Kidnappings: FG Ready to Give Communities Oil Stakes
By Chika Amanze-Nwachuku with agency report, 03.17.2009
The Federal Government plans to give communities in the Niger Delta region stakes in oil projects to discourage attacks that have partially crippled Nigeria’s crude oil production.
Presidential Adviser on Petroleum Matters, Mr. Emmanuel Egbogah, who made the disclosure in Cape Town, South Africa, yesterday, said the stakes would come from the government’s own holdings in the projects.
According to him, government believes that if indigenes of the region become stakeholders in the oil projects, the incidence of attacks on oil installations and abduction of oil workers would be minimised.
“We have the latitude to give them stakes. The property will be theirs so they will have no reason to encourage attacks,” he said.
Nigeria has the largest hydrocarbon reserves in Africa and is the fifth-biggest supplier of oil to the United States.
But the unabated crisis in the oil-rich region has continued to take its toll on the country’s crude oil production and revenue, as about one million barrels per day of production are currently shut in.
The main militant group, the Movement for the Emancipation of the Niger Delta (MEND), has been agitating for control of oil and gas resources in the region.
The group claims to be fighting for the region’s poor who are yet to benefit from its oil wealth. However, the situation has assumed a criminal dimension as armed groups now kidnap oil workers, hijack vessels and then demand ransoms from oil companies.
THISDAY learnt that attackers often warn their victims and their employers not to disclose that they parted with huge amount of money before they regain their freedom.
Last weekend’s attack by suspected militants on a Chevron’s 16-inch Makaraba-Utonana pipeline has forced the company to shut in some 11, 500 barrels from its Makaraba platform in Delta State.
A Reuters report quoted Colonel Rabe Abubakar, spokesman for the military taskforce in the western Niger Delta, as saying that the attack resulted in leakage into four communities in the area.
Abubakar said the attackers were believed to have defected from the camp of Tompolo, a militant leader based in Delta State that had suspended attacks on oil sites.
The group, he said, had threatened to continue with their attacks on installations and facilities unless they receive gratification from the multinationals.
Chevron, the report said, is currently assessing the situation and has reported the incident to relevant government agencies.
Prior to the escalation of the crisis in the region in 2006, Nigeria produced about 2.5 million barrel per day, but violence in the region has reduced production to about 2.2million.
Royal Dutch Shell, the worst hit, was producing about one million barrels of crude oil per day, but attacks have reduced the company’s production to about 400,000 barrels per day.
Recently, the company was forced to shut in about 180,000 barrels per day owing to renewed attacks on its facilities.
The recent shut in means a further reduction in Nigeria’s production, a development which translates to revenue losses for the country.
Nigeria earns over 90 per cent of its foreign income from crude exports. Nigeria had benchmarked its oil at $45 a barrel in the 2009 Budget and the new price of the crude which hovers around $40 per barrel is less than $5 above the budget target.
It is feared that the upsurge in violence in the region, and the falling prices of crude oil in the international market owing to declining world oil demand occasioned by the current global meltdown may deter the country from achieving its vision 20-2020 target.
THISDAY had reported that oil-producing companies operating in the region suspended further redeployment of expatriate staff in the area until normalcy returns.
Oil services companies were also said to have been vacating the region to other sister countries following the recent threat by MEND to lunch swooping attacks on companies operating in the area.
