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Unrest in Nigeria's Delta region could fuel rise in oil prices

PORT HARCOURT, Nigeria—The militia commander wanted to be very clear: January's attacks on Western oil companies in Nigeria's crude-rich Delta region—including one in which four Westerners were held hostage for 19 days—were only the beginning.

"Trust me," he said by phone from a hideout somewhere in the Delta's maze of creeks, "by the end of this month you will see serious action."

An idle threat? In the swampy Delta, home to some of the world's most productive oil fields but also to millions of people living in extreme poverty, no one is willing to say so.

Anger at the lack of access to oil wealth long has fueled militant attacks in Nigeria's main oil-producing region, but January saw the worst spate of violence in several years. Oil companies withdrew hundreds of employees from the region during the well-orchestrated campaign of robberies, pipeline explosions and kidnappings, which cut Nigeria's daily production of 2.4 million barrels by 10 percent.

The primary target was the Anglo-Dutch giant Royal Dutch Shell, which controls nearly half of Nigeria's output. Company officials said half the reduced production had been restored.

But the militant group that claimed responsibility for January's campaign is promising that February will be worse. In a phone interview Friday, a man who identified himself as one of the commanders of the Movement for the Emancipation of the Niger Delta repeated threats to throw off Nigeria's oil production by 30 percent this month.

If that were to happen, it would send shock waves through a world oil market that's already stretched by rapidly rising demand and fears that Iran will cut oil exports because of global condemnation of its nuclear program. Nigeria is the world's eighth-biggest oil exporter and the fifth-biggest supplier to the United States.

The commander declined to be identified, citing security. But people who are acquainted with the militants, who have sympathizers throughout Port Harcourt, vouched for his position.

Analysts said it wouldn't take much to sink Nigeria's production well below last month's 10 percent shortfall.

"If down the line there are a few more attacks, you can go from 10 to 20 percent off in a matter of days," said Sebastian Spio-Garbrah, a West Africa analyst with the Eurasia Group. "Thirty percent is not entirely unlikely."

The militants, said to number in the tens of thousands, have amassed more automatic weaponry than government soldiers. They hide in the labyrinthine creeks and backwaters of the Delta, where the Niger River empties into the Gulf of Guinea and the Atlantic Ocean, and prey on oil companies' far-flung machinery and crisscrossing pipelines.

They have the support of residents throughout the region, who've long agitated for greater control of its staggering oil wealth. While oil companies and Nigerian officials reap huge sums, villagers in the Delta eke out pre-modern existences as farmers and fishermen.

By law, Nigeria's states keep 13 percent of the revenues from oil that's produced locally. That's pumped the annual budget of Rivers, the leading oil-producing state, to $1.2 billion, a fourfold increase from two years ago.

But little of that wealth is apparent in Port Harcourt, the state capital, where most adults are unemployed, there's no piped water, power goes out regularly, trash piles up and the roads are a disaster.

Opposition groups accuse state and federal government officials of pocketing $400 billion in public money over the past four decades and buying lavish mansions, private jets and homes overseas. Many officials employ armed gangs that steal oil directly from pipelines, earning millions of dollars on the black market.

State officials didn't return calls seeking comment. Shell officials wouldn't comment on specifics, but Shell's Nigeria director, Basil Omiyi, acknowledged in the company's 2004 annual report that the people of the Niger Delta "live with the impacts of oil and gas production—but, despite the efforts of government and companies, see few of the benefits."

After years of mostly nonviolent protest, public outrage is sharpening. In September, authorities arrested a prominent militia leader, Mujahid Dokubo Asari, and charged him with treason for repeated threats to fight a war of secession against the federal government.

Last month's attacks reportedly were the work of members of Asari's ethnic group, the Ijaw, who analysts think are jockeying for position in his absence.

Spio-Garbrah said the January attacks were more sophisticated because they sabotaged production and included political demands. The kidnappers wanted Asari's release and $1.5 billion in payments to Bayelsa state, another leading oil-producing region, to address environmental damage—although they released the hostages without these demands being met.

"The language they're using is not the language of stupid or illiterate people," said Anyakwee Nsirimovu, the executive director of the Institute of Human Rights and Humanitarian Law in Port Harcourt. It's a sign that the "armed struggle"—to use one of Asari's favorite phrases—is becoming more serious.

"The people carrying guns are the minority," Nsirimovu said, "but they are playing on the frustrations of people all over the delta."

Most of those frustrations lie with the government's failure to police the oil industry rather than with companies such as Shell, which has tried to improve its image after a 2003 internal report concluded that it was partly to blame for the region's conflicts. But Shell is an obvious target.

Even in the territory of the Ogoni tribe, which Shell personnel abandoned in 1993 in the face of nonviolent opposition from villagers, little has improved since the company left. Its pipelines still run through Ogoniland, and occasional ruptures lead to oil spills.

In the Ogoni fishing village of Goi, about 50 miles east of Port Harcourt, a spill from a Shell-owned pipeline in September 2004 flowed into the lake and decimated the fish. The spilled crude subsequently caught fire, burning down nearly all the village's mango trees.

There's been no attempt to clean up the spill. Murky brown crude still sits atop the lake, where naked children like to swim.

"They are used to it," said Joseph Gini, 45, a sinewy fisherman.

"We are still suffering," he said. "The people you call politicians are stooges. They make empty promises, and then they take money from oil and carry it away."

Spilled oil can run into creeks, spoiling drinking water. And farmers say that heavy construction has compacted the once-soft dirt, making it hard to grow even hardy crops such as cassava, a regional staple.

Oil companies continue to flare, or burn off, huge quantities of natural gas, which comes up in drilling for crude oil but is less valuable. Plumes of black smoke fill the sky across the Delta, causing air pollution and acid rain.

The Nigerian government has ordered flaring to cease by 2008, but Shell already has said it'll miss that target. To residents, it's just another example of how politicians can't—or won't—rein in the industry's abuses.

Although he said he opposed the recent violence, a spokesman for Asari's militant faction, the Niger Delta People's Volunteer Service, said more attacks were certain if the government and oil companies didn't address people's concerns.

"If the Nigerian government thinks this is all a joke," Onegiya Erekosima said, "I cannot predict what will happen tomorrow."

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(c) 2006, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): NIGERIA-OIL

GRAPHIC (from KRT Graphics, 202-383-6064): 20060203 NIGERIA OIL

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