NIGERIA: BI-WEEKLY POL/ECON UPDATE FOR DECEMBER

UNCLAS SECTION 01 OF 03 LAGOS 000002 SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY SIPDIS DEPT FOR AF/W, INR/AA DEPT PASS TO USTR-AGAMA DOE FOR GPERSON, CHAYLOCK E.O. 12958: N/A TAGS: PGOV KDEM ECON EPET ETRD KJUS KCOR NI SUBJECT: NIGERIA: BI-WEEKLY POL/ECON UPDATE FOR DECEMBER 15-31 ¶1. (u) The following is a joint Embassy Abuja, ConGen Lagos compilation of December 15-31 political/economic highlights, which did not feature in other reporting, covering: -- Delta Security Incidents -- Political News -- Oil and Gas -- Other Economic News Delta Security Incidents; No Americans Involved -------------- -- ¶2. (U) Construction firm Julius Berger refuses to continue work in Delta: In a statement before the House of Representatives, Committee on the Niger Delta, on December 16, the German construction firm Julius Berger stated they would not resume work on the East-West highway linking Rivers and Bayelsa States in the heart of the Niger Delta region. The company sited "incessant threats" to its workers, kidnappings of employees and the killing of Nigerian soldiers protecting them. According to the General Manager of Julius Berger in Nigeria, David Lubase, the firm has spent an average of 30 million Naira (USD 230,000) monthly on security costs alone. Lubase said the company will not return to work on the project until the security situation has improved significantly. ¶3. (U) Oil fire in Delta State: On the night of December 16-17, residents fled their homes in Effurun and parts of Okpe Local Government Areas of Delta State because of a raging fire on a pipeline operated by the Pipelines and Product Marketing Company (PPMC),which reportedly broke out at about midnight on December 16. Although the cause of the fire was not revealed, media reports said the officials of the Nigerian National Petroleum Corporation (NNPC) believed sabotage was behind the fire. The fire consumed acres of farmland but claimed no lives. ¶4. (U) Three hostages released: Three hostages taken from the oil services vessel "Oceanic Orion" were released on December 17 according to press reports. Both expatriates, a Mexican and a Russian, were released as well as one of the seven Nigerian hostages. The remaining six Nigerians are still being held. ¶5. (U) Armed attacks on two oil services vessels: On December 19, two oil services vessels, the "Falcon Crest" and the "Falcon Wings" were attacked by armed men in speed boats, killing the Filipino captain of one of the vessels according to press reports. The vessels were off the coast of Akwa Ibom state, near facilities operated by Addax Petroleum of Canada. Security sources of the Consulate confirmed the press reports. ¶6. (U) Oil Spill in Bayelsa State: On December 20 a security services firm reported that a spill had occurred at a pipeline oprated by Shell Petroleum Development Corporation (SPDC) at Ikarama community in Bayelsa state and was devastating farmlands, creeks and aquatic life. The oil spill reportedly occurred at the same spot of a previous spill along the Ughelli/Rumuekpe pipeline. The date on which the spill started was not reported. ¶7. (U) Two expatriates (no Americans) kidnapped in Akwa Ibom: According to media reports, on December 20, armed men in gunboats attacked a housing compound and kidnapped two Russian citizens working for an aluminum company in the port town of Ikot Abasi in Akwa Ibom state. ¶8. (U) Armed attack on AGIP flow station: On December 26, armed men attacked the AGIP flow station in Southern Ijaw, Bayelsa State, according to press reports. The media claimed that the Movement for the Emancipation of the Niger Delta (MEND) was behind the attack that was allegedly led by "Commander Africa," however, MEND spokesmen Jomo Gbomo denied MEND's involvement. Although the JTF reported only one LAGOS 00000002 002 OF 003 soldier and two militants killed, civil society contacts of ConGen Lagos said they had reliable reports from the hospital treating the casualties that six soldiers had been killed. ¶9. (U) Militant leader captured: Soboma Jakiri, also known as Soboma Jackrich and Ebri Papa, leader of the "Peoples Liberation Force" (PLF) an affiliate of MEND, was reported arrested by forces of the Joint Military Task Force (JTF) on December 28 in Rivers State. The arrest took place during a visit to the palace of the traditional ruler (Amanyanabo of Kalabari). MEND spokesman Jomo Gbomo condemned what he described as "the betrayal of trust" in arresting a militant who was responding to an invitation for a peace parley brokered by the elders of Rivers State. The JTF spokesman denied that any such "peace parlay" was in progress. Other Political News -------------- ¶10. (U) CEHRD calls on activists to resign in protest: The Director of the Center for Environment, Human Rights and Development (CEHRD),Patrick Naagbanton, who was recently the recipient of recognition from Amnesty International for his work in the Niger Delta, has called upon all civil society activists who are members of the Police Service Committee (PSC) to resign or quit the PSC in protest over the illegal dismissal of former Economic and Financial Crimes Commission Chairman Nuhu Ribadu. ¶11. (U) Peaceful Rally Prevented by Police: On December 26, Nigerian police prevented a peaceful rally called by Dr. Leonard Shilgba of the American University of Nigeria, Yola. According to the organizers, the purpose of the rally was to educate Nigerians about their condition and motivate them to take a more active role in agitating for political reform. The specific points on the agenda included: rallying the spirit of Nigerians "devoid of tribal, ethnic and religious colorations" to seek "improvement of their estate," as well as budget transparency, 50 percent revenue to areas of derivation to oil-producing areas, and a revision of citizenship laws. According to press reports, the State Security Service prevented the rally from taking place as planned in Gboko, Benue State with the justification that "the government does not feel comfortable with the rally." Oil and Gas -------------- ¶12. (SBU) Oil firms reluctant to Operate in Ogoniland: Victor Agbe-Davies, the president of the Nigerian Association of Petroleum Explorationists told EnergyOff on December 17 that local oil companies are reluctant to take over operatorship of oil fields in Ogoniland because of the fractured nature of Ogoni politics. Agbe-Davies, who also heads exploration for Emerald Energy, said oil companies do not want to deal with multiple Ogoni factions, fearing an endless series of demands for payoffs, contracts, and "community investment" projects. In September, President Yar'Adua announced the GON had removed Shell as the operator of the Ogoniland oil fields in Rivers State. The fields have been shut-in due to community unrest since the early 1990's. Agbe-Davies thought the state government will need to hash out a deal with the various Ogoni groups before an oil company would consider starting operations. ¶13. (U) Tanker truck drivers strike: A tanker truck drivers strike in Lagos began on December 17, which led to fuel shortages and long lines in local gas stations. A spokesman for NUPENG, an oil and gas workers labor union that covers the truck drivers, said workers were demanding better road conditions, special road lanes for trucks, an end to harassment by policemen, and a lifting on the ban on daylight movement by tanker trucks in Lagos State. The strike ended two days later (December 19) after the union met with officials at the Lagos State Ministry of Transportation and LAGOS 00000002 003 OF 003 both parties agreed to settle their differences amicably. Other Economic News -------------- ¶14. (U) Poisoned medicine kills children: It was reported in the press on December 18 that more than 30 Nigerian children died after taking baby teething medicine that contained toxic chemical diethylene glycol. Nigeria's Agency for Food and Drug Administration and Control (NAFDAC) tested the medicine and found that it contained 90 milliliters (ml) of toxic chemical per 100ml. The medicine was manufactured in Nigeria and factory's managing directors and others have been charged with negligence. ¶15. (U) Senate Passes 2009 Budget: On December 17, 2009, Senate passed the 2009 budget, two weeks after President Yar'Adua presented it to the National Assembly. The Senate did not pass the budget the President proposed. They increased the total budget to 3,049 trillion Naira (USD 22.3 billion),from the President's 2.87 trillion Naira (USD 21 billion). The House of Representatives still needs to pass the 2009 budget. When that will happen is uncertain. ¶16. (U) Inflation rose to 14.8 percent in November 2008: Nigeria's inflation rose to 14.8 percent in November from 14.7 percent in October 2008. The Nigerian Bureau of Statistics attributed the slight rise to the increase in the prices of staple foods such as maize, yam, cord, meat, fruits and vegetables. ¶17. (U) Nigeria gets draft law for nuclear power: The Nigeria Atomic Energy Agency (NAEA) on Friday December 19 received a draft legal framework which would guide the development and implementation of the nation's nuclear power program. The draft document was put together by a team of lawyers and relevant agencies in the energy and environment sectors as well as security agencies, and according to the Director General of NAEC, is critical in ensuring the success of Nigeria's nuclear power program. Nigeria has recently announced its intention to use nuclear power to alleviate its severe electricity shortage. This draft law is one step in that direction. HUDSON