In A response to the string of attacks on oil facilities operated by foreign big oil companies in the Delta region, Nigerian government resumed payments to former vandals. The news serves as a positive catalyst not just to the big oil companies but also for the troublesome Nigerian economy.
Last month, the government announced a 30-day ceasefire, but the Niger Delta Avengers declined to agree. Paul Boroh, the amnesty program coordinator told militants in an email that their long-hold monetary stipends are likely to finally resume from Monday.
As reported by Piriye Kiyaramo, payments will be transferred directly from Central Bank of Nigeria (CBN) to ex militants’ banks accounts. More so, the payments include tuition fee for those studying abroad along with the outstanding that were amounts put on hold in February. According to the program, each militant was entitled to receive 65,000 naira ($203.44) monthly in addition to job training.
The move came ahead of the pipelines and facilities being bombed since January - claimed by Niger Delta Avengers (NDA). The NDA threatened the authorities on its website and Twitter account, demanding foreign oil giants to exit from the Delta soon or be prepared for more attacks.
In 2009, the militants stopped attacks on the condition that they would be provided with their due share of oil wealth under the amnesty program. However, the government stopped the provision of these payments by two thirds in February amid a budget deficit; the militants resumed blowing up the pipelines.
Last Saturday, Royal Dutch Shell (NYSE:RDS.A) pipeline was bombed by a group of militants. Pipelines operated by Chevron Corporation, Exxon Mobil Corporation, and Eni SpAwere also targeted by the NDA. Already hampered by low oil prices, the companies had to shut down operations at times as precaution. With output largely hampered, financial profiles of the companies went further in deep troubled waters.
Crude production in the region was also impacted, currently lagging behind Angola. Around two-third of the revenue and exports in Nigeria are earned via crude oil production, which has fallen by 700,000 barrels per day to 1.4 million barrels per day, close to the production in May – the lowest since 1989.
The meetings with the militants have started, but the NDA did not participate in the discussions as the international mediators were not involved. Business Finance News believes that the latest move by the government will not only increase the affected crude production but also take the Nigerian economy out of distress, which relies 70% on crude sales.