Friday, April 16, 2010

Nigeria's leader takes control of oil

ABUJA, Nigeria, April 15 (UPI) -- Acting President Goodluck Jonathan, eyeing next year's presidential race that will likely hinge on energy issues, has taken over the electricity ministry himself and put tribal allies in charge of the all-important oil industry.

His main task now is to convince rebels from the south, his home turf, not to unleash a new wave of attacks on oil centers that could slash exports to the United States and even cripple the economy.

Jonathan became acting president Jan. 13 when a federal court handed him the power to run the country while President Umaru Yar'Adua was laid low by heart problems. Nigeria's Senate confirmed those powers Feb. 9.

Yar'Adua was taken to a hospital in Saudi Arabia on Nov. 23, 2009, without formally handing over power, triggering a constitutional crisis that paralyzed the country until Jonathan was appointed.

In the meantime, the leadership vacuum touched off a power struggle between Nigeria's political barons, roughly split between the Christian-dominated south and the overwhelmingly Muslim north.

Jonathan, who had been largely overshadowed by Yar'Adua, a northerner, has emerged as a political force in his own right.

Technically he would have to relinquish presidential powers if Yar'Adua recovers but that is unlikely for some time – if at all.

While Yar'Adua was in power, Jonathan was kept out of energy affairs, which were monopolized by Rilwanu Lukman, former head of the Organization of Petroleum Exporting Countries and Minister of Petroleum Resources since December 2008.

Now Jonathan has taken command of the country's energy industry, the backbone of Nigeria's economy.

He has surrounded himself with leaders of the Ijaw tribe in the Niger Delta, the main oil producing zone, with retired Gen. Owoye Andrew Azazi, military chief under former President Olusegun Obasanjo, handling security affairs in the troubled south.

These figures may be pivotal in restoring a lasting peace in the south, where impoverished Ijaw tribesmen have waged an insurgency for four years demanding a greater share of the country's oil revenues and better conditions for their people.

Their main target has been the oil industry and their attacks on wells, pipelines, terminals and other installations, as well as widespread kidnappings, slashed oil production by about one-third to around 1.7 million barrels per day.

The insurgency cost the state around $1 billion a month in lost revenues.

In August 2009, Yar'Adua declared an amnesty in a bid to end the insurgency. Some 15,000 tribesmen surrendered their arms and the main rebel group, the Movement for the Emancipation of the Niger Delta, called a cease-fire Oct. 25.

But Yar'Adua's illness stalled the peace effort. MEND called off its unilateral cease-fire Jan. 30 and vowed "all-out war." It launched sporadic attacks, including two car bombings in the southern center of Warri March 15, killing six people during a conference of regional governors.

The switch of tactics to attacking government leaders as well as oil facilities raised fears of a major outbreak of violence. This hasn't occurred, although several foreign oil workers have been kidnapped.

Other insurgent groups say they will resume operations as well.

Jonathan's assumption of presidential powers may have provided a breathing space, since he's a native of the Niger Delta. But oil industry sources say time is of the essence if he's to avert a major conflagration in the south.

A CIA assessment in May 2005 warned, "If Nigeria were to become a failed state, it could drag down a large part of the West African region."

That was before a series of major oil strikes across West Africa in the Atlantic turned the region into a major energy producer, but it means that the consequences of a collapse would likely be even more damaging now.

The foreign oil companies running Nigeria's fields are getting jumpy, as much due to government efforts to renegotiate contracts to boost the state's share of revenue, as from the threat of new violence.

Royal Dutch Shell, which has major operations in the delta, says it wants to sell off leases it has in the turbulent region.

The presidential election slated for 2011, which could be brought forward, is likely to intensify the unrest. MEND and other groups traditionally have been used by political barons to extort funds from the delta to finance their campaigns.

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