Bidness Etc discusses whether Chevron and Royal Dutch Shell’s problems might come to an end after Buhari-Avengers talk By Staff Writer on Jun 27, 2016 at 8:03 am EST Problems of international oil and gas companies,
including Shell and Chevron Corporation
( NYSE:CVX), in Nigeria might end in the near
future as the militant group, Niger Delta
Avengers, has asked the Nigerian President
Muhammadu Buhari to visit the southern region
of the Niger Delta. The group has asked the
President to hold a referendum in the country
and to assess how the multinationals and the
government are adversely impacting the locals.
The talks between the two parties are expected to
bring an end to the political turmoil in the
country, which has been haunting Africa’s
biggest economy for the past few months.
Avengers on the Roll
Since February, Niger Delta Avengers has carried
out multiple attacks on foreign companies’ oil and
gas facilities. The group’s first major attack was
on Shell’s Forcados terminal and under-water
pipeline. Since then, it has attacked several
production facilities and pipelines of Shell,
Chevron and Eni SpA (ADR) (NYSE:E).
Nigeria earns 70% of its income from the sale of
crude oil. However, the Niger Delta Avengers
believe that only a small proportion of the crude
sales revenue is invested in the local
infrastructure.
The group highlighted the fact that while
Chevron’s oil and gas facilities have not faced any
power outages in the Niger Delta for the past 40
years, the locals are suffering from lack of schools,
hospitals, clean water and electricity. On their
website, the Avengers said that while the
multinationals are living like “Kings and
Presidents” in the country, the residents continue
to struggle with a lot of problems. The poverty
level in Nigeria is high while the standard of living
is extremely low.
The militants want international energy
companies’ to halt their operations and exit the
Niger Delta. The group said on its twitter account
that foreign companies are “robbing the Niger
Delta of oil and gas for quite a long period.”
The Avengers set May 31 as the deadline for
foreign companies to halt their operations and
exit the region. If the companies didn’t leave by
the set deadline, the militant group said it would
continue to target their facilities, electricity
feeders and pipelines. The group has also warned
against any repair works on the damaged sites.
Peace Talks
In May, Nigerian officials said that they are in talks
with the Avengers. The government pulled back
army troops from the region to ensure the group
is ready to engage in peace-talks. However, the
talks didn’t bear fruit and the attacks continued.
Earlier this month, the Niger Delta Avengers said
they were ready to negotiate with the
government if it would maintain a “genuine
attitude and conducive atmosphere.” The group
said a “genuine dialogue” is necessary to create a
short and long-term framework for the energy
sector in Nigeria.
On Saturday, the group called the Nigerian
President to visit the southern region of the Niger
Delta. Mr. Buhari was scheduled to visit the area
last month, however, he cancelled his trip due to
an ear infection. The postponement of the visit
angered the Avengers, and there was an attack
on the state-owned oil company’s boat. The
group, however, didn’t claim responsibility for the
attack.
This would be Mr. Buhari’s first trip to the region
after he was elected President last year. The
Avengers have accused him of completely
ignoring the locals, especially the minorities. The
group said he should visit Ogulagha and
Ugborodo communities, which are host to Royal
Dutch Shell plc (ADR) (NYSE:RDS.A), Chevron and
other international energy companies.
The militant group said: “Mr. President come and
see for yourself what the host communities are
going through in the hands of Nigeria
government and the multinationals.”
Mr. Buhari’s visit might end the tensions between
the two parties, which would positively impact
the oil and gas majors in Nigeria. The militant
attacks have adversely impacted the financial
position of the energy companies and have
dented the Nigerian economy. Nigerian crude oil
production has dropped from 2.2 million barrels
per day (bpd) to around 1.6 million bpd.
Moreover, the country has also lost its status as
Africa’s biggest oil producer.
The attacks have also created problems for
foreign oil and gas companies in the country. The
companies are already struggling with weak
commodity prices for the past two years.
According to news sources, a number of energy
companies including ConocoPhillips, Shell, and
Total are planning to divest assets in the region.
Another Brexit?
Separately, the Niger Delta Avengers have asked
Mr. Buhari to “call for a referendum and let
Nigerians decides like they did to vote you into
Power.” The Nigerian President should follow in
the footsteps of David Cameron of Great Britain
and should allow the locals to decide whether
they would opt to stay as Nigerians or not, the
group added.
The Avengers are of opinion that the locals are
not happy with the government and thus would
opt for the exit. Market experts are expected to
keep a close eye on Buhari-Avengers talks as they
would determine the future oil and gas
production of Nigeria. www.bidnessetc.com/70824-buharis-visit-niger-delta-solve-shell-chevron-problems/ |
