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Nigerian oil output plunges

Oil production in Nigeria has suffered a colossal drop since 2005. When it once boasted of 2.4m bpd, it now produces 1.7m. Queues form on a daily basis outside petrol pumps and while rows break out at gas stations, a campaign of violence is being orchestrated that leaves people dying in a fight between militants and soldiers tasked with protecting oil fields, and oil companies considering their long-term future.

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One significant example of the intensity of the unrest occurred in February when an underwater Shell pipeline, that had the capacity to produce 250,000 barrels of oil a day, was shutdown. This month Chevron shut down an offshore platform after an attack. This is the worst oil disruption seen in the country in 20 years. Speaking to worldoil.com Dolapno Oni, head of energy research at Ecobank Transnational Inc, said, “This is some very, very sophisticated brazen attack. It is a resurgence of militancy. These guys don’t seem to be after money. They just want to frustrate the government.”

If you were even semi-plugged in last week, you’ll have seen THAT clip where David Cameron appeared to suffer some form of vision stroke which rendered him unable to see the giant ITV camera filming him, the Queen and the Archbishop of Canterbury as he described Nigeria as being one of the two most corrupt countries in the world. It happened just before President Buhari was due to give a keynote address at the event titled: Why We Must Tackle Corruption Together. In London. #awkward

To his credit, the Most Rev Justin Welby was heard saying ‘this particular president’ is not corrupt himself – which was later echoed by Buhari who, with more diplomacy than Prime Minister demonstrated, said perhaps Mr Cameron was referring to is predecessors.

The people who make up the militant group behind the current unrest – the Niger Delta Avengers – tend to disagree. It’s thought to have formed around three months ago and claim on its website that it is fighting for an independent state on behalf of the people of the Niger Delta. They say they are prepared to ‘crippled Nigeria’s economy’ to achieve these aims. Some cynical observers say they’re made up of militants who weren’t included in the amnesty programme that followed the wave of violence in the region between 2006- 2009. This saw tens of thousands of armed fighters do a deal with the government to receive a monthly hand-out in return for not attacking the country’s oil producing companies.

However Buhari’s ability to lose friends and anger the very worst sort of people knows no bounds as he recently announced the funding for the amnesty programme was to be cut by a whopping 70% and perhaps done away with altogether. In a single move he’s bandied together the former militants and the new militants and set them jointly against the government.

Although Nigeria has enjoyed the status of biggest producer on the continent, the colossal oil price drop has had wide-reaching consequences on its society and because of the unrest its output, the BBC points out, is now behind that of Angola. Buhari told his fellow countrymen earlier this month, “We are experiencing probably the toughest economic times in the history of our nation. I cannot promise you that this will be an easy journey.” In a drastic move the government announced petro prices wold rise by two-thirds to curb the fuel crisis. Last time the government tried this, under Buhari’s predecessor Goodluck Jonathan, it was reversed. Talks are soon to begin in a bid to see off a national strike that trade unions say is necessary in the face of such a ‘criminal ‘decision.

Rumours are flying that the move was the first step in receiving funds from the IMF. The second is to devalue the naira. Government sources deny this but an IMF spokesperson rather unhelpfully said, “There are no negotiations going on, however the Fund continues to have a productive dialogue with the authorities and we stand ready to hep should the country make a request.”