• Monday, October 28, 2024
businessday logo

BusinessDay

New Niger Delta groups ask for their own pipeline security contracts

NGOs call for a moratorium on divestments as $21bn leaves Niger Delta

The Federal Government’s decision to engage a former militant in a multimillion naira pipeline security contract is fueling new agitations by other groups who want their own share of the deal.

A group calling themselves the ‘Creek Men’ appeared on a local television station demanding inclusion in the Federal Government’s pipeline surveillance contract.

It’s only a matter of time before other disaffected groups start emerging from the woodwork demanding their own share of the deal reminiscent of the early days of the militant agitations in the Niger Delta.

This is exactly the situation some analysts warned would happen if the government reverts to paying those who it once accused of sabotaging the pipelines to protect them.

“Awarding an N4 billion monthly contract to a former Niger Delta militant is a negative signal for a highly volatile region littered with diverse militant groups,” a senior military officer familiar with the Niger Delta region told BusinessDay.

The Nigerian government’s inability to treat its cash cow, the oil sector with the seriousness it deserves has ceded the space to reprobates whose rank accommodates security agencies, community agitators with real and imagined grievances, and exploitative practices by oil companies.

Read also: Why banks, govt must raise investment in agric business – Experts

Analysts said Industry experts say the oil-rich Niger Delta could face more danger on the back of the federal government’s renewed engagement with ex-militants.

Already groups across the country are trading and issuing threats over the contract awarded to Government Ekpemupolo (popularly known as Tompolo).

Nigeria is losing a fortune to the activities of vandals. Last year the NNPC said over 200,000 barrels per day is reported stolen.

In a recent presentation to the Federal Accounts Allocations Committee (FAAC), the NNPC said producers reported a production loss of 9.4 million barrels of crude oil valued at $1.068 billion based on May’s average Brent price of $113.34 due to force majeure, fire outbreak, industrial strike actions and production shut-in due to repairs at various crude oil terminals across Nigeria

To stem these losses, the Nigerian government is considering hiring private security firms and drawing up new rules for operators in the sector which include ensuring leak detection and protective measures are applied before pipeline contracts are awarded.

However, some analysts say while the new rules could improve how quickly leaks are discovered, it will raise costs for operators, and the vandals could develop expertise to get around them.

“Already, Nigeria’s average cost of producing a barrel is one of the highest in the world and this could make that worse with little benefit,” said Prof. Oyinkepreye David Orodu HOD Petroleum Engineering at Covenant University.

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp