Record oil prices are affecting stability and security around the world in some unexpected ways and not always for the better.
In Nigeria’s oil-rich Niger Delta region, rising oil incomes have led to what one analyst calls an “unfortunately sustainable stalemate” between government forces and well-armed rebels. Neither is strong enough to crush the other, and neither feels under any pressure to concede ground.
Although money is flowing into state coffers, Nigerian government forces have not been able to prevent a steady shut down of land-based oil production. Rebels from the Movement for the Emancipation of the Niger Delta (MEND) have launched five attacks on oil facilities in the Niger Delta since it resumed a campaign of violence in April. The attacks have forced Royal Dutch Shell to cut output by more than 164,000 barrels of oil per day (bpd). MEND also said it attacked Shell facilities in southern Bayelsa state on Saturday, which caused an oil spill and forced the company to cut production.
Nigeria has had to shut down more than half of its total oil output following rebel attacks and a workers' strike, thereby risking its position as Africa's top oil exporter to Angola. The Niger Delta is the heart of Nigeria's oil industry, which exports around 2.0 million bpd.
Rebels in the Delta have been fighting government forces since 2006 to demand a greater share of the region’s oil output. They have kidnapped western oil executives and their families, attacked oil installations, and clashed with government troops. The government of President Umaru Yar'Adua has maintained a strong military presence in the region, fueling accusations of human rights abuses and deepening resentment among the local population.
“There is a fundamental problem, which is that there is an unfortunately sustainable equilibrium in terms of the conflict,” said Peter Lewis of Washington D.C.’s School of Advanced International Studies at a conference in Washington. He said that even though half of Nigeria’s oil production is now shut down, the government is not under economic pressure to make concessions that could end the unrest.
“With oil at $120 a barrel, with $50 billion-$60 billion in foreign reserves, a budget surplus, and the naira appreciating against the dollar, shut-ins are tolerable,” said Lewis. The oil companies are also sufficiently profitable that they can “handle” a loss in output from Nigeria. Global oil markets are responding to unrest in Nigeria by driving prices even higher.
Rebels and government forces are also in a military stalemate. Federal forces and militias are “evenly matched,” said Lewis. Rebels have rocket propelled grenades, missiles, machine guns, and bazookas in their arsenal. Worse still, powerful local governors are defying the authority of the federal government in Abuja by raising and paying for local militias as they build up their own local fiefdoms. “It’s very difficult to see how Abuja can get a grip on this,” said Lewis.
Local people are indifferent to the political struggle, said Dafe Ideh, a former Delta resident now living in the United States. “People are too worried about putting food on the table to think about politics or the rebels,” he said. He said finding work is their only priority. “Thirty percent of the people can get work in the oil industry but 70 percent can’t, so they are poor.”
Nigeria is relying on offshore oilfields for a growing share of its output, which government officials believe will be easier to defend from rebel attack than land-based wells. “But it’s foolish of them to think that [rebels] can’t hit those offshore facilities,” said Darren Kew, a Nigeria expert at University of Massachusetts -Boston. He said the U.S., the U.K., and the United Nations all need to get involved in naming and supporting an international mediator to end the conflict. “There’s a window open until the beginning of 2010 when electioneering will start for the next presidential elections,” he said.
For that to happen, the government must also come to terms with local organizations, said Judy Asuni ,a veteran Nigerian-American civil rights campaigner in the Delta.
“The government sees civil society as the enemy,” she said, "but people on ground need to be involved in their own security.” She warned that recent data on the inflow of arms into the Delta is “horrifying.” For peace to come to the Delta, she said, the political “environment has to change.”