Oil Firms Spent $3.7bn on Security in N’Delta
By Ejiofor Alike, 02.02.2009
Oil companies operating in the country jointly spent an estimated $3.7 billion on the security of their workers and installations against attacks by militants and other criminal elements in the Niger Delta in 2008, THISDAY’s investigation has revealed.
Some security contractors, who spoke to THISDAY last week during the Offshore West Africa (OWA) conference in Abuja, said the escalation of the crisis in the Niger Delta had jacked up security expenditure in the area.
It was gathered that the security situation has become so precarious that oil companies insist on heavy military presence to carry out their operations, while oil and gas workers are resigning their appointments to avoid persistent militant attacks.
However, some stakeholders have argued that if the money being set aside for security is invested in infrastructure, it will reduce militancy and criminality in the oil-rich region.
Addressing chief executives of oil companies in Lagos at the weekend, Mini-ster of State for Niger Delta, Chief Godsday Orubebe, lamented that the money spent on securing pipelines and oil workers through the Joint Task Force (JTF) and other security operatives was enormous.
“If that money is genuinely ploughed into employment generation, it will go a long way in solving the problem of militancy. A situation where only one person is a millionaire in a population of one million is dangerous,” he said.
Orubebe wondered why the oil companies could only employ 2,000 people, while the Nigerian National Petroleum Corporation (NNPC) has around 10,000 workforce.
Country Security Manager, Addax Petroleum Nigeria, Mr. Dennis Amachree, who was silent on the security expenditure for 2008 at the conference, however, admitted in a reamrk that the oil industry jointly spent $3.5 billion on security in 2007.
The Addax security boss, who is also the Chairman of the Oil Producers’ Trade Section (OPTS) Sub-committee on Security, further stated that the industry also lost $3 billion to production shut-in in 2007.
OPTS is the association of oil-producing companies operating in Nigeria.
“PENGASSAN (Petroleum and Natural Gas Senior Staff Association of Nigeria) is saying that its members might stop work if the security situation does not improve. If people are just being kidnapped so that oil companies can negotiate for their release, the situation would have been different, but the problem is that they are being killed. The situation is being worsened by some people who want it to continue because they are benefiting from it. Some people see it as a big enterprise but all of us have a collective burden to end it,” Amachree said.
According to him, the industry recorded 31 maritime attacks in 2007, while the number of attacks recorded between January and October 2008 stood at 66.
Amachree also lamented that within the first nine days of 2009, the country’s oil industry recorded 13 attacks.
Chairman and Managing Director of ExxonMobil, Mr. Mark Ward, also spoke on the security challenges facing oil companies operating in the country
He said: “Our industry has proven time and again that it will accept reasonable risk, even for projects that require massive, multi-billion dollar investments that take decades to pay out.
“But only if measures are taken that allow us operate in a secured environment. Escalating incidents of kidnapping, piracy and other violent attacks on both personnel and facilities offshore Nigeria creates concern and should continue to receive priority attention from government.
“Suffice to say that when governments provide a secure environment, additional investment is encouraged and the IOCs will focus on developing and applying new technologies to meet operational challenges.”
A security contractor in one of the companies had earlier told THISDAY that criminality had taken over the activities of the various armed groups that started as a fight for resource control.
“The companies have both armed and unarmed security operatives in and around their facilities. The armed operatives are seconded from government agencies; they are here to protect our people and installations but they don’t take directives from us. The unarmed security personnel are provided by our security contractors. We also have representatives of our global security to ensure that the local security measures that are put in place conform to international standard,” he said.
However, an Ijaw youth leader, who spoke to THISDAY, said the militarisation of the oil-rich region is not the solution to the crisis.
“There has been increased militarisation of the Niger Delta since 2003 but from Amachree’s statistics, militancy has also been on the increase. So, militarisation seems not to be the solution,” he said.
Increasing security expenditure in the region is also coming on the heels of what some stakeholders called decreasing government’s proposed expenditure for the oil-rich region in 2009 budget.
Out of the 2009 budget, government plans to spend N77 billion on infrastructural development of the Niger Delta, while securing oil workers and installations gulped $3.8 billion (N432.9 billion) in 2008.
Niger Delta Peace Ambassador, Chief Beinmonyo Rufus Spiff, said the money was not enough for the developmental projects yearning for government attention in the area.
Spiff, who is the Chairman and Managing Director of River Creek Specialist Limited, also challenged the government to define the projects it plans to execute with the money.
“The money is not enough; they should define what and what they are going to do with the money. Can the money build a road from Yenagoa to Brass or Kaiagama? Can it build a road from Warri to Forcados or from Buguma to the Swamp area? Let them define what they want to do and they will find out that it is not enough. If NDDC (Niger Delta Development Commission) alone is getting N84 billion in 2008 and the mother ministry (Ministry of the Niger Delta) will get N77 billion in 2009, definitely, that money is not enough,” he said.
