By: Connor Kilgore, CIB Africa Desk
Analytical Question: Will Nigeria remain Africa’s largest oil producer for the foreseeable future?

The Niger Delta Avengers (NDA) have bombed an oil pipeline and threatened to intensify attacks on oil and gas infrastructure in the Niger Delta if the Nigerian government strengthens military presence in the region. This indicates that Nigeria’s oil production levels may remain low due to continuing instability in the region.

The NDA, which is widely seen as a militant group (DiChristopher 2016), argue that the federal government values the Niger Delta oil over the lives of the ethnic Niger Deltans residing in the region (Agbinibo 2016b). The Avengers demand resource allocation to the Niger Delta and object to the national government’s history of oil exploitation in the region, which contains close to 90% of all national oil deposits (Taylor 2008:77). The region has experienced increased investment from International Oil Companies (IOCs), leading to ethnic tensions and civilian causalities, resulting from national military programs which protect the oil entities (Anon 2016). The IOCs also cause severe environmental damage from oil spills.  A study in 2011, found 41 polluted sites in Ogoniland, an area in the southernmost part of the Niger Delta. Oil was found to have entered “wells and underground water supplies,” which left some areas affected 40 years after oil had been initially spilled (Vidal 2016). The lasting environmental effects and perceived government disregard were leading contributing factors to the Avengers announcing their formation on February 3 2016, just a month after having begun attacks on oil and gas infrastructure in the Niger Delta region. Due to the bombing of pipelines and threats of further attacks Exxon-Mobil recalled their employees from the region to avoid casualties (Onuoha 2016).

The NDA has caused a decrease in Nigeria’s oil production, an industry that accounts for 80% of government revenue, from 2.2 million barrels per day at the beginning of this year, to around 1.4 million barrels per day presently (Onuoha 2016). They have also significantly reduced the supply of gas to national power plants, partially crippling power grids throughout Nigeria. The attacks carried out by the Avengers, and the ensuing decline in the national oil industry, has left Angola at the top of oil production in the African continent. Both countries are members of the Organization of Petroleum Exporting Countries (OPEC), and the September production rates showed Angola at 1.649 million barrels per day, while Nigeria was at 1.385 million barrels per day.

On Tuesday, October 25, the NDA vandalized the Chevron Escravos export pipeline, on the Escravos shore (Owolabi 2016), located in the western region of the Niger Delta (Nwankwoala et al. 2014). They cited on their website that it would allow no repairs of energy infrastructure until the government spoke with the people of the Niger Delta (Agbinibo 2016a). Nigerian President Muhammadu Buhari has spoken about the possibility of sending in the military in order to alleviate the concerns of the IOCs. The NDA responded on Monday, October 31, threatening to increase attacks, should Buhari follow through (Anon 2016). Buhari is scheduled to meet with an NDA representative on Tuesday, November 1.

Since the ceasefire agreement between the NDA and the Nigerian government in August, the NDA has carried out two attacks. Both have been directed at oil pipelines. This is important because OPEC’s report of the oil production shows that Nigeria increased its production in September to 1.9 million barrels (Owolabi), by nearly 300,000 barrels of oil per day (Calcuttawala 2016). The increase in oil production is a direct effect of the ceasefire. However, with the Avengers resuming attacks and threatening to increase the intensity of those attacks, some of the IOCs oil infrastructure may be hindered or rendered incapacitated from the damage.

Without the ability to repair the energy infrastructure, Nigeria’s oil production may remain low for the foreseeable future. It can be stated with high confidence that the NDA have a very serious impact on the prosperity of the Nigerian oil sector. If the talks between the NDA and President Buhari does not go well and he carries out a military detail in the Niger Delta, Nigeria may experience an even greater loss in production and revenue. It can be stated with moderate confidence that, if some sort of agreement is not met between the two parties, some foreign investment may be cut, leading to even greater economic downturn for Nigeria.

Bibliography

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