There Are Increasing Signs of Emerging Unease in Nigeria’s Oil Region, Intelligence Report Says

74

Intelligence report from Nigeria Politics and Security by Menas Associates, a political risk consultancy says there are increasing signs of emerging unease in the country’s oil-producing Niger Delta region which could impact production and peace.

The report says on November 14 the traditional Nembe Kingdom chiefs from Bayelsa State’s Nembe Local Government Area demanded the revocation of the operating license of the indigenous Aiteo Group.

They accuse Aiteo of neglecting the needs of the community since it took over the wells from Shell Petroleum Development Corporation (SPDEC) five years ago.

However, on its Libya Focus, Menas says the September ending of the nine-month long blockade of the country’s oil sector infrastructure by Khalifa Haftar’s self-styled Libyan Arab Armed Forces (LAAF), and the National Oil Corporation’s (NOC) subsequent lifting of force majeure, is seeing oil production rebound very quickly.

Although it took a while for operations to resume at some of the facilities which were badly damaged by the blockade, by mid-November total production rapidly rose to reach 1.215 million b/d which has been a very pleasant surprise.

This good news was further reinforced this November when an agreement was struck on unify and professionalising the Petroleum Facilities Guard (PFG).

The latter has long been a source of friction. It comes under the command of the Ministry of Defence but has traditionally been made up of a hotchpotch collection of military units, militias and armed groups. For example, its central branch mainly comprises members of the large Margharba tribe which dominates the area.

Memorably, in the summer of 2013, the PFG’s Central Branch commander, Ibrahim Jedhran, who is from the Marghaba tribe, forced the shutdown of the oil ports in the Oil Crescent for over a year in order to meet his political demands. Although Jedhran was eventually ejected and disowned by his tribe, the PFG remains in the hands of the Marghaba.

When the country split into two competing authorities in 2014, the PFG effectively split into those elements who are affiliated to the LAAF and those that are affiliated to the internationally recognised Government of National Accord (GNA).

However — with the LAAF having subsequently taken control of most of the areas where the oil sector infrastructure is located — most of the PFG are now operating under the LAAF.

By contrast, the guard’s administration is located in Tripoli which has frequently been slow to pay salaries, and completely blocked salaries from going to the east following the LAAF’s imposition of its oil blockade in which its PFG was complicit. This has proved a major source of tension between those in eastern and western Libya.

Meanwhile, the NOC’s Chairman, Mustafa Sanalla, has long called for a reorganisation of the PFG. One of the reasons he refused to re-open the Murzuq Basin’s important 300,000 b/d capacity Sharara oil field after protestors who had staged a shutdown of the field agreed to re-open it in December 2018, was because of his frustration with the PFG which helped facilitate the shutdown.

At the time Sanalla demanded that the guard be replaced. However, the issue was never dealt with because the LAAF took control of the Sharara oil field in early 2019.

Meeting in Brega

One of the stipulations of the 23 October ceasefire agreement struck by the 5+5 Joint Military Commission (JMC) was the launching of a process to restructure and reorganise this troublesome force.

On November 16, this unification process kicked off with a meeting that was held at the headquarters of the NOC’s Sirte Oil Company subsidiary in Brega port and facilitated by UNSMIL and the NOC. It was attended by the eastern and western commanders of the PFG, as well as Sanalla and UNSMIL’s acting head, Stephanie Williams.

The meeting, which Sanalla described as ‘a historical opportunity’ that would send the world an important message about the stability of Libya’s oil sector was deemed to have been successful. Both commanders expressed their readiness to work together and said they had already started co-ordinating with the aim of ultimately working as a single, unified body.

Oil Protection Force

The participants agreed that the PFG will change its name to the Oil Protection Force and administratively will come under the control of the NOC. It will comprise a mix of military personnel and civilians, with the latter including technicians and experts.

According to Sanalla, the force will be equipped with modern technology, radars and monitoring equipment. It will provide protection for oil workers and oil facilities and will help stabilise oil production, which Sanalla stressed would help encourage the return of foreign investors and oil companies.

The participants also agreed to launch a pilot project in the form of a model security unit that will be dispatched to the new Erawin oil field in south-west Libya. It is due to be inaugurated next year and will be operated by NOC’s Sebha-based Zallaf Libyan Oil & Gas subsidiary which was established to develop reserves that have been discovered but not yet brought to production.

Participants similarly decided to continue discussions and will meet again in Zawiya. However, there was no move at the Brega meeting to decide who will head the new Oil Protection Force. Sanalla told the media that no names had been discussed but did say that the new chief will be from the NOC and could come from either the east or the west.

The meeting is clearly another positive development for Libya as it tries to set itself back on the path to peace. While there will undoubtedly be bumps in the road in this reunification process — including over who will head the new guard — so far, the signs are positive.

Although Sanalla’s vision for the force is probably somewhat over-ambitious — especially given the NOC’s lack of funds and the fact that Libya is still effectively under de facto division — it at least offers the prospect of some stability in oil production which can only be good for the country’s oil sector.

In the mean time, artisanal gold mining in the North-West’s Zamfara State is another issue increasing tensions in the Niger Delta.

The Pan Niger Delta Forum (PANDEF) — which claims to represent the interest of the region — has accused the Federal Government of double standards for allowing the Zamfara State government to sell gold bars mined in the state but not allowing the Niger Delta people to sell crude oil produced in their region.

PANDEF called on the government to practice fiscal federalism and allow states to mine solid and other minerals in their region while they pay taxes to the Federal Government. It said that allowing Zamfara to mine gold is a breach of the constitution under which only the Federal Government can control mineral resources.

Under a scheme introduced early this year the state government has set up buying points at which artisanal miners — most of whom were previously mining gold illegally — are now allowed to sell the gold to government buyers who then refine it and sell it to the Central Bank of Nigeria (CBN). Last month the government sold ₦5,000 million ($13.14 million) worth of gold bars to the CBN, raising questions about the legality of the sale.

Critics questioned the sale and noted that all minerals already belong to the federation and that any sale should not accrue to the state but should be paid into the Federation Account and then shared equally in the same way that oil revenues are shared across the country. Some from the Niger Delta have also argued that the illegal crude refiners in the region should get the same treatment as Zamfara’s artisanal miners.

The Federal Government thought that formalising illegal artisanal gold mining was a good idea, but it has raised serious constitutional questions that need to be urgently answered or it will increase the tensions in the Niger Delta.

Many see it as another illustration of the perception that, while the Niger Delta’s oil is shared nationally, every other region keeps its own resources. The government has argued that, like private sector firms, the Niger Delta states can bid for licenses to produce and sell the oil.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here