Three months ago, we introduced reaeders to the Niger Delta Avengers (the NDA): a mysterious Nigerian militant group, which appeared out of nowhere, and which as we said at the time, “held the price of oil in its their hands”, as a result of its relentless – and successful – attempts to sabotage Nigerian oil production. Back in May, the NDA was cited by Goldman as one of the key reasons for the ongoing supply disruptions that had led the bank to push up its short-term crude oil price forecast (even as it cut its long-term one).
This is what Goldman said at the time:
The inflection phase of the oil market continues to deliver its share of surprises, with low prices driving disruptions in Nigeria, higher output in Iran and better demand. With each of these shifts significant in magnitude, the oil market has gone from nearing storage saturation to being in deficit much earlier than we expected and we are pulling forward our price forecast, with 2Q/2H16 WTI now $45/bbl and $50/bbl.
The recent roll-over in production is the result of somewhat offsetting cross currents. (1) Production has rolled over faster than we had expected in China, India and non-OPEC Africa more than offset upside surprises in the US and the North Sea. (2) Transient but recurring disruptions have more than offset larger than expected Iran and Iraq production. And while some of the disruptions will stop such as maintenance, fires and strikes, some are likely systemic, for example in Nigeria, and we now expect production there will remain curtailed for the remainder of the year. Net, this leaves us expecting a sharp decline in 2Q output.
Furthermore, the NDA’s constant unwillingness to engage the government in any discussion on a compromise suggested to some that the NDA may be merely a (well-funded) front for some offshore entity, either corporate or sovereign, which was provoking unrest inside Nigeria in hopes of keeping domestic supply low thanks to disruptions and thus, the price of oil high.
That, however, changed dramatically overnight, when the Niger Delta Avengers announced on their website, that it would cease “hostilities in the Niger Delta against all interest of the multinational oil corporations,” to support talks with govt to end conflicts adding that it promises “to fight more for the Niger Delta, if this opportunity fails.”
As AfricaNews reports, “The Nigerian militant group, Niger Delta Avengers (NDA) has announced a ceasefire and readiness to engage in talks with the Nigerian government. The group, which is calling for a greater share of Nigeria’s oil wealth to go to the impoverished Delta region, has sabotaged Nigeria’s oil production bringing its yields to a record low. In a statement distributed to the media on Saturday night, the NDA said it has undertaken to “continue the observation of our unannounced cessation of hostilities in the Niger Delta against all interests of the multinational oil corporations.”
They however said they will continue to “adopt our asymmetric warfare during this period” if security agencies “arrest, intimidate, invade and harass innocent citizens, suspected NDA members and invade especially Ijaw communities,” it warned.
It said it will support a collective negotiating team from the Niger Delta “to engage with the federal government of Nigeria, representatives from the home countries of all multinational Oil Corporations and neutral international mediators.”
The NDA has claimed responsibility for many pipeline explosions in the oil regions of Nigeria. The government had said in June that they had agreed on a one-month ceasefire with the group and talks were ongoing, but the NDA later denied the claim.
The struggle has always being a Pan-Niger Delta one, we only know the anti Niger Delta elements are using some disorganized characters from the region to scuttle all effort to restore the essence of our humanity; resources control and self-determination.
We are going to support any collective/negotiation team emerging from the Chief (Dr.) Papa Edwin Kiagbodo Clark Niger Delta elders and genuine stakeholders conference to engage with the federal government of Nigeria, representatives from the home countries of all multinational Oil Corporations and neutral international mediators that will be focused on achieving the short, medium and long term frameworks and objectives to de-escalating conflicts in the Niger Delta. Most of the frameworks and objectives are clearly stated in various reports, declarations and recommendations of the likes of the Sir.Henry Willinks minority rights reports of pre-independence Nigeria (1957-8), The Kaiama Declaration document, The General Alexander Ogomudia report, The Leedum Mittee headed, Niger Delta Technical Committee report and restructuring to fiscal federalism.
We have resolved to reject any idea of the peace of our times; we want the peace with honor this time around! Our advice to our Niger Delta elders and genuine stakeholders is that, whenever this inhuman project called Nigeria and her government is ready for dialogue/negotiations with them, this mandate should be treated with that care as driving a vehicle like that of a truck laden with fire.
We are going to continue the observation of our unannounced cessation of hostilities in the Niger Delta against all interest of the Multinational oil Corporations, but we will continuously adopt our asymmetric warfare during this period if, the Nigerian government and the ruling political APC continues to use security agencies/agents, formations and politicians to arrest, intimidate, invade and harass innocent citizens, suspected NDA members and invade especially Ijaw communities.
We promise to fight more for the Niger Delta, if this opportunity fails. Therefore, we will give our Niger Delta elders and genuine stakeholders that tacit support to the dialogue table with the government and the Multinational oil Corporations whenever the enabling environment prevails.
We also use this medium to warn those using rogue platforms like the defunct so-called MEND, RNDA- Cynthia Whyte especially Charles Okah who is franchising these internet based banditry from his prison cell, through Victor Ebikabowei Ben (Boyloaf), Timipre Silva, Selekaye Ebikabowei, Ayirimi Emani, Michael Johnny, Governor Adams Oshiomole to please inform those their paymasters that the days of doom are here. That those sold and bought up interests from around the corridors of power cannot arm-twist the NDA with bandits, drug addicts, illegal bunkerers, bank robbers and disorganized characters to derail the Niger Delta struggle.
Brig. Gen Mudoch Agbinibo.
Spokesperson.
While there have been hints of a ceasefire involving the NDA in the past, this was the first formal announcement via the organization’s website, and if this arrangement can last, as much as 500,000 bpd of additional crude could soon find its way into a market which continues to remain oversupplied, and will become even more so, which means that either the crude short squeeze will have to go force virtually all shorts to cover in the coming days to push WTI over $50, or the tremendous rally in WTI, which has seen WTI close green for 7 consecutive days, will be unable to make it 8 for 8, a feat it has only achieved three times in the past decade, and not once since January 2010.
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