up critical pipelines and abandon those that were less critical, which reinforced grievances among grassroots supporters of militants that the foreign oil companies did little more than pollute the local communities. Oil companies also would continue to pay protection money to local chiefs and youth organizations, which would reinforce the perception of a corrupt relationship between the companies and authorities at all levels, which in turn would justify the militancy and violence.
By 2005, President Obasanjo still had his sights on amending the country’s constitution so that he could be allowed a third term in office. Obasanjo’s efforts were blocked, however, by the Nigerian senate in May 2006. Vice President Atiku Abubakar had been instrumental in mobilizing politicians to defeat the Obasanjo amendment. Atiku, a Muslim from the northeastern Adamawa state, had ambitions himself for the presidency, and Obasanjo interpreted his maneuvering as a betrayal, which led to Atiku’s being marginalized within the ruling PDP.
Atiku did not abandon his presidential aspirations, however. The Nigerian vice president sent out feelers to the opposition Action Congress (AC) party to gauge his chances of becoming its presidential candidate. Knowing that running a successful presidential campaign requires a deep network of supporters and funds, Atiku then turned his eyes toward the Niger Delta.
While Atiku was looking for routes to a presidential nomination, he reached an agreement with Bayelsa state Gov. Diepreye Alamieyeseigha. The governor had been a pro-Obasanjo member of the PDP since winning office in 1999, but the lure of a possible vice presidential slot on Atiku’s ticket was an offer too good to refuse. Alamieyeseigha ran his state as a personal bank account and the corruption was ignored — until his switch to Atiku. The federal Economic and Financial Crimes Commission (EFCC) began to investigate Alamieyeseigha, and in September 2005 he was detained in London on money-laundering charges. In December 2005, Alamieyeseigha was impeached, imprisoned and replaced by his deputy, Goodluck Jonathan. As a result of the Atiku/Alamieyeseigha saga, the EFCC became a useful tool for the ruling PDP to destroy its own as well as opposition politicians who run afoul of the established hierarchy.
Government authorities also pursued Asari, who was arrested in September 2005 on treason charges following statements he made at a conference, calling for the disintegration of the Nigerian state. Asari’s trial lasted two months, and in November 2005 the NDPVF leader was sentenced to prison, where he served 18 months (even though he was never technically convicted of treason).
Looking Ahead to 2007
Although Obasanjo failed to gain a third term as president, he was not about to back down easily. The two-time civilian president (Obasanjo also ruled Nigeria as military dictator from 1976 to 1979) needed to ensure that he would be safe from prosecution for any crimes committed during his administrations (accusations leveled at Obasanjo included economic malfeasance and human rights violations) and to ensure a financially comfortable retirement. Obasanjo needed a successor who would be beholden to him so that Obasanjo could continue to play a kingmaker role in the ruling PDP.
In 2005, looking ahead to the 2007 national elections, state politicians began jockeying for the presidency. With a rival (though junior) governor — Alamieyeseigha — sidelined after being imprisoned and with militia leader Asari imprisoned, Odili could make a serious run for the office. But having Odili ensconced at the Aso Rock presidential compound in Abuja would be too much of a threat to Ijaw Chief Clark. Odili was already a powerful politician in the Niger Delta as governor of the leading oil-producing state, but he was not an Ijaw, and Clark considered him a usurper. As president, with even more money and patronage at his finger tips, Odili would become too powerful for Clark to control. In a region (and country) where turf and influence are matters of life and death, seeing Odili at Aso Rock was a vision that Clark simply could not bear.
It is not clear whether Clark himself had ambitions for the office. He probably did not, given his age (he would be 75 in 2007) and preference for working behind the scenes. In any case, Clark soon envisioned a politician of his own at Aso Rock. The Niger Delta was too important a region not to have a secure stake at the highest levels of government. As one of the country’s six official geopolitical regions, the south-south zone, encompassing the Delta and its Ijaw majority, had never produced a Nigerian president, and Clark believed the time to do so was now.
Next: A different militant movement
MEND Part 1:
Nigeria's MEND: Connecting the Dots
March 17, 2009 | 1113 GMT
Summary
Since 2006, a little-known militant group in Nigeria’s oil-rich Niger Delta has made life difficult for international oil companies in the region. The Movement for the Emancipation of the Niger Delta (MEND) has attacked oil-field infrastructure, kidnapped foreign workers and stolen oil and sold it on the black market. Enriching itself and others in the process — and contrary to the image it tries to convey — the group is not exactly a band of freedom fighters. An in-depth STRATFOR investigation has revealed ties to the Nigerian political establishment and a lineage that begins with the end of military rule in 1999.
Editor’s Note: This is the first part of a three-part series on the Movement for the Emancipation of the Niger Delta.
Analysis
Nigeria is the largest producer of crude oil in Africa and the fifth-largest supplier of crude oil to the United States. (One of its blends, called “Bonny light” after a town and oil port in Rivers state, is highly valued because of the ease with which it can be refined into high-quality gasoline.) Nigeria’s oil output, however, has been reduced 20 percent over the last two years by the activities of an indigenous militant group that the world knows very little about. In 2006 and 2007, attacks on oil infrastructure in the Niger Delta by the Movement for the Emancipation of the Niger Delta (MEND) contributed to a spike in global oil prices — and to Nigeria’s placement high on the list of countries critical to U.S. energy security.
For all its influence on oil prices, MEND has played its cards close to its chest. Its name denotes a liberation army fighting to free the people of the densely populated Niger Delta, Nigeria’s main oil-producing region. But MEND seems more focused on making life difficult for — and profiting by — international oil companies (IOCs) operating in the Delta than on resisting the government in Abuja. Often, MEND refers to a mysterious “shepherd” and to itself as “sheep obeying orders,” listening to the shepherd’s voice for guidance on such matters as when and where to attack. Typical targets, owned and operated by such IOCs as Royal Dutch Shell, Chevron, Agip, Gazprom and Total, include pipelines, flow stations and loading platforms. MEND makes money by kidnapping for ransom and by illegally “bunkering” crude oil. (By definition, bunkering is the supplying of fuel or oil to a ship, but in southern Nigeria it has come to mean the illegal process of tapping into pipelines, stealing the crude and selling it on domestic and foreign black markets.)
That much is known about the group. It is also clear that MEND is not exactly a band of freedom fighters. Although it has tapped into a flowing spigot of oil money in the Delta, little of this cash has been redistributed to the people of the region. The group actually appears to have ties to the Nigerian political establishment, ties that are known but have never been clearly diagrammed. Who is the shepherd? How closely is he tied to Nigeria’s government? Are there other patrons who can deploy MEND to do their bidding? How do its patrons intend to employ the militant group in the coming years, particularly leading up to local, state and national elections in 2011?
STRATFOR set out to answer these questions (and more) in hopes of better understanding MEND’s origins, makeup and methodologies — and how it could continue to exert its influence on global oil supplies and prices.
A Mobilized Ijaw
In May of 1999, after almost 40 years of nearly continuous military rule, a group of politicians and former members of previous military regimes came together to form a new Nigerian government. This formation occurred at all levels throughout the country — local, state and national — and was the result of the first democratic elections that had not been annulled in Nigeria since the country gained its independence from Great Britain in 1960. It was truly a transitional era, offering hope and liberation from decades of oppressive military rule.
Click to view interactive image
It was also a mad scramble for power as politicians of all stripes joined under the banner of the People’s Democratic Party (PDP) — the country’s dominant political party — to compete for assembly seats at the local, state and national levels. Compared to the PDP, other Nigerian political parties were inconsequential, but the PDP would take no chances. In the oil-rich Niger Delta, the tribal Ijaw organization, the Ijaw National Congress (INC), mobilized to influence the selection of candidates in the region. Representing the ethnic majority in the Niger Delta, Ijaw tribal Chief Edwin Clark, also the leader of the INC, had been appointed to the junta’s Federal Executive Council as information minister in 1975 and served on the council with then-Gen. and later President Olusegun Obasanjo. Having seen the region ruled by non-Niger Delta appointments made by military juntas, Clark maneuvered behind the scenes in Abuja and the Delta selecting candidates wh o were natives of the Delta and who would be beholden to him as officeholders. (Sixty-seven years old in 1999, Clark preferred to leverage his long-standing experience and influence from behind the scenes rather than hold an official state office.)
In December 1998, to help impose INC selections in anticipation of the April 1999 elections, the INC created the Ijaw Youth Council (IYC). Composed of young, largely unemployed men and headquartered in Yenagoa, Bayelsa state, the IYC was deployed mainly to coerce votes for PDP candidates. Non-PDP candidates and their supporters were cajoled, threatened or killed if they seriously challenged PDP candidates. IYC members also began bunkering crude oil from IOC installations, keeping a small portion of the proceeds for themselves and funneling the rest to local and regional PDP representatives, who used the money to buy votes and support.
Flush with bunkering revenue and deploying bands of armed, marauding youths, the PDP swept the 1999 state governorship positions in the Delta as well as the national presidency (governors James Ibori in Delta state, Diepreye Alamieyeseigha in Bayelsa state and Peter Odili in Rivers state and President Obasanjo in Abuja; although 10 states technically comprise the Niger Delta, these three are the dominant oil-producing states). The PDP permitted the IYC to continue its illegal bunkering operations as payment for the services it performed for the PDP during election season.
Political Rivalry in Rivers State
By June 2001, a rivalry had begun between Ijaw Chief Clark and Rivers Gov. Odili, whose position as governor of the region’s largest oil-producing state gave him control — with little transparency or oversight — over an annual budget of almost $1 billion (along with his government’s stake in illegal bunkering). The level of Rivers state revenues and those of its capital, Port Harcourt — hub of the entire oil-producing region — made Odili the Delta’s most powerful elected politician while Clark continued to pull the strings behind the scenes. Now that he was in the seat of power, Odili resented the challenge to state authority posed by the Clark-led INC and its activist wing, the IYC. While he was indeed a powerful politician in Rivers state, Odili was not an Ijaw. He was born into the minority Igbo tribe, the dominant tribe in the country’s “south-east geopolitical zone” (one of Nigeria’s six administrative regions; the Ijaw are the dominant tribe in the south-south zone). The fact that Odili’s tribal heritage was not Ijaw did not necessarily restrict his political power — oil income and PDP patronage gave him all the influence he needed.
Moving to undermine the INC/IYC in Rivers state, Odili used his influence in the summer of 2001 to elect a new IYC leader, Mujahid Dokubo-Asari, one of the founders of the group (succeeding IYC president Felix Tuodolo). An ambitious and charismatic youth leader from Buguma town, located west of Port Harcourt, Asari repaid Odili by deploying IYC activists in Rivers state to conduct illegal bunkering operations and engage in political intimidation on behalf of Odili and against rival PDP politicians.
Asari’s youth activists became Odili’s private paramilitary force in Rivers state, although Asari and the IYC did not work exclusively for Odili. With his IYC credentials and armed cadres in other Niger Delta states, Asari still commanded influence throughout the oil-producing region and continued to work for Clark and his loyalists who were in positions of authority in Delta and Bayelsa states (outside of Odili’s jurisdiction). IYC activists were deployed again ahead of the April 2003 national elections to wage a low-intensity war against rival candidates, and governors Ibori (Delta), Alamieyeseigha (Bayelsa) and Odili as well as President Obasanjo were all re-elected on the PDP ticket.
Despite Odili efforts to control INC/IYC operations in Rivers state, there was no immediate breakdown in the broader political machinery, since attention was focused on winning the 2003 elections. These elections were intended not so much to transfer power from incumbent to successor as to consolidate the PDP lock on elected positions throughout Nigeria. Elected officials playing by the PDP rule book (which calls for them to simply pay up and not double-cross their patrons) received support for a second term. Chief Clark remained a kingmaker in the Niger Delta, and although Odili had an agenda apart from INC/IYC’s, he played his part by ensuring that the state helped fill government and PDP coffers as well as the purses of individual politicians.
Next: Odili, Asari and the NDPVF
Tell STRATFOR What You Think
Johnny: @ $42.00 a barrel - $8.00 for production cost = $34.00 x 50% JDZ tax for their share = $17.00 in gross profit for oil companies, less $5.00 in oil company overhead cost = $12.00. Wallstreet only gives 50% of that number to allow for price movement up or down at present price trends, So $6.00 is a fair value for proven reserves in todays market.
Have a nice day
Sneak
Ruby: .83 cents per share for every 100 million barrels of proven reserves for ERHE.
Majic: I just finished reading a three part series of articles about MEND and how they operate politically. I will try and post them on monday.
ssp119, Thank you for posting about pre-salt in the EEZ. It was me.
Do not take the Red Chip assumptions to heart. ERHE has been Kicked around and talked down more than George Bush in the nine years I have owned this stock. ERHE gets treated like the MUD-DOGS from the Waterboy Movie. As soon as the Game Starts (Drilling Results)ERHE will kick some AXX.