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Nigeria: Delta unrest pushes output down

THE VIOLENCE that has crippled Nigeria's oil production shows no sign of abating, despite renewed attempts by the west African state to combat attacks on oil installations. Disruption caused by an upsurge of pipeline bombing, theft and extortion aimed at the oil industry caused production to fall as low as 1.7m b/d last month, according to official figures – down from 2.6m b/d in January 2006.

Violence in the Niger Delta region – where most of the country's crude oil originates – could have far-reaching consequences for the rest of Nigeria, which derives more than 95% of its foreign-exchange earnings from oil. As a member of Opec, Nigeria is also finding its long-held position as Africa's principal oil producer challenged by Angola.

For Shell, Chevron and other oil majors active in the country, the renewed attacks are a disappointment after some months of relative stability in Delta state. They also represent an unhelpful distraction as the government attempts to restructure Nigerian National Petroleum Corporation, which acts as a joint-venture partner to international oil companies on Nigerian projects. Total and other firms have complained they are not being sufficiently consulted on the reform and fear it will leave them with a smaller share of oil profits.

In response to the escalation of violent attacks on oil industry sites, Nigeria's military launched a crackdown on Niger Delta militants in May. The initiative has not yet been an obvious success, with the most prominent armed group, Movement for the Emancipation of the Niger Delta (Mend), claiming to have caused a fire that disabled Chevron's Utonana production facility shortly afterwards.

Analysts say the rebels have a strategic advantage over army units in the creeks of the Niger Delta as they know the terrain better. Some may also be assisted by the civilian population in an often murky conflict. Last month, Mend claimed government troops had killed seven unarmed civilians at a checkpoint. The military denied any knowledge of the incident, although allegations of human-rights abuses by government forces in the Delta are long standing and have led to complaints in the UN.

Mend says it is fighting for a larger share of oil wealth for impoverished local communities in the Delta. The organisation came to prominence in late 2005, knocking out almost a quarter of Nigeria's oil output in a series of attacks over a few weeks.

Rebel groups with varying ideological claims have since kidnapped hundreds of people, most of them linked to the oil sector, in the volatile south Nigerian region. Most have been released after a few days or a few weeks in captivity, very often after the payment of a ransom.

Mend has acknowledged holding local and foreign oil workers as well as vandalising oil pipelines and other facilities. The military accuses it of the theft of crude oil and of killing soldiers deployed to protect installations and industry personnel. Mend last month rejected a fresh amnesty offer made by Nigerian President Umaru Yar'Adua.

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