Tuesday, May 26, 2009

MEND Attacks Oil Infrastructure, Promises More Attacks to Come

While the international naval presence off the east African coast gets most of the attention, the problems in the Gulf of Guinea remain a serious problem that can spill over into a problem impacting your wallet.

On Monday the Movement for the Emancipation of the Niger Delta (MEND) disabled pipelines used by US owned Chevron over the weekend. On Tuesday a Nigerian navy patrol foiled an attempted attack on an offshore oil facility operated French owned Total on Tuesday.

"Men in speedboats tried to attack our Amenam offshore field and they were driven away by a (navy) patrol team," Total spokesman Fred Ohwawa said.

Amenam lies about 30 kilometres (20 miles) offshore from Rivers State in the Niger Delta.

A spokesman for the Joint Task Force (JTF) protecting oil firms and facilities in the restive region confirmed the incident.

"There was an attempt to attack a Total's offshore facility, but the criminals were driven away," Colonel Rabe Abubakar told AFP.
20 miles offshore is in international waters. The US Navy has been increasing presence in the region with the African Partnership Station, but it does raise the question whether a larger presence is necessary. MEND has a history of attempting to attack these large offshore oil platforms, and the pattern suggests these attacks will continue.

All it takes is one successful attack, or even one attack that goes badly, and we have a potential huge global economic impact on energy or even a regional environmental problem that could trigger a chain reaction of events throughout that region.

It isn't an accident that last year when oil prices at the pump were so high, it was during the height of conflict between MEND and the Nigerian government. Oil production at that time was down to below 1 million barrels per day. After the loss of 100,000 barrels per day due to pipeline damage of the Chevron facility, Nigeria is pumping 1.76 million barrels per day. That compares to 2.6 million barrels per day back in January 2006.

Study after study suggests the western oil companies do a better job than the Nigerian government insuring the local population gets an economic boost in the local economy from the oil production. The Obama administration must do more to encourage the Nigerian government to pump revenues from oil back into the local economy as part of improving security. It is one of many necessary steps needed to fight the MEND insurgency.

Crude oil imports to the United States from Nigeria are down almost half from last year, and it looks like increased crude oil imports from the African nations of Angola and Algeria are making up the difference. Reasons for the decline include the global economic depression, the MEND insurgency, and diversification of supply. The real question is what happens when global demand increases with an economic rebound, and if the Nigerian government starts pulling in huge sums of cash as a result of increased oil demand... how will MEND react?

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