Ambush on Nigeria Oil Team May Hamper Buhari's Recovery Plan

(Bloomberg) -- An attack by Islamist militants on an oil exploration team in Nigeria’s northeast has hurt the government’s ambition to find new crude reserves and quashed hopes of a quick recovery of the West African nation’s least developed region.

Militants of the Boko Haram Islamist group on July 25 staged an ambush on geologists, staff of the state-run oil company and soldiers in a bid to disrupt attempts to find oil reserves in regions other than the restive southern Niger River delta. At least 48 people died in the attack, according to medical and military officials in the city of Maiduguri who asked not to be named as they weren’t authorized to comment.

Three days later, the group released a video showing three men identifying themselves as staff of the University of Maiduguri’s geology department who had been kidnapped during the assault. They are being held by a Boko Haram faction of Abu Musab al-Barnawi, the leader recognized by the Islamic State, according to one of the captives.

“It’s been a very long time since we had such an audacious attack,” said Freedom Onuoha, a senior lecturer of political science at the University of Nigeria in Nsukka in the southeast. “Its scale marks a new level of boldness from the group.”

First Attempt

The team was hired by the Nigerian National Petroleum Corp. to conduct geological surveys in parts of the Lake Chad basin. It was the state company’s first attempt to find oil reserves in the area since exploration was put on hold in 2014 following a surge of violence.

The government of President Muhammadu Buhari, who was elected in 2015, has been plagued by a decline in the production and the price of oil as the economy shrank 1.6 percent last year, the first full-year contraction since 1991. Sabotage of oil pipelines in the Niger River delta, where almost all of Nigeria’s crude is currently produced, cut output to a 27-year low last year and deprived the government of an estimated $7 billion in income.

That’s why Buhari’s administration is keen to find new reserves in inland basins, said Malte Liewerscheidt, senior Africa analyst at global risk consultancy Verisk Maplecroft, in an emailed response to questions. “The government aims to market northern Nigeria as an exciting oil frontier that could boost the industry’s growth,” he said.

Nigerian Minister of State for Petroleum Resources Emmanuel Kachikwu has vowed the search for oil in the northeast will continue, saying exploration will resume as soon as the military has given security clearance. “The objective of this patriotic exercise is to open up new areas for oil exploration for the common good of all Nigerians,” Acting President Yemi Osinbajo said in a statement on July 30.

Food Shortages

Boko Haram has waged an eight-year war from its base in the northeast to impose its version of Islamic law in Africa’s most populous country, leaving tens of thousands of people dead and forcing millions to flee. The region, which is facing a near-famine after suffering at least $9 billion in damage from the destruction of bridges, schools and villages, already had some of the country’s highest illiteracy and poverty levels before the insurgency began in 2009.

“The northeast was already the least developed region before the insurgency,” said Idayat Hassan, director of the Centre for Democracy and Development, a research group based in the capital Abuja. The conflict “has taken us back more than 50 or 100 years,” she said by phone.

Today, at least $1 billion is needed to alleviate acute food shortages threatening as many as 1.4 million people, according to the United Nations. A day before the attack on the oil exploration team, Osinbajo unveiled a plan to build new houses, schools and health centers around the town of Bama to speed up the return of displaced people, saying the plan would eventually be extended out to the rest of the northeast.

Boko Haram controlled large swathes of territory until a military offensive in mid-2015 dislodged many of its fighters, prompting Buhari to declare by the end of the year that Boko Haram was “technically defeated.” At the same time, neighboring countries such as Niger and Cameroon saw a surge in bombings and hit-and-run attacks that forced them to deploy thousands of soldiers along their borders.

The July 25 attack in what was considered a low-risk area shows that the insurgency is “re-invigorated” in Nigeria, according to Nnamdi Obasi, senior Nigeria analyst at the Brussels-based International Crisis Group.

“For a government that had held up its counter-insurgency campaign as its foremost achievement, this attack and other recent attacks could jeopardize that achievement,” he said.

To contact the reporters on this story: Yinka Ibukun in Lagos at yibukun@bloomberg.net; Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net. To contact the editors responsible for this story: Sophie Mongalvy at smongalvy@bloomberg.net Pauline Bax, Michael Gunn.

Copyright 2017 Bloomberg News.

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