Global Ripples from the Niger Delta

On June 19, militants affiliated with the Movement for the Emancipation of the Niger Delta (MEND) launched their most audacious attack to date on the West African country's petroleum infrastructure, traveling some 60 nautical miles in speedboats to hit a giant floating production, storage, and offloading (FPSO) vessel operated by Royal Dutch Shell's joint venture, the Shell Petroleum Development Company of Nigeria. The assault caused the company to shut down work for more than a week throughout the Bonga oilfield, Nigeria's biggest offshore facility and the source of some 220,000 barrels of oil (approximately 10 percent of the country's crude production) and 150 million cubic feet of natural gas per day.

Hours after the attack at sea, youth aligned with the militants blew up a crude pipeline near Abiteye-Olero on the mainland that connected from Chevron's Escravos field in Delta State. The breach forced the San Ramon, California-based energy company's Chevron Nigeria subsidiary to declare “force majeure” and halt petroleum production on another 120,000 barrels per day. Not surprisingly, crude prices closed that week at $134.62 a barrel on the New York Mercantile Exchange. Last week the same barrel was selling for $145.29 as the market closed for the Independence Day holiday (in London, Brent crude closed at $146.49 on Friday).

In short, the twin attacks underscored the fact that Nigeria's vast proven reserves, estimated to amount to at least 36.2 billion barrels, are being held virtual hostage by a long-simmering conflict and that, as I noted in this column nearly two years ago, “while the absolute amount of damage caused so far is relatively small, today's global markets are such that the impact of even minor disruptions can be significant.” Or, as a study quoted in that piece observed, “U.S. national security and energy security are inexorably intertwined, particularly when considering the multiple state and non-state actors who can wreak considerable havoc on our economy based solely on our significant dependence on foreign oil.” Regrettably the observation I made at the time is even more applicable today:

Despite all of this, the little attention that has been focused in this country on the growing challenge posed by MEND and similar groups operating in the Niger Delta has been rather surreal, with debates among policymakers, scholars, analysts, and activists over whether the militants are upset at the oil majors, the Nigerian federal government, state and local authorities, or all of the above. From a national security point of view, this discussion is rather academic since the final impact on global markets – and thus the U.S. economy – remains the same regardless of who is at fault because of profit-taking or what the causalities of the terrorism are.

The various attacks to date have been by locals, albeit with increasing tactical sophistication as the hit on the Bonga FPSO highlighted. Nonetheless, cumulatively they have kept some approximately one-quarter of Nigeria's petroleum production capacity of more than 2.5 million barrels offline and cost the West African country its standing as Africa's biggest oil producer (Angola pumped 1.94 million barrels of oil a day in May, compared to Nigeria's 1.9 million barrels – and the latter figure was before the June attacks). The fact that Nigeria, whose crude tends to be characterized by high American Petroleum Institute (API) gravity and low sulfur content (that is to say, it is the “light” and “sweet” oil which helps meet the environmental standards in place in the United States), is producing so far below capacity is costly not only to it, but to the rest of the world.

Furthermore, as I have argued in this column – and this was when oil was still selling at $66.25 a barrel – international terrorists are not oblivious to the economic impact of energy prices on the strategic positions of the United States and its allies. Hence, with “the global market is so tight that any shocks caused by cuts to production or supply would be devastating economically,” if “Osama bin Laden is serious about waging economic war against the United States – and, from his record, there is no reason to dismiss his pronouncements out of hand – and if his minions heed his advice about hitting one of America's vital arteries, then we can expect at some point a maritime threat, most likely to West African production facilities.” I subsequently pointed out some indications that foreign Islamist extremists and other violent forces have sought entrée into Nigeria's troubled Delta region.

Going further, an Israeli colleague, Dr. Moshe Terdmann of the Project for the Research of Islamist Movements (PRISM) of the Global Research in International Affairs (GLORIA) Center at the Interdisciplinary Center Herzliya, concluded in a study published in the January 2007 issue of the Islam in Africa Newsletter that MEND is, in fact, “al-Qaeda's unlikely ally in Nigeria,” noting that:

The most threatening effect posed by this increased violence in the River Delta against government facilities and foreign oil companies is the potential for a goal-oriented alignment between MEND and the radical Islamists abroad. This is not to say that radical Muslim groups will recruit members from MEND or vice versa. Instead, MEND may provide inspiration to radical Islamic groups who are witnessing its success, even through the jihadi forums. Damaging America's economy via targeting the oil industry has long been one of al-Qaeda's missions. If MEND continues to be successful in targeting and hurting Nigeria's oil economy, it is entirely possible that future successful attacks may give rise to other attacks conducted by terrorist organizations across the globe.

Furthermore, as I outlined last year, the overall risk is heightened by the particular vulnerabilities of Nigeria's oil infrastructure as well as by the systematic corruption and outright theft of oil shipments in the Niger Delta (see my piece last June on “Securing the New Strategic Gulf”). The most remarkable thing about the MEND attacks in June was that they also exposed the startling incompetence of the Nigerian military and security services which are usually held up by some diplomats and policy wonks as models of regional capacity. Consider that the militants, up to now thought to be land-bound, not only crossed some 110 kilometers of open sea – thereby effectively demonstrating that none of Nigeria's oil installations was beyond their reach – but did no without being so much as detected, much less challenged by the Nigerian Navy which, at least according to the authoritative report The Military Balance 2008, published by International Institute for Strategic Studies, is the strongest maritime force in the Gulf of Guinea, even if the seaworthiness of many of its vessels is somewhat questionable. Moreover, the timing of the June 19 attack to coincide with the withdrawal of vessels, which normally are supposed to patrol the area of the Bonga field, to participate in a exercise of Nigeria's Eastern Naval Command is indicative of both deficient security arrangements on the part of the Nigerian authorities as well as good intelligence on the part of the militants. A bombastic MEND email statement declared that:

The location of the attack was deliberately chosen to remove any notion that offshore oil exploration is far from our reach. The oil companies and their collaborators do not have any place to hide in conducting their nefarious activities. Oil and gas tankers are also warned to avoid Nigerian waters. They stand the risk of laden crude oil or natural gas tankers being attacked.

Under threat to the livelihood of his regime – hydrocarbons account for more than 90 percent of Nigeria's exports and at least 80 percent of government revenue – Nigerian President Umaru Musa Yar'Adua has called for a Niger Delta Summit later this month to seek a peaceful resolution of the myriad disputes in the resource-rich region. The problem is that Yar'Adua is hardly the well-positioned to serve as peacemaker, given that he is head of state by virtue of being declared the winner of a presidential poll last year that was described as “a charade” by the Transition Monitoring Group (TMG), a broad-based coalition of some sixty Nigerian non-governmental organizations which fielded some 50,000 observers across the country; “cannot be considered as credible” by the European Union; and “seriously flawed” by the U.S. State Department (see my first-hand report in my May 3, 2007 column). Since then, Yar'Adua has almost nothing to showcase for his year in office, leaving his Nigerian critics have dubbed him “Baba-go-slow” for his failure to deliver on any of the raft of reform promises he made in the wake of his inauguration. As this column is being filed more than one million elementary and secondary school teachers are beginning the second week of a nationwide strike over the federal government's failure to implement a new pay scale. Unfortunately, about the only initiative that the president has shown much energy for has been a ham-fisted attempt to ride a populist wave by retroactively “reinterpreting” longstanding contracts with the oil majors, a move that threatens to seriously downgrade the long-term prospects for an economy already in desperate need of investment capital for diversification.

As for Ibrahim Agboola Gambari, the Nigerian academic and diplomat appointed to preside over the steering committee for the meeting, a clumsier choice could not have been made. Not only is he a Muslim from the northern and thus hardly a neutral outsider amid the country's simmering cauldron of ethnic tensions, but as Nigeria's permanent representative to the UN during military rule from 1990 to 1999, Gambari actually defended the brutal dictator Sani Abacha's execution of writer Ken Saro-Wiwa and eight other activists, an outrage that is one of the defining moments of the conflict in the Niger Delta. A MEND email categorically rejected participation of Gambari, who later went on to serve as UN Secretary-General Kofi Annan's undersecretary-general for political affairs and Secretary-General Ban Ki-moon's special advisor: “Here is a man who defended the despot, Sani Abacha, and the judicial murder only to expect a warm embrace from the Niger Delta people. He is not welcome and we do not consider him credible.” Elected officials in Delta State have also criticized the appointment. Moreover, the fact that one of the leading figures in the MEND coalition, Henry Okah, is being held prisoner by Nigerian federal authorities and being secretly tried for treason, a capital offense, after being arrested in Angola last year on weapons-smuggling charges is hardly conducive to dialogue. Unsurprisingly given the totality of these factors, MEND has been joined by other groups in the Delta region, including the Ijaw Youth Council and the Movement for the Survival of the Ogoni People (MOSOP), in rejecting the planned peace summit initiative, which they have characterized as a diversion. Nonetheless, an uneasy ceasefire proclaimed by MEND late last month at the behest of elders in the Delta and on condition that the Nigerian military refrains from operations in the area continues to hold, albeit tenuously.

So far, despite the negative impact on the pocket books of their constituents, American and other Western leaders have not been wont to focus much attention on the economic injustices, political marginalization, and overall lack of national cohesion that has fueled the hitherto low-intensity domestic conflict in Nigeria. Consequently, the West African country has been consigned to a form of benign neglect: there are neither adequate international security partnerships with the federal authorities to ensure that they have the capacity to root out the militants nor sufficient global political pressure to motivate them to undertake serious redress of the underlying root causes of the conflict. As energy prices soar further, however, it is unlikely that diplomats, military officers, and intelligence officials in Washington and other capitals can continue to ignore the waves, increasing in both number and intensity, rippling out of the Niger Delta.