Why Nigeria Is No Longer Africa’s No. 1 Oil Producer

Why Nigeria Is No Longer Africa’s No. 1 Oil Producer

A rebel group claiming to fight for justice has resumed blowing up oil wells in the impoverished-but-oil-rich Niger River delta after six years of relative peace, adding to Nigeria’s growing economic issues.

The Niger Delta Avengers’ attacks on Nigeria’s oil industry have been so effective that the country’s output has fallen to its lowest level in 20 years, researcher and analyst Gregory Brew reported in OilPrice.com.

Angola bypassed Nigeria in the second quarter of 2016 as the top oil producer in Africa, according to oil production data from the Organization of Petroleum Exporting Countries (OPEC), Macau Hub reported.

In the second quarter, Nigeria produced 1.539 million barrels per day compared to Angola’s 1.776 million barrels per day.

Attacks on oil wells and pipelines resumed in the Niger delta this year after Nigerian President Muhammadu Buhari ended security contracts and payments that had previously turned militants into protectors and achieved relative peace since 2010, Bloomberg reported.

Oil accounts for 66 percent of Nigeria’s government revenue, and almost all its exports. Nigeria produced 1.4 million barrels a day in May, the lowest in 27 years, according to the International Energy Agency.

The rebel group claiming responsibility — Niger Delta Avengers — says it wants to expose corruption and get justice for poor local communities in the Niger River delta.

Niger Delta Avengers is a media-savvy group, according to Bloomberg, which quoted an unverified website (the group’s Twitter account was taken down) listing grievances, destroyed targets, and threats against producers not to make repairs. Oil companies and the government haven’t used profits from the oil “towards any development in the region,” the site said.

Partly because of the Avengers and their sabotage, Nigeria has fallen behind
Angola as Africa’s top oil producer, New York Times, reported.

Nigeria’s oil production was down 25 percent in the second quarter — enough to contribute to a slight increase in global oil prices, according to an analysis by London consulting firm Facts Global Energy.

The militants have been blowing up crude oil and gas pipelines for six months, shattering years of relative peace in the region, New York Times reported:

“We are not asking for much, but to free the people of the Niger Delta from environmental pollution, slavery and oppression,” the Avengers wrote on their website, explaining their attacks. “We want a country that will turn the creeks of the Niger Delta to a tourism heaven, a country that will achieve its full potentials, a country that will make health care system accessible by everyone. With Niger Delta still under the country Nigeria we can’t make it possible.”

Buhari’s government has said it is open to negotiating with the group. But it is already stretched thin.

The Avengers have separatists aspirations and want a Brexit-­style referendum to split the country, New York Times reported.

The predominantly Christian south has long been an area of resistance and anger, where electricity and drinking water are scarce but billions of dollars in oil are removed, benefiting international companies and politicians. People live on polluted waterways gunked up with oil spills

Many people believe that Buhari, a Muslim from the north, is neglecting them for political or sectarian reasons, even though conditions were also grim under his predecessor, Goodluck Jonathan, a Christian southerner.

“You always say you fought for the unity of this country during the civil war,”
the Avengers said, addressing Buhari on their website. “You haven’t been to the Niger
Delta, how can you know what the people are facing.”

Within the first six months of taking office, Buhari made 12 foreign trips including two to the U.S. but few official trips within Nigeria, earning him the nickname “Minister for Tourism,” Ventures Africa reported in December.

His administration said the trips were necessary to aid the growth of the economy, and they are a lot less lavish than his predecessor’s.

The Niger Delta Avengers “are likely getting some support from former and current” officials of the People’s Democratic Party, which held power until Buhari’s victory, Eurasia Group reported in May 2016, according to Bloomberg.

After winning the 2015 presidential election on an anti-corruption platform, Buhari cut the multi-million dollar contracts that his two predecessors gave to former militant commanders to guard the pipelines they once attacked. The contract was part of an amnesty deal that included monthly stipends to tens of thousands of fighters, Bloomberg reported. The annual budget for payments to ex-militants has been cut back from about two thirds from more than 60 billion naira ($214 million) to about 20 billion naira.

Oil companies that have been affected include ExxonMobil, Chevron, Shell, Total and Eni. International oil companies have divested billions of dollars in assets from the region, but are still exposed to attacks, Bloomberg reported.