US embassy cable - 03LAGOS568

UNCLAS LAGOS 000568 
 
SIPDIS 
 
 
PARIS FOR OECD/IEA 
TASHKENT FOR BURKHALTER 
 
 
E.O. 12958: N/A 
TAGS: EPET, ENRG, EFIN, ECON, EINV, PINS, NI 
SUBJECT: NIGERIAN LOCAL VIOLENCE CAUSES MINIMAL IMPACT 
ON OIL PRODUCTION 
 
 
1. Summary.  A violent clash between local activists 
and police left seven dead in Delta state late last 
week. While Shell Oil moved non-essential staff from 
pockets of disturbance, there appears to be no 
disruption in oil production at this time.  End 
Summary. 
 
 
2. A simmering dispute between Ijaw activists and the 
government boiled over into a firefight late last week 
in the swamps near the town of Warri in Delta state. 
Reports indicate Ijaw youths from the village of 
Okerenkoko blocked a river channel used by both local 
residents and oil producers after the government failed 
to meet their demands to withdraw troops from the area, 
redraw electoral wards, and provide more oil revenue to 
local communities.  Organized loosely under the 
umbrella group Ijaw Youth Council, headed by Bello 
Oboko, who sources tell us is from Okerenkoko, the 
youths refused to allow a military-escorted barge to 
pass on its way to an oil installation.  Gunfire 
erupted, and various sources estimate four of the Ijaw 
and three soldiers were killed.  Reports that three 
additional police officers were kidnapped during the 
gun battle remain unconfirmed. 
 
 
3. In response to this gunfight and the current tension 
in outlying villages of Warri, Precious Omuku, Director 
of External Relations for Shell Petroleum Development 
Company of Nigeria, told Econoff that Shell has asked 
workers deemed non-essential to return from field 
operations to Warri for an undetermined period of time. 
He stated that Shell does not feel its operations or 
employees are under direct threat at this time, but 
rather, the company is taking precautions to minimize 
the number of its people in the field who might get 
caught in the crossfire between Ijaw youths and 
Nigerian police and soldiers.  If violence escalates, 
more personnel may be withdrawn to Warri.  Because he 
is away from corporate headquarters on a business trip 
to Port Harcourt, Omuku would not comment with any 
specificity as to whether oil production has been 
impacted, but he doubted the shifting of non-essential 
staff from remote locations to Warri would have any 
serious effect on Shell output. 
 
 
4. Sola Omole, General Manager of Government and Public 
Affairs for ChevronTexaco, likewise reports that his 
company is monitoring events in the region very 
closely, but has taken no action in response to the 
Okerenkoko clash.  Over the weekend, a ChevronTexaco 
vessel loaded with diesel fuel was captured and stolen, 
but its crew was released unharmed.  Omole attributes 
this theft on the Ijaw youth blockade of Delta 
waterways, but still maintains the company does not yet 
feel targeted.  He warns that the situation is very 
fluid, but noted that even if ChevronTexaco crude 
production in the area were to be disrupted, it amounts 
to some fifteen percent of the company's output, and 
which could be compensated for at other facilities, at 
least as a short-term response. 
 
 
5. Comment.  In the run-up to the April elections, 
incidents of inter-ethnic violence are bound to 
persist, as loosely organized local groups vying for 
power and money confront each other and the government, 
at times with bloody consequences.  While allocation of 
oil revenue is a key component of many of these groups' 
complaints, recent violence has not been focused 
specifically on oil company facilities or their 
personnel.  Nonetheless, the companies will take 
precautions as their facilities and workers can quickly 
get caught in the midst of communal clashes or become 
associated with what may be perceived as government 
action or inaction.  If the violence remains 
decentralized and largely communal, crude oil 
production should remain stable, as the GON frequently 
makes up anticipated drops in any one company's monthly 
production by increasing the output quota of other 
companies, and none of the major producers have their 
output flowing from only one region.  At this time, 
personal safety appears to be the greatest challenge 
facing oil producers in Nigeria.  End Comment. 
 
 
HINSON-JONES