Nigerian Rebels Call Off Cease Fire; New Attacks Could Bring Higher Oil Prices Soon

Posted by Charlotte LoBuono on February 2, 2010 at 1:56 pm

MEND rebels will soon resume campaigns against the Nigerian government and foreign oil companies in the Niger Delta. (image: timeinc.net)

Nigerian militants called for an end to a 3 month-old cease-fire with the Nigerian government on Saturday, an article posted on Sunday to the Christian Science Monitor’s website reported. A coalition of Niger Delta rebel groups led by the largest and most powerful of these groups, Movement for the Emancipation of the Niger Delta, known as MEND, referred to the cease-fire agreement and the government’s amnesty program as “a sham.”

MEND spokesman Jomo Gbomo said in a statement announcing an end to the cease-fire that, “All companies related to the oil industry in the Niger Delta should prepare for an all-out onslaught.”

“Nothing will be spared,” said Gbomo, and those companies whose staff are harmed will “bear the guilt.”

The end to peace, however shaky, in Nigeria’s oil rich Niger Delta, has sparked fears of a return to the violence that has cut the output of the fifth largest exporter of oil to the U.S by about 25% in the last 3 years. MEND’s leader has promised that the tactics used by the group will become more violent as the fighting intensifies.

MEND leader Henry Okah told the Monitor in an exclusive interview that, “[The fighting is] going to be much, much worse.” According to the Monitor article, MEND has sent out 100 militant groups comprising 50 men each.

“Kidnapping will still happen, but it will escalate,” Okah said. He added that, “They will carry out attacks on land as well, and take the fight to the government. Officers will be targeted. Soldiers will be targeted. Police stations will be targeted. They will even go to the big hotels to kidnap people.”

MEND feels that such aggressive methods will best hurt the ability of the Nigerian Army to fight and control territory. “Even if [the Nigerian Army] brought in 100,000 troops, it will be impossible to control an area the size of Scotland,” said Okah.

Over the past 3 months, the cease-fire has brought a relative peace to the Niger Delta region that has allowed Nigerian oil output to recover somewhat. Nigerian foreign affairs minister Ojo Maduekwe said that as of late October, Nigeria’s oil output was at 1.6 million barrels per day, up from 1.2 million bpd at the height of the fighting, and was on track to reach 2 million bpd soon. The country’s installed capability is 3 million bpd.

The fighting in the Niger Delta has its origins in a government decision in the 1970s to nationalize all oil supplies, and the perception among those living in the area that they were being neglected by politicians, who were simultaneously becoming rich with oil-industry funds. Since January 2006, following decades of non-violent protest, militants in the Niger Delta have kidnapped oil company employees, sabotaged pipelines, and fought government troops.

The rebels were granted amnesty by President Umaru Yar’Adua in June in exchange for laying down their arms by Oct. 4 and agreeing to rehabilitation. MEND declared a unilateral cease-fire on July 15 upon Okah’s release following 2 years in jail.

For its part, MEND primarily wants inhabitants of the region to have a say in its development. “We want to own our land, we want control of the land and the resources…but instead, we have communities that have been forcibly relocated from their land so that oil companies can start their operations,” Okah said.

Unfortunately, the amnesty program has come to a standstill during the two months that President Yar’Adua has been in Saudi Arabia seeking treatment for a heart condition. However, from MEND’s perspective, the amnesty program made little headway even before Yar’Adua left for Saudi Arabia.

CNBC reported that on Saturday, gunmen ruptured a Shell pipeline in the region in a suspected theft. Although MEND has not claimed responsibility, the group is framing it as a direct result of its declaration to the end of the cease-fire.

Last month, unknown gunmen attacked a Chevron pipeline in the Niger Delta. The next week, Shell CEO Peter Voser announced that Nigeria is no longer the focus of the company’s growth. The announcement coincided with the kidnapping of 4 expatriate Shell contractors.

On Dec. 19, MEND claimed responsibility for an attack on a Niger Delta pipeline operated by Shell and Chevron, and on Dec. 21 the Energy Business Review reported that sources indicated Shell was looking to sell off its Nigerian assets, valued at $5 billion.

Continued and escalating conflict in the Niger Delta could significantly impact oil markets. If Nigerian oil supplies are interrupted, prices for crude oil could climb. For example, on Monday, oil prices rose above $73 per barrel when news of the pipeline eruption broke.