Nigeria’s microcosm

It looks very much like Nigeria has managed to restart its Forcados export stream. A Suezmax tanker appears to be laden offshore, and if this is the case it represents a major milestone for the country’s approach to dealing with the restive Niger delta and demonstrates that Nigeria has made good use of its exemption from the Opec cuts deal.

Forcados coming back on stream could add 200,000 b/d to Nigerian production, taking it back up to 1.9mn b/d. None of this looked likely in the first few days of this year, when rebel group the Niger Delta Avengers (NDA) threated to unleash the biblical-sounding operations Walls of Jericho and Hurricane Joshua  “to reclaim our motherland and dislodge all cleavages the Nigerian ruling oligarchy has foisted on the region that is sustaining the ongoing primitive accumulation by dispossession”.

But since then, and despite the NDA’s threats that their enemy’s “eyes will shed blood, his ear will be more deafened and his heart shall quake”, nothing. The government has been talking and, most importantly, paying for peace.

The timing of the Forcados restart is of interest. Will Opec, at its meeting in Vienna next week, deem Nigerian output to be sufficiently recovered now that the country must join in with what looks likely to be an extension of the production restraint deal?

Nigeria, which has big plans for increasing its production, could argue not. It could point out that the situation it faces in the delta is a microcosm of that faced by Opec as a whole, as the group strives to bring the oil market back into balance.

For both, there is an issue that looks like it requires permanent management; this issue is taking more time to resolve than those in power would like; it is putting further uncomfortable strain on already-stretched finances; a move toward resolution is requiring the making of strange bedfellows; and there is a belief that all this pain is worth it because the alternative is too dire to consider.

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