Nigeria Unrest Cost $24B Oil Rev in First 9 Months of 2008

Nigeria, West Africa
(Click to Enlarge)

LONDON (Dow Jones Newswires), Apr. 8, 2009

Nigeria's unrest could worsen after the country lost at least $23.7 billion to oil theft and sabotage in the first nine months of 2008, a presidential committee report says.

Ledum Mitee, chairman of the committee, said the figure shows that "if we were to buy peace, we would be spending less than what we are losing in the crisis."

The November report by the Niger Delta Technical Committee, which was seen by Dow Jones, said attacks on installations resulted "in shutdowns and spillages with consequent losses in revenue estimated at about $20.7 billion."

The estimates uses an average of 700,000 barrels a day lost during the months from January to September multiplied by each month's average Nigerian crude price.

The report added that "this amount [of $20.7 billion] is exclusive of another estimated $3 billion lost to oil bunkering [theft] over the first seven months of this year alone."

Mitee, who is a political leader in the Niger Delta's Ogoniland, confirmed the numbers disclosed in the report.

The report also said that "there are unaccounted costs in human misery, with about 1,000 persons killed within the same period and another 300 taken as hostages."

The committee was set up on Dec. 1 under the auspices of Nigeria President Umaru Musa Yar'Adua to resolve the crisis of the Niger Delta but hasn't been made public.

Militants' attacks and crude theft since 2006 have kept more than 500,000 barrels a day shut down in Nigeria, which is vying with Angola for the title of Africa's top oil producer.

The report proposes an amnesty for militants if they are willing to disarm and said the committee's work had attracted interest from militants and communities.

But "judging by the level of angst we perceive, we share the views of those who believe that there is a looming danger that the present Niger Delta crisis could easily escalate," the report said.

Based on the numbers disclosed, "the cost of failure is too enormous to contemplate," the report added.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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