July 16, 2008 / 2:33 PM / 9 years ago

FACTBOX-Why unrest in Nigeria's oil heartland matters

July 16 (Reuters) - British Prime Minister Gordon Brown meets Nigerian President Umaru Yar'Adua in London on Wednesday and is expected to discuss ways to help Nigeria tackle lawlessness in its oil-producing Niger Delta.

Below are answers to some questions about the Niger Delta and why it matters to the wider world.



* WHY IS THE DELTA IMPORTANT?

The Niger Delta, a network of thousands of shallow creeks opening into the Gulf of Guinea, is the heartland of a 2 million barrels per day (bpd) oil industry which makes Nigeria the world's eighth biggest oil exporter.

Anglo-Dutch giant Royal Dutch Shell (RDSa.L), U.S. energy firms Exxon Mobil (XOM.N) and Chevron (CVX.N), France's Total (TOTF.PA) and Italy's AGIP (ENI.MI) all have major production facilities in the region.

The United States, the world's top energy consumer, has said it wants the Gulf of Guinea to supply a quarter of its crude oil imports by the middle of next decade. China depends on Africa for some 30 percent of its oil imports.



* HOW DOES THE UNREST AFFECT THE OUTSIDE WORLD?

The Movement for the Emancipation of the Niger Delta (MEND), the main militant group in the region, launched a campaign of violent sabotage in early 2006 against oil installations, blowing up pipelines and kidnapping foreign oil workers.

The insecurity has cut Nigeria's oil output by around a fifth since then, contributing to a rise in global oil prices, which hit a record over $147 a barrel last week.

Nigeria is sitting on more than 36 billion barrels of proven oil reserves -- four times as much as Angola, Africa's second biggest producer -- but insecurity and mismanagement mean many oil companies are leaning towards exploration elsewhere.



* WHO ARE THE MILITANTS?

Local community groups frustrated that their villages remain impoverished and polluted despite the billions of dollars earned from oil under their feet have long campaigned for a fairer share of the delta's natural wealth.

Their cause hit international headlines in 1995 when rights activist Ken Saro-Wiwa and eight of his associates were hanged by the then-military government of General Sani Abacha. The militants have since become more violent and criminalised.

MEND's latest strike in June, in which gunmen in speedboats attacked Shell's main offshore Bonga field, forced the firm to shut down the $3.6 billion facility for several days.



* WHY IS THE SOLUTION SO COMPLICATED?

The insecurity is not a simple conflict between the government and insurgents -- the line between militancy and criminality has become increasingly blurred.

The gangs behind kidnappings, oil theft and violent crime in the delta were first hired by local politicians to intimidate opponents or rig elections and rights groups say their political links mean they go unpunished.

The policy of successive governments to "settle the boys" -- pay militant leaders off for laying down their weapons -- has exacerbated the problem, giving armed gangs greater leverage.

The spoils of a lucrative trade in stolen oil, which is funding the militants, benefits not only the criminal gangs but also local politicians and some members of the security forces, meaning there is little impetus to break the status quo.

The illegal trade is worth millions of dollars a day.



* HOW CAN THE INTERNATIONAL COMMUNITY HELP?

Nigeria has long been hostile to overt foreign involvement, saying it is a domestic issue. The United States has provided some military equipment, while security sources say Israeli private security contractors have also carried out training.

President Umaru Yar'Adua has called for a global clampdown on the theft and smuggling of crude oil. Some estimates put the amount of crude stolen from the Niger Delta at 100,000 barrels per day, or around $5.1 billion a year at current prices.

Human Rights Watch has put the amount stolen at two or three times that level.

Analysts say foreign powers could help Nigeria track the international shipping firms involved, where the cargoes are being unloaded, and who the end users are.

(For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ ) (Reporting by Nick Tattersall; Editing by Charles Dick)




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