Nigeria kidnaps sharpen fears of oil war

http://www.upi.com/Science_News/Resource-Wars/2010/11/10/Nigeria-kidnaps-sharpen-fears-of-oil-war/UPI-68671289414776/

PORT HARCOURT, Nigeria, Nov. 10 (UPI) -- The kidnapping of five Western technicians on an offshore oil platform in Nigerian waters has heightened concern that the West African state's all-important oil industry is again under attack by tribal insurgents.

Monday's abduction, in which two other oil workers were shot and wounded, was the work of the Movement for the Emancipation of the Niger Delta, the principal insurgent group.

MEND warned Monday that it planned more attacks on oil installations in the southern Niger Delta, the heart of Nigeria's oil industry, which accounts for 90 percent of state revenues. The insurgents gave foreign oil companies 72 hours to get out "or face the consequences."

Since they launched the insurgency in 2006, they have slashed Nigeria's oil production by 40 percent, a level of losses the country cannot afford.

In Monday's dawn attack, gunmen in four boats stormed the High Island 7oil platform contracted to the British-owned Afren Oil Services Co. located in the Okron field 7 miles off Nigeria's southern Akwa Ibom state.

Their captives were identified as two Frenchmen, two Americans and a Canadian.

The kidnappings followed several months of sporadic insurgent attacks amid the collapse of a 2009 government peace initiative.

The most serious of the recent attacks was a double car-bombing in Abuja Oct. 1, Nigeria's Independence Day, that killed 12 people. The bombings and Monday's kidnappings marked a sharp escalation in MEND operations just as oil production was shown signs of recovery.

It currently stands at 2.1 million barrels per day. If the violence continues, Nigerian exports to the United States could be hit.

The United States imported 942,000 bpd in August, the U.S. Energy Department says, making Nigeria America's fifth largest supplier of oil.

The swelling violence coincides with political turmoil triggered by an upcoming presidential election and Muslim-Christian massacres in central Nigeria.

Nationwide turbulence on that scale could scare off foreign companies seeking to invest in Nigeria's oil wealth. Several longtime foreign operators such as Royal Dutch Shell, Chevron of the United States and Eni of Italy are selling some joint-venture licenses because of the security crisis.

On Sept. 22, armed pirates clashed with the Nigerian navy off the Niger Delta in a failed bid to take over an offshore platform operated by Addax Petroleum, a subsidiary of China's state-owned Sinopec Group.

The gunmen kidnapped three French employees and a Thai from a support ship. They are still being held, presumably for ransom.

The pirates who operate in the delta's mangrove swamps and creeks and off the southern coast, have frequently seized tanker for their cargoes. They often work with insurgent groups that are engaged in the wholesale theft of crude oil from pipelines and terminals.

Shortly before the government launched an amnesty program in June 2009 in a bid to end the insurgency, the government said it was losing around $1 billion a year in stolen oil.

The activities of the militants and the pirates "have grown into a multibillion-dollar racket with tentacles reaching far into state institutions and criminal connections that stretch from Abidjan to Odessa," the Financial Times reported in July 2009.

All this has stunted fresh exploration in one of Africa's main oil producers. As output has declined, so have the funds the corruption-plagued government needs to maintain the national infrastructure -- and its patronage system.

Plans to reform the oil industry, aimed at attracting an estimated $50 billion in investment, mainly by foreign companies, and boosting state revenues have been repeatedly thwarted.

The companies already in Nigeria, such as Shell and Chevron, don't want to be pushed into a closer relationship with the Nigerian National Petroleum Corp., described by the Financial Times as a "basket case," that would cut their profits.

Thousands of MEND fighters surrendered weapons under the government amnesty declared in June 2009. But the peace initiative began falling apart when the architect of the peace effort, President Umaru Yar'Adua, was stricken by illness in 2009.

Yar'Adua, a northern Muslim, later died. His successor, Goodluck Jonathan, a southern Christian, hasn't been able to revive the crumbling initiative.

He is now locked in a bitter power struggle with northern political barons over the presidential election scheduled for early 2011.