Turbulent Few Days in Niger Delta Closely Monitored by Investors

Tuesday, July 7, 2009

In what has a turbulent few days for activity – even in Nigerian terms – the flash point African state has seen oil pipelines attacks, at tanker seized and the surprising surrender of 23 notorious rebels.

Investors in both London and New York are undoubtedly keeping on eye on the situation in the African nation, especially with oil futures bucking a four-day losing streak, just in time for the start of earnings season.

In the latest round of attacks, on Monday, the Movement for the Emancipation of the Niger Delta (MEND) seized a chemical tanker ironically named ‘Siehem Peace’, and the six members of its international crew.

Rabe Abubakar, military spokesman for the government-backed Joint Task Force (JTF), said that the hostages were around 20 miles off of Escravos waters – in Delta State – when they were ambushed. He went on to vow to rescue the expatriates as soon as possible.

MEND, warned in a statement: “For disregarding our warning for oil, gas and chemical tankers to keep away from the Niger Delta waters, six crew members from the chemical tanker, Sieham Peace were seized and will be held until further notice.”

MEND, which claims to be fighting for a fairer distribution of the countries financial return from its mineral wealth, is the most dominant of a number of rebel factions that have been fighting with government forces in the Niger Delta for the last three years. The primary targets of the militants have been foreign-owned oil companies and their employees, including: Royal Dutch Shell, Chevron and Italian group Agip.

Organisation of Petroleum Exporting Countries (OPEC) member nation Nigeria was far and above Africa’s leading producer of crude oil before the unrest began, but has since seen its production levels drop by nearly a third to level with that of Angola.

The unrest in the region has, to Nigeria’s detriment, seen a number of international investors leave the region.

Around 300 foreign workers have been seized in the volatile Niger Delta since 2006, although nearly all have been released unharmed following the payment of ransom.

According to MEND the next tanker that is caught in the region will not be so lucky and have threatened to set it alight, after evacuating the crew first.

Meanwhile, in a surprising turn of events, twenty-three militants in the region surrendered their arms to benefit from the amnesty offered last month by President Umaru Yar’Adua, in a bid to halt attacks on the global energy companies operating ion the region that have hampered Nigeria investment credentials abroad.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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