Nigeria oil sector gets Chinese facelift under militants’ watchful eyes

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Nigerian National Petroleum Corporation (NNPC) and China’s State Construction Engineering Corporation (CSCEC) have signed a $23 billion agreement which will see the construction of three refineries and a fuel complex in Nigeria. Meanwhile, militants in the oil-rich Niger Delta region have threatened to resume attacks if development programs promised by the new President Goodluck Jonathan fail.

According to reports, the project which will require financing and credits from Chinese authorities and banks to complete, would add extra refining capacity of an estimated 750,000 barrels of oil per day

“We are about to deepen the existing technical and commercial relationships between China and Nigeria through the signing of a memorandum of understanding,” head of NNPC, Shehu Ladan told reporters.

The three new refineries will be built in Bayelsa, Kogi and Lagos states, but a location for the petrochemicals complex construction has yet to be confirmed. The construction of the new refineries is expected to stem the influx of imported refined products into Nigeria.

Despite being the world’s 12th-largest oil producer and the eighth-largest oil exporter, Nigeria imports roughly 85% of its fuel needs due to the neglect and botched management of the west African country’s 4 state-owned refineries.

And the new government under President Goodluck Jonathan has demanded that foreign companies invest in developing Nigeria’s infrastructure and economy first, before they can benefit from its oil and gas exports.

While China’s CSCEC has agreed to build new refineries, the most important element in the Nigerian oil sector remains peace and stability in the oil producing Niger Delta region.

Years of unrest has cut Nigeria’s oil production by more than two thirds of its oil capacity, allowing Angola to overtake it as Africa’s top oil producer as the government loses billions of dollars in revenue annually.

But Friday, the freshly sworn-in President Jonathan vowed to improve security and bring development to the impoverished but oil-rich Niger Delta region. He also promised to better coordinate efforts to educate and reintegrate them into society.

“The federal government, strictly aware of the need for a properly coordinated amnesty program, has achieved the much desired peace in the Niger Delta region. We will consolidate on the gains of the amnesty program and do all that is humanely possible to prevent the Niger Delta from once again descending into a nightmare,” President Jonathan told security forces and former rebels in his recent visit to the troubled region.

According to the presidential adviser on Niger Delta affairs, Timi Alaibe, the government would relaunch efforts to rehabilitate and reintegrate 20,192 former militants. The first 2,000 of them are expected to begin training in the first week of June.

Meanwhile, the rebels have threatened to regroup and launch attacks on the oil sector should the new President, a native of the Niger Delta, fail to deliver on his promises.

“I assure you if the amnesty program fails many of us will be tempted to take up arms, return to the creeks to resume fighting again. I just hope we do not get to that point,” AP News quoted a Clinton Ebiama, a former militant.

Late president Umaru Yar’Adua, had offered unconditional amnesty to around 20,000 militants and promised them education, jobs and cash, but critics have lashed out at the perceived sluggishness of the program. President Jonathan has, however, said its implementation is ongoing and he vowed to fast-track the scheme, which is credited with restoring a degree of peace to the region.

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