• Saturday, July 20, 2024
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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.

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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.