LAGOS (AFP) — Unrest in the Niger Delta is becoming a major problem for the Nigerian government but its importance as an oil producer is also helping extend its shadow over the world economy.
President Umaru Yar'Adua made the Delta, with its oil and gas riches, one of his priorities when he came to office one year ago. But it remains as violent and poverty stricken as when he arrived.
The Movement for the Emancipation of Niger Delta (MEND) and other smaller militant groups terrorise multi-nationals such as Royal Dutch Shell and Total with their attacks from speed boats in the myriad creeks that make up the region.
Total chief executive Christophe de Margerie this week became the first multi-national chief to question the future of his company in Nigeria.
"We have people who work over there ... who are unfortunately more and more often subjected to major aggressions, (or) kidnapped," de Margerie told a French parliamentary committee.
"We are asking ourselves the question (about staying)," he said, before adding that the departure of any foreign oil company would have a disastrous effect on spiralling oil prices.
Shell has lost its place as the top producer in Nigeria to ExxonMobil and has also spent tens of millions of dollars repairing sabotaged installations. Its chief Jeroen van de Veer acknowledged recently that the group's world production would suffer this year because of the Niger Delta attacks.
Shell suffered a new blow this week when Yar'Adua announced that by the end of the year a new operator will resume production in the Ogoniland oil fields abandoned by Shell 15 years ago, because "there is a total loss of confidence between Shell and the Ogoni people" in the Delta.
For the last two years, Nigeria has lost about a quarter of its daily production because of attacks on pipelines and terminals and the kidnapping of key staff, foreign and Nigerian.
Production is stuck at around two million barrels a day where Nigeria was aiming for four million by 2010.
Yar'Adua said in a recent interview with AFP that he hoped the unrest would be ended within three years.
MEND and other groups say that the Delta does not get a fair enough share of the huge revenues it makes for the country. And Yar'Adua has sent a draft budget to the Senate seeking around 673 million dollars (435 million euros) for projects in the Delta in 2008.
He has also called a summit of the government, local groups and the oil multinationals.
But there is widespread scepticism over the government's action and fear over the future.
"Until a just and lasting solution acceptable to Niger Delta in particular, and all stakeholders generally, is found, the problem will remain with us, growing like a malignant cancer," said the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) in a report released Wednesday.
The chamber estimates that Nigeria lost a minimum 500,000 barrels a day to the unrest and at a price of 60 dollars a barrel that would cost about 22 billion dollars.
Nigeria "cannot afford" the losses, it added. "Without solution to the Niger Delta Crisis, crude oil supply to the refineries, and dry gas supply to the existing and projected thermal power plants, can not be guaranteed."
"Unless something is done drastically and urgently this country is sitting on a keg of gun-powder," said Kayode Eso, head of the truth and reconciliation commission in Rivers State at the heart of the Niger Delta.
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