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Analysis: Nigeria attacks global oil theft

By CARMEN GENTILE, UPI ENERGY CORRESPONDENT   |   July 10, 2008 at 10:00 AM   |   Comments

A global crackdown on oil theft would aid Nigeria in its efforts to curtail its own growing problem with oil smuggling in the petroleum-rich Niger Delta, President Umaru Yar'Adua said while addressing leaders at the G8 summit earlier this week.

"Stolen crude should be treated like stolen diamonds, because they both generate blood money," said Yar'Adua, referring to the estimated 100,000 barrels robbed from delta oil producers every day and sold on the international black market as akin to the diamonds that fueled bloody conflicts in neighboring West African nations.

The Nigerian president, like many others, blamed the theft of the country's chief export and almost sole source of revenue on the armed militant gangs attacking on- and off-shore oil and gas installations with relative impunity.

"Like what is now known as blood diamond, stolen crude aids corruption and violence and can provoke war," he said following a meeting with World Bank leaders during the summit in Japan, Nigeria's Guardian newspaper reported.

According to Nigerian government estimates, militant groups and others who engage in "bunkering," a term used in Nigeria to describe the theft of oil from pipelines and other sources, have cost the country about one-fifth of its production in recent years, reducing daily oil output to less than 2 million barrels.

Yar'Adua's call for international solidarity in combating oil theft is the latest appeal by Nigerian leaders for international attention, and in some cases intervention, in the problems plaguing the Niger Delta oil producers.

Later this month British Prime Minister Gordon Brown is scheduled to meet with Yar'Adua in London to discuss improving security for oil firms operating in the volatile delta.

But for some Nigerians, simply talking of improving security with foreign assistance isn't enough.

"Plainly put, the Niger Delta crisis has moved from a domestic challenge to a global one," read an editorial Wednesday in the leading Nigerian newspaper This Day. "For what the Niger Delta region represents in the economic profile of the nation, it ought to be treated as a first priority of this government."

The governor of Bayelsa state, among those comprising the delta, called on foreign leaders to play a role in ending the hostilities that have crippled oil production in the region for decades and rose sharply since the advent of the militant group known as the Movement for the Emancipation of the Niger Delta in 2005.

MEND has called for a more equitable distribution of oil revenue in the delta, where the vast majority of residents live on less than a dollar a day and in squalid conditions.

Since the 1970s, Nigeria, until recently Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms.

Militants contend the Nigerian government, along with the foreign oil companies operating in the delta, have benefited enormously over the years from the sale of the nation's oil and gas reserves, though they have done little to help the residents of the region who live in abject poverty.

"If all George Bush and (former British Prime Minister) Tony Blair could achieve after their visits to Saudi Arabia was commitment to produce an additional 250,000 barrels per day to OPEC supplies, perhaps they should visit the Niger Delta to settle the problems there, where over 1 million barrels of oil production remain shut in," Gov. Timipre Sylva said earlier this month during the World Petroleum Congress in Madrid.

The governor said the problems of the delta and violence perpetuated by groups like MEND, whose increased attacks on oil installations and pipelines in recent months caused Nigeria to lose its place as Africa's top petroleum producer to Angola, were global issues that deserved the attention of the international community.

Global oil prices often have risen following reports of a major pipeline attack in the delta, which until a few years ago could be counted on to produce about 2.5 million bpd. However, according to a report by the Organization of Petroleum Exporting Countries, Nigeria's production is down to 1.81 million bpd, while Angola's output has expanded to 1.87 million bpd.

This isn't the first time Nigerian leaders have appealed to international leaders, particularly those from the United States, to play a role in resolving the delta's ongoing woes.

In May, MEND leaders called on former U.S. President Jimmy Carter to mediate talks between rebels and the government aimed at ending hostilities in the delta.

The former president has yet to play a role in any talks between the Nigerian government and MEND, a dialogue that has been stalled in recent days despite efforts to hold a peace summit in the Nigerian capital, Abuja.

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(e-mail: energy@upi.com)

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