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Nigeria – The Significance of the Bonga Offshore Oil Platform Attack
Posted by jeffvail on June 24, 2008 - 9:45am
| On the heels of this weekend's Saudi Oil summit, Nigerian production has dropped to the lowest level in 25 years. This was in part because militant attacks shut in as much as 345,000 barrels per day of Nigerian production in the past few days. The Nigerian militant group MEND (Movement for the Emancipation of the Niger Delta) has demonstrated a continuing ability to interrupt production from Nigeria's mature, onshore fields. However, the future promise of Nigerian oil is not onshore. Rather, it is the 1.25 million barrels per day of offshore production scheduled to come on line in the next 6 years. Analysts previously believed these offshore facilities were out of MEND's reach. |
This assumption--that far offshore facilities are beyond the reach of militants--must now be reconsidered. The week's most successful attack, shutting in 225,000 barrels per day, came against Shell's Bonga facility. At 120 km offshore, the Bonga attack demonstrated a new militant capability in the offshore environment. As Nigeria is one of the few states with the geological potential to significantly increase oil production and exports, the Bonga attack may prove to be an extremely important development.
Shell’s $3.6 billion “Bonga” Floating Production, Storage, and Offloading vessel (FPSO), 120km from shore in 1000m deep water, was recently attacked by MEND militants.
Overnight on June 19th, MEND militants struck Shell’s offshore Bonga facility, resulting in Shell declaring force majeure for deliveries of 225,000 barrels per day in June and July. Then, on June 20th, militants destroyed a key Chevron pipeline near Escravos, Nigeria, forcing Chevron to shut-in and declare force majeure on 120,000 barrels per day of production. This article will analyze the significance of the Bonga attack in light of Nigeria's efforts to grow its offshore oil production.
What is at Stake?
The Bonga attack is particularly troubling because of the nature of oil production in Nigeria. A February, 2006 Citigroup report noted that "clearly most of the (oil production) growth near-term looks to be in the Nigerian deepwater and as such should be less subject to current disruptions." While offshore production currently only accounts for 16% of Nigeria’s oil production, it is expected to account for 90% of future growth. MEND has already demonstrated its capability to shut in large portions of Nigeria’s onshore oil production, and now it is threatening to re-attack offshore facilities, urging expatriate workers to abandon them immediately. Nigeria’s onshore production is already mature, and government hopes of raising total production to 4 million barrels per day are entirely dependent on the success of the offshore sector. If MEND can continue to interrupt offshore production, the prospects for any increase in production from Nigeria look dim. The situation in Nigeria is critical as Nigeria is one of the few states with the potential to significantly increase both production and exports. According to the megaprojects list on WikiPedia, Nigeria expects 345,000 bpd of offshore production to come online in 2008 (Agbami field, Oso field); 220,000 bpd in 2009 (Akpo field, Oyo field); 220,000 bpd in 2010 (Bonga North, Bonga Ullage fields); 285,000 bpd in 2011 (Bosi, Ukot, Usan fields); 250,000 pbd in 2012 (Bonga SW, Nsiko fields); and 150,000 bpd in 2013 (Egina field).
That’s 1.25 million barrels per day of new offshore production planned in the next 6 years. None of it was previously considered vulnerable to attack. Now it all appears to be within the demonstrated reach of MEND.
How Vulnerable are Offshore Facilities?
Offshore facilities are highly complex and vulnerable feats of engineering. While they are generally engineered to withstand extreme natural environments, they may not be well fortified against intentional attack. We do not know the extent of fortifications, as the specific security considerations and plans for each platform are not publicly available. It makes sense, however, that to the extent the threat from MEND was considered to be non-existent at the time that all scheduled Nigerian megaprojects entered development, fortification against attack was not a significant design criteria.
There are spectacular examples in the past of the vulnerability of offshore facilities. The most famous is the Piper Alpha platform explosion in the North Sea, which resulted in 167 deaths and one of the largest insured financial losses in history. While I am not an expert in seizure or defense of offshore facilities, I do have some qualifications in the area: I participated in planning of the 2003 GOPLATS operation that successfully seized Iraq's southern offshore oil platforms. For obvious reasons, I won't dissect the vulnerabilities of offshore facilities here, but I will offer my opinion that exploitation of the vulnerabilities are within the reach of a group like MEND. While MEND's attack on Bonga was far short of a textbook attack on an offshore facility, it is probably not beyond MEND's near-term capability to inflict significant, lasting damage to Nigeria's offshore facilities.
The Piper Alpha platform on fire in the North Sea, 1988. Can MEND inflict this level of damage?
MEND: Potential for Innovation & Improved Capabilities
The Bonga attack highlights the recent development's in MEND's offshore capabilities, and demonstrates the group's ability to continue to improve its tactics in the near term. Comments as early as 2006 noted that MEND’s offshore capabilities are continuously improving, and that facilities as far as 50-60 km offshore may be at risk. Bonga is twice that far offshore, at 120km.
I predicted a year ago that MEND would increasingly focus on Nigeria’s offshore facilities for two reasons: 1) to differentiate their ideologically-grounded struggle from the privateers and criminal bunkering that is also interrupting Nigerian production; and 2) as a result of the innovation that naturally results from their decentralized structure. While this most recent attack showcases MEND’s ability to operate in the deepwater environment, it also shows MEND's potential to greatly increase the impact of future offshore attacks. MEND’s press release stated that their goal was to gain access to and destroy the facility's main control room, but that they were unable to do so. MEND's limited success, however, most likely identified to the group the specific capabilities, training, and equipment it will need to better succeed in the future. This process of tactical improvement forms a larger cycle of innovation (an OODA Loop).
The recent attack highlights three significant and separate advances by MEND: targeting, naval equipment, and training. By attacking far-offshore infrastructure that was previously considered beyond its reach, and by selecting projects that are key to the Nigerian government’s revenue plans, MEND has accurately identified a very high return on investment target. This demonstrates an advancement in their ability to pursue “effects-based targeting”—that is, the ability to carefully select targets that produce the desired ultimate (here, political) effect. For MEND, the desired effect is to force the Nigerian government to better meet the needs of the Niger Delta peoples. Previous tactics of kidnapping and attacking pipelines were imperfect choices for several reasons: they spawned criminal activity within the Delta, they increased pollution in the already polluted Delta region, and they did not effectively compel the desired action on the part of the Nigerian government. While it is yet to be seen if the current targeting choices will be more successful, in my opinion they represent an advancement in skill.
The Bonga attack also demonstrates a significant advance in MEND’s ability to operate far offshore. While MEND has always been noted for its riverine naval capability, its success 120km offshore suggests an improvement in naval equipment. No information is available on what types of watercraft were used by MEND in the recent Bonga attack, but at a minimum MEND has established that its boats have 120km range.
Additionally, the Bonga attack required a fairly advanced set of navigation skills. Standing in a rigid inflatable boat, at 1.7 meters above the water, the visible horizon is only 5km away. Even if Shell’s Bonga facility flares at 100m above the surface, the flare is still below the horizon at 40km. Reports that the attack commenced at 1 a.m. suggest that MEND has developed fairly advanced offshore and nighttime navigation skills, that Nigeria’s naval presence in the region is not currently capable of protecting offshore facilities, and that all major Nigerian offshore facilities are within MEND’s reach.
Finally, it is important to discuss the potential tactical race between offshore defenses and militant offensive capability. This is a situation of competing OODA loops--whichever side can innovate and learn from past experiences most quickly will prevail. Here, MEND enjoys two significant advantages over offshore operators. First, the decentralized nature of MEND allows it to try many different approaches, accepting failure of the vast majority of attempts. MEND can try 50 different ways to attack an offshore facility--only one needs to succeed to inflict massive losses that provides a high ROI on its investment. Oil companies, on the other hand, have one opportunity to get their defenses right or they risk losing a multi-billion dollar facility. While oil companies do have the opportunity to learn from past militant mistakes, they don't have the luxury of learning from successful militant tactics without great cost. Second, oil platforms are fixed assets. While MEND can choose the specific target, time of attack, mode of attack, and staging area at will, oil companies must defend all fixed position at all times, and as a result permanently cede the initiative to their opponents. Any armchair general will recognize that this is an unenviable situation that heavily favors MEND.
Conclusion: Geopolitical Feedback Loops in Action
The recent attacks in Nigeria should be viewed as a product of geopolitical feedback loops. I’ve written previously about these feedback loops in operation in Nigeria, and will begin to reassess and update them in upcoming posts. These phenomena significantly undermine Nigeria’s ability to deliver on their potential to increase oil production and exports. While it may be tempting to view these geopolitical feedback loops as separate from the geological phenomenon of Peak Oil, it is more accurate to view the geopolitical factors as a direct result of geological peaking—-but for geological factors, disruptions in Nigeria would simply cause oil exploration and production to move to other, equally fertile grounds. Instead, the geological reality that there are very few “geologically fertile grounds for increasing oil supply” forces companies to accept the high costs of doing business in Nigeria.
MEND has made it clear that its recent choice of target was not chance. It stated in its press release that "The location for today's attack was deliberately chosen to remove any notion that off-shore oil exploration is far from our reach." Rebels followed up the Bonga attack by announcing a unilateral truce June 22nd to "give peace and dialog another chance." This suggests we will have at least a short break before the next offshore attack. Unfortunately, it will also allow MEND time to integrate lessons learned from the Bonga attack and to prepare for the next wave of operations. This break is also an important political step for MEND to maintain its image as legitimate and principled freedom fighters in the eyes of the Delta peoples, and not merely a group of criminal thugs. It should not be viewed as a sign of either weakness or abandoning plans to conduct further offshore attacks. This reading of the "truce" is supported by the concurrent strike by Nigerian oil workers that named Shell as an "enemy of the Nigerian people." Assuming that the Nigerian government won't meet MEND's minimum demands, we are likely to find out within a few months just how much offshore capability MEND has...
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The problem is oil brings in wealth, but doesn;t create a lot of jobs. So - there a lot of disenfranchised people that feel they should benefit from the new wealth, but are not needed to get the oil. Unfortunately their governments are not inclined to share the wealth. Mexico is attempting to solve their problem by encouraging their excess labor to go North.
The way I see it - the only answer for these governments is to do what we did during the depression - massive public works projects. Will they do it - probably not! So - look for more troubles.
Your point underscores two alternative "geopolitical feedback loops":
A) In the eyes of the average citizen, government fails to adequately distribute oil revenues. Result: violence, lower production & exports at higher cost.
or B) Government does its best to use oil wealth for the benefit of its citizens, and in doing so realizes that limiting production now to a certain extent 1) maximizes revenues, and 2) preserves oil wealth for future generations when it will likely be more valuable. Result: lower production & exports.
It's not a strictly A or B situation, but the danger (from the sense of oil supply) of avoiding one scenario is that the alternative may be just as bad, or worse... I agree that A is the most likely, but what happens if MEND "wins"? While they may fail at pursuing their own best interest due to corruption, short-sightedness, etc., their best interest may actually be to maintain lower levels of production...
Not to mention if you take option B, the US will call you a tyrant and accuse you of supporting terrorism. :)
More, the US (and the Western countries generally) and their corporations have systematically corrupted these gov'ts in order to get the oil (and other resources), and then turns around and calls them -- yes, corrupt -- when they in any way don't fully comply.
With respect to your (B) scenario, I'm skeptical that a government or rebel group would regard offshore oil operations as stable enough in the long term to consider saving those reserves for future generations. In the coming oil-short era, the country could easily lose access to offshore assets.
Onshore oil could more plausibly be kept in reserve. Sure, it could.
In the government's place, I would want to pump as much as possible from the offshore fields, then invest the resulting cash in some modernization project inside the country.
The plan is simpler than that.
Pump oil as fast as possible.
Deposit money in Switzerland.
Leave when there is nothing left to loot.
This is exactly the issue. I'm not saying that (B) is a likely scenario (rather, I think that A is far more likely in Africa), but just pointing out that (B) won't necessarily improve the export situation either. It would, I think, greatly improve the lives of the locals, but but it violates one of my laws of human behavior: any solution that requires many people to suddenly behave better than they have in the past is doomed to failure...
I can't remember where I read about it, but hasn't the per capita income in Saudi Arabia declined precipitously over the past 15 years despite oil expansion? I wish I could remember where I read about it, because it was a good article on how the concentration of wealth had the potential to increase social tensions. This would give more incentive for people to explore extremist groups and perpetuate the cycle.
EDIT: Here is some info on the per capita income piece. It doesn't delve into the ramifications, but it's interesting.
Yes, but its mainly due to importation of labor which is breeding like rabbits and creating a lot of uneducated youth that doesn't fit in. The locals are doing better than ever.
Isn't that a mite haughty of you sir? Even if it is a bit cheeky of the imported labor to engage in acts of procreation and such. Of course since they lack your erudition they would not understand why one might call you an arrogant xenophobe of an effete snob, now would they?
That might be so, but the link between income and population growth rate is well established. Rich people don't have as many children.
While not the same, I posted an average per capita GDP figure of $22,080 yesterdaay on another site, which was a rise Y/Y. This site shows estiamted 2007 Saudi per capita income at $20,700. Wikipedia provides a conflicting figure and this little historical context:
This item gives 2006 per capita income as SR55,216 or US$14,725 at current exchange rates. Juan Cole also has an item at his blog about current Saudi conditions, to which I posted the comment mentioned above.
The population is likely to top 30Million this year, while oil sales alone will likley top 1/2 Trillion.
To put this in perspective the GDP of the state of Calififornia is 1.7 Trillion.
http://en.wikipedia.org/wiki/Economy_of_California
Per capita personal income was $38,956
Population of California is 36 million.
http://quickfacts.census.gov/qfd/states/06000.html
Total Saudi GDP is 1.1 trillion.
http://en.wikipedia.org/wiki/Economy_of_Saudi_Arabia
Per Capita oil usage for California is 18 barrels a year or 1.7 mbpd.
http://www.statemaster.com/graph/ene_pet_con_percap-energy-oil-consumpti...
If I was doing the economic planning for the Kingdom I would want the oil prices to at least double or triple over the current prices. And if I was also aware of the mature nature of the oil fields and rising consumption I would be shooting for a final price 5-10 times the current price with a diversified petrochemical industry using the majority of the remaining oil and NG as feedstocks with fertilizer and plastics being major exports. The assumption is that production from Ghawar and the other old fields will pretty much collapse over the coming few years leaving Saudi with long term production levels between 6-3 mbpd and internal consumption around 3-4 mbd and a population between 40-60 million.
Outside of the price projection I'm using to figure out how much money Saudi needs to inject in its economy to bootstrap a more general one based on value add finished products and probably light manufacturing the Saudi's are actually taking all the right steps to reach the goal of a oil centric but diversified economy. My expectation for production may be pessimistic but they have to even with the current production estimates see oil at least double in price to transform their economy. Triple is quite reasonable. 5-10 times is needed if Ghawar is potentially on the verge of collapse in production because of water problems with horizontal wells.
Also one would think the goal is a much higher per capita income approaching 100k with a large slave work force. Take your pick on projections but its a safe bet that KSA will never increase production to encourage a lower world oil price.
I agree with your assessment, Memmel. As shown by my post, just trying to get basic figures to inform others isn't easy. The news bit by al-Jazerra posted at Juan Cole's blog linked above I found very interesting, which I tried to set forth in my comment at his site. Too many people are ignorant of the very complex challenges Saudis face, internally and externally, with the very rapid population growth being #1, IMO. Their whole oil and gas biz should be manned and managed indigenously, and its armed forces should be the equivalent of Israel, but Saudi fails on both accounts. Include food security, and the Saudis have a very steep hill to climb. Then as you mention, there's the need to produce value-added petrochmeical products, and to prepare for the day when the feedstocks slow to a drip. Ideally, there'd be a dynamic allowing the Middle Eastern countries to solve their shared problems in a cooperative manner. The Gulf Cooperation Council is the nascent vehicle providing that dynamic, and it now includes Iran, but they have a long road ahead and need to start by eliminating the Imperial presence and its divisive influence ASAP. Just that sort of alliance is the US and UK's worst scenario. The GCC should bury the Carter Doctrine in a very explicit fashion. Abdullah is probably the most independent Saudi King to date. Time will tell how erudite he is.
What would your source be for that little gem of information? The Secretaría de Gobernación? The Secretaría de Relaciones Exteriores, maybe?? Or would that be a quote from the Minuteman's Border Guard Bible?
Um, the fact that ten percent of the population of Mexico is already living in the US?
This is such conventional wisdom I'm surprised to see it being debated. One sees periodic reference to Mexican officials stating that, in candid moments, they'd have revolution if it weren't for the safety valve of the U.S. for the young and restless.
1-"I participated in planning of the 2003 GOPLATS operation that successfully seized Iraq's southern offshore oil platforms."
2-This suggests we will have at least a short break before the next offshore attack."
About one. Are you advising now on how Shell/BP get back into Iraq?
About two. The assumption is that Chevron, Shell, Nigeria will do
nothing to accommodate MENDS wishes.
Is that correct?
1. No. Not sure how that relates?
2. My opinion is that Chevron, Shell, and Nigeria will not meet MEND's minimum demands. If it is politically tenable to do so, the Nigerian government may try to placate MEND, but if past efforts to placate militants are any indication, this will be nothing but token gestures. Likewise, Shell and Chevron will probably continue their current policy of projects among the Delta communities. These can be viewed as either genuine efforts to compensate the Delta peoples for the resource extracted and environmental damage incurred, or they can be viewed as token gestures intended to temporarily buy them off--I don't have any insight into the intent of the policies, but I do know that both Shell and Chevron are corporations with fiduciary duties to their shareholders that trump any perceived duty to the Delta peoples. To the extent that duty to shareholders to maximize profit is mutually exclusive of duty to Delta peoples, the former will win.
OK, let's try again on 1.
Are Chevron/Shell paying for your services now on how best to protect their infrastucture?
Would you advise them to to follow Saddam's route of putting
money/services into local economies, pricing oil in a basket of currencies, not pumping at max as being less expensive
than constantly sustaining losses to MEND?
Ahhh... sorry, misunderstood the question. No, I am not advising Chevron or Shell on protecting their infrastructure. I think that the structural minimum demands of the Nigerian government, the international oil companies, and MEND are an example of mutually-exclusive overlap. They all make demands on the oil production, but all of their minimum demands cannot be met simultaneously. Shell and a sovereign Delta nation could potentially work things out, but this would never be acceptable to the Nigerian government that is dominated by other ethnic groups and concerns and is dependent on oil revenues to address problems elsewhere. Likewise, Shell and Nigeria have already come to terms that work for both of them, but don't satisfy the minimum demands of MEND. So, bottom line, I don't think there is a viable solution to the problem, and I think it will only get worse as we pass a global peak in oil production.
Once you realize that Nigeria's oil exports would be very low if the Nigerian people had a lifestyle even remotely similar to that of the US then you realize that its effectively impossible for the big oil companies to support economic growth and parity in the oil producing countries.
http://en.wikipedia.org/wiki/Demographics_of_Nigeria
The population is close to 300 million.
The math is trivial and stark.
Memmel
Great to read your posts as always.
Here's a clip from an article by Captain Hook, A financial writer.
Hey, It's not genocide, it's just economics
Right on.
From what I can tell the first large nations to go will be in no particular order.
1.) Egypt
2.) Bangladesh
3.) Pakistan
4.) Philippines
5.) Argentina ( Potentially some other South American country )
A lot of people don't realize that the combination of spiraling food and fuel prices have in my opinion put these and a few other countries on a path to explode within a few years.
My best guess is Pakistan followed by Egypt. This is with todays current prices assuming no further increases I think these countries will fall into civil war.
Certainly other factors are at play but food and fuel will push one these or a similar country over the brink.
The problem of course with this economic warfare is that the per capita demand in the countries that fail is low and very inelastic so we don't get a lot of gain because of these countries failing.
This link, which tries to give a vulnerability to peak oil rating, agrees about Bangladesh, with by far the lowest security rating of any country, and has Egypt second.
They don't list the others you mention.
http://wolf.readinglitho.co.uk/mainpages/countries.html
Which countries are best equipped to survive peak oil?
Japan and the UK both get poor ratings among developed countries.
1.) Norway
2.) Norway
3.) Norway
4.) Canada
In that order :)
DaveMart:
Good link - their summary has Bangladesh to go first. This means a few million arriving in the UK - just in time to tip us into the 2nd place collapse
No. With airlines starting to close down, that is not possible. These boat people will try to make it along the coast, towards the South East, all densely populated, nowhere welcome. Finally they will end up in the North of Australia. The Kakadu National Park offers a natural environment not dissimilar to Bangladesh. Australia will also have a moral and possibly even legal responsibility to take Bangladeshis as climate refugees (sea level rises). "Environment" Minister Peter Garrett (Midnight Oil singer) has just approved a new coal terminal at Gladstone, Queensland, which will process coal worth 60 million tons of CO2 pa.
The way climate science advances chances are high one day climatologists can calculate that it was the burning of this and other coal expansion projects in Australia after the IPCC 4th report that brought about the tipping point for some ice sheets. Well done, Peter. Hardly any of your voters would have expected you would do that.
That is an interesting list and I don't dispute it,with the possible exception of Argentina.
The real wild card is Pakistan which is the only one to have nuclear weapons.It is also extremely unstable politically.Any thoughts on that?
Yes I think the invasion of Afghanistan was multiple reasons not just one. Not only to put troops on the Iranian border and near the Stans but also to act as a staging ground for the take over of Pakistan when needed.
I'm assuming that with quick action most of the nuclear weapons can be contained although if a few slip out say to Iran I'm pretty sure no one will shed a tear.
We would only need a rumor of this happening to expand the war into Iran and later the stans. Given the population and economy of Pakistan a collapse at some point in the future with even tight world oil supplies was pretty reasonable and its obvious that the expectation was oil would be a valuable resource.
So with Pakistan depending on how things go we could well see the US instigate a fall of the regime if the Iranian attack is delayed. Think of it as the plan B for control of the worlds oil resources. You can see how rumors of proliferation of nuclear weapons from Pakistan can help initiate control of the Stans and Iran.
Despite my dislike of the current Administration its position the US perfectly to execute a plan to control most of the worlds oil supplies and leave Russia looking at war across all its borders and nuclear strikes. Russia is already effectively checkmated in the coming resource wars. It cannot survive a multi-front war and I'm sure it knows this. The US is effectively set up already to cut Moscow off from Siberia. Only Iran stands in the way of world domination.
I don't expect the actual collapse to happen without external influence simply because all of these nations represent staging grounds for taking over a lot of the worlds resources even Bangladesh which puts US troops on the ground on China's southern flank and positions them to take over Burma and thence most of South East Asia.
The Vietnam war was in my opinion fought to establish a large US military presences in south east Asia in anticipation of a eventual conflict with China hopefully after they have fought a war with Russia over Siberia.
I did not go into it but this is why I added Argentina to the list it seems to be the prime collapse candidate for take over of South America. I could well be wrong but the US will need to collapse one of the South American countries to initiate take over eventually of Brazil and Venezuela. Mexico provides the northern route.
In any case plans for a eventual third world war centered on resources seems to have been formulated long ago possible in the closing days of WWII. Its evolved over time certainly but given that once I started thinking of how I'd position to fight and win a resource war and given that the historical moves of the US match up pretty much perfectly ( given defeats and wins ) with what one would have to do to fight and win the third world war I can't believe I'm the only one that worked all this out.
Also the use of troops to stabilize collapsing countries explains how the US will be able to revive the draft. It won't be done for outright aggression but to support police/humanitarian actions.
I'm impressed with whoever in the military figured all this out they are some incredible strategists. Despite problems with execution and above ground factors the US has some incredible and chilling strategic military goals that seem to have remained consistent and focused since WWII. This is literally across generations of military planners.
Although many people claim that most militaries focus on fighting the last war it seems the US has always been focused on WWIII I guess this was driven by the cold war.
Truman Doctrine for 60 years.
I don't agree that Russia is checkmated.
And the US is stretched both domestic,foreign.
" The quagmire in Iraq is in its sixth painful year with no real end in sight and the forgotten war in Afghanistan is well into its seventh year. The "dead enders" and other armed factions are still alive and well in Iraq and the Taliban in Afghanistan again controls most of that country. Gas prices have now reached an average of $4.00 a gallon nationally and several analysts predict the price will rise to $5.00-$6.00 dollars per gallon at the pump by Labor Day. This, despite assurances by some major supporters of the decision to invade Iraq that the Iraq war "will pay for itself" (Paul Wolfowitz) or that we will see "$20.00 per barrel" oil prices if we invade Iraq (Rupert Murdoch)."
http://www.informationclearinghouse.info/article20164.htm
All a couple of the nations you say are targets have to do, is
stand down to let the US fall into the trap of Germany vis a vis
it's "victory" over Russia in WWI.
I find your link entirely credible, if depressing.
It is perhaps unlikely though that standing down will save anyone, as both the the US and Israel are currently operating far beyond reason.
An excuse can always be manufactured, advice selectively listened to, and so on.
The fact that members of the Bush administration have avoided the consequences of clearly criminal behaviour will serve to encourage them.
Irrational plotting and unrealistic plans in Tel Aviv and Washington resemble Berlin before the first world war, with protagonists hoping that hubristic plans would somehow come good, however much reason indicated disaster.
Another drumbeat is up so not sure how many will see this.
I'm just trying to figure out the military angle post peak I think in general I'm pretty close to correct on the plan if you will. How it executes in practice who knows. And of course its not stagnant and has to change with opportunity.
The key point with this military approach is to think about the world political situation that would allow it to happen. Given Iraq happened in a more constrained political climate.
What I find disturbing is that for the US at least if it executes the military gambit then we would have to institute a draft and go on a real war time footing.
Also real colonial rule is very harsh much worse then anything seen since world war two with genocide as part of the picture.
thirra--
I agree that Argentina is also off my list. Small, well educated population, immense hydo resources, perfect latitude and soil combination, and open to new economic and social models.
Plus, with South America becoming a economic unit, oil and gas resources could possibly be allocated reasonably. Columbia is the only client state left for the US, now that Paraguay has elected a new government.
Right Columbia is the current client state so its not on the list.
This leaves Argentina as the target for destabilization. I think your ignoring the history of Argentina
http://www.state.gov/p/wha/rls/rm/30360.htm
It may well become a docile client state but its still in my opinion the to contender for instability in South America outside of a obvious war between Columbia and Venezuela. The economic structure is fragile.
http://www.theoildrum.com/story/2006/10/5/215316/408
Actually I'm quite familiar with Argentina's past, and see it as a plus for survival. A very politically literate population. I don't expect military action from the US---
They can hardly maintain the road from the airport to Baghdad.
I have spent a bit of time in South America, and , if there is such a place, it is starting to look brighter.
I do agree with your other analysis fully, and appreciate your good insight.
Sure I readily admit its the "default" choice for South America based on a strategy of sending in troops to stabilize countries that start falling apart from peak oil.
I might add that we have every indication that action by the US in South America probably won't take place until after it secures Mexico and Central Americas. It hard to tell what the political landscape will be like at that point but obviously the US will have to do something to prevent the South American nations from arming esp with nuclear weapons to prevent a US takeover. A Venezuelan/Columbian conflict is the obvious plan A but Argentina looks like the only viable plan B using the collapsing nation gambit.
Given how the geopolitical climate will polarize over the coming years the formation of a South American super power along the lines of the EU is a very real threat to the US. This consolidation has to be prevented at all costs.
Look at the historical meddling of the US in South America and I think you can see the US has always recognized the sleeping threat of South America.
I'm not entirely sure that I buy it Memmel.
The US proved that it could invade a 3rd world regime over flat terrain - that's a world away from fighting across mountains (Iran & Stans). You rightly say that Russia couldn't fight a war on multiple fronts - but the USA could? I really doubt it.
The US military has also shown itself rather inept at maintaining "peace" in an occupied country (Iraq, obviously, also Somalia). Its been argued that they're deliberately keeping things tense in Iraq etc, which may have an element of truth, but a simpler explanation is that US troops just aren't very good at the post-war occupation of foreign nations. If they really intend a war to control resources then they'd have to do this a whole lot better, as its pretty easy for insurgents to disrupt oil production and transportation.
Well colonial rule works I posted a bit about this above.
The US can certainly bring Iraq under control if it chooses two. In general colonial rule is harsh with genocide not uncommon. Don't mistake the lack of taking this option with the inability to take it.
What are you suggesting? Preemptive military intervention by the US in South American countries?
Economic boycotts?
As a native born Brazilian, US citizen, of European descent and possibly of a slightly different world view than your own, I think you may be missing a rather important point. That is, other than obvious fact that a strategic alliance between the countries of North, Central and South America might be somewhat more advantageous, The US no longer has the means to force their will on these, or any other people for that matter, without destroying themselves in the process. If you think fighting battles with indigenous people in the deserts and cities of the Middle East is fruitless then you ought to take a trip through the Amazon or the Andes to get an idea of how daunting such operations might be.
I think the Americans will be a lot better of if they learn to Samba and Salsa and judging from the attitudes of some of my business customers that process is already well underway. Why fight it if you can join them?
No doubt don't disagree but if the US goes down this road then its obvious that genocide will have to be a large part of controlling these countries.
Thats the disturbing part.
Can it be done sure. We have not seen a war fought with all the weapons that the US has including chemical weapons and destruction of crops to cause famine.
And even potential use of biological weapons if needed and certain types of nuclear weapons.
The US has the military means to pacify and control most of the countries in the world. The fact that the US is canning various generals probably ensuring that the command chain is willing and able to wage all out war is disturbing.
I agree 100% that the US should stand down and get out but so far at least it seems to be determined to take the role of colonial power.
thirra and memmel,
In case you haven't seen this, I heard part of the interview:
http://www.democracynow.org/2008/6/10/descent_into_chaos_ahmed_rashid_on
“Descent Into Chaos”: Ahmed Rashid on How the US Aid to “War on Terror” Ally Pakistan is Aiding the Taliban.
Veteran Pakistani journalist Ahmed Rashid explains how the US ally Pakistan has armed and financed the Taliban after the US invasion of Afghanistan; how the CIA pays Pakistan to arrest al-Qaeda operatives, but Pakistan uses the money to fund the Taliban resurgence in northwest Pakistan; and how the US and NATO’s failure to deal with Afghan civil society has led directly to the huge rise of the opium trade that funds the Taliban. [includes rush transcript]
Interesting read.
Reminds me of an old TOD:Canada article.
http://canada.theoildrum.com/node/3091
So the majority of the possible population crash will likely happen in less developed countries.
Does not surprise me one bit.
Considering that China, Russia and even the US are all in their own way preparing for something colossal.
Russia centralizing government, some stockpiling and developing internal resources (arctic).
US centralizing government and securing external resources.
China stockpiling resources, developing indigenous technology assets and securing external resources. (Government already centralized.)
Whereas less developed nations have no resources to speak of and are having trouble getting by as it is.
Of the industrialized nations EU-countries will probably be hardest hit by Peak Oil. Inefficient government. No stockpiles except in some northern countries. Some external resources as some are part of NATO.
300 million ??
The population of Nigeria is 140 million.
Opps sorry dyslexia strikes again.
http://en.wikipedia.org/wiki/Demographics_of_Nigeria
This does not change any of the arguments the population would have to be well below 30 million or so to make a wealthy robust oil powered society given their production levels. Its off by orders of magnitude.
memmel
Nigeria is only 141 million people, not 300 million.
Its about 1/10 the geographic size as USA
um, the population of Nigeria is currently about 148 million, according to a UN estimate.
http://en.wikipedia.org/wiki/Most_populous_countries
how is that "close to 300 million"?
Thank you for your response.
So Shell, Chevron must see the dilemma they're facing.
Constantly wondering whether Lagos or MEND has the upper hand.
It so reminds me of Dune. Who has the power to destroy
owns the Spice.
While Angola's Cabinda province can look forward to same.
"Is Angola a budding success story or the next Nigeria?"
Then clearly, if you're right, the duty of the Nigerian government is to kick these companies out, charge some of their leaders with human rights violations and nationalize the oil. Then try to help their people, get rid of the pollution, etc.
Here, the problem becomes one of "colonial cartography." Britain set up the boundaries of Nigeria with no regard for internal homogeneity. IF you accept that Nigeria is a Nation-State, where the constitutional legitimacy of the state is some hypothetical Nigerian "nation," then it may be in that nation's best interest to sacrifice the Delta for the greater good. However, if you look at the Ijaw or Igbo people of the Delta as separate "nations," then the Nigerian government has no constitutional legitimacy to act for them under the Nation-State model. This is what gives rise to the current violence, and will only get worse as the divide between non-state nationalist groups and market-states grows wider. So, to the extent that the Nation-State of "Nigeria" is a valid model, their duty is not specifically to the Delta peoples. However, if in some future world there was a sovereign Delta Nation-State, then the duty of that state (at least under the constitutional model of a Nation-State) would be something like what you suggest.
Thanks for that explanation.Not for the first time do we see arbitrary colonial boundaries causing all sorts of mayhem after independence.
With the weakening of central governments due to the energy crisis and other factors these ethnicly homogenous regions will go their own way.This will happen also outside of Africa.
Back to tribalism.
You are so right about "colonial cartography!" Nigeria is an amalgam of over 200 distinct ethnic groups, which creates a "nationalities problem" beyond any the FUSSR had. Nigeria is an interesting case and quite important, so I took on the task to educate myself with these books: Crippled Giant : Nigeria Since Independence (98 Edition), Groundwork of Nigerian History [a standard text], Affixing Fragmented Nigeria: The Scramble for Africa Must Stop, and A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria. I advise starting with Groundwork and then diving into the other three. Those wanting an insight into how Oil works to corrupt should get Petrotyranny, which devotes a chapter to Nigeria's experiences.
A National Geographic article reported that in 2005 the Niger government earned 60 billion dollars from oil, yet some of their people have to live on less than $1.00 per day.
Divide 60 billion by the population of Nigeria.
Then deduct the sweeteners any government in Nigeria would have to give to its supporters, or it would not remain in power.
Hmmm. I would think that protecting a far offshore platform would be easier than near, mainly due to reasons of target identification, especially if there is considerable marine traffic near inshore. Unless MEND has missiles or long range artillery, the platforms are easily defensible from water-borne attack. If the oil is being pumped ashore, that presents a different problem, but could that be solved by loading directly onto tankers?
I would guess that the main threat would be from sabotage by platform workers, in which case they'd have to get rid of all local workers and import reliables. That could be a problem in itself when there is general political instability.
In any case the cost of defense is going to raise the cost of production significantly.
I think you're right: the clear terrain around offshore platforms is definitely an advantage for the oil companies, especially when compared to the dense terrain surrounding onshore facilities in the Delta.
However, I don't think it's far-fetched for MEND to use rockets, artillery, SCUBA, small boat swarming tactics, or other means of attack that negate the advantage of clear terrain. They have already taken advantage of night (which minimizes terrain advantage offshore), and likely used very low radar-cross-section RIBS for the Bonga attack (though we don't know this for sure, and even if so it may have been unintentional). It's certainly something that MEND will need to address, but this bring the situation back to dueling OODA-loops. Whoever innovates, adapts, and corrects most quickly will prevail. For the reasons mentioned above, I think MEND has the advantage here.
WEll, Jeff, I know a bit about radar and a good system can be tuned to pick out floating objects the size of a basketball. The only weakness would be in heavy seas where a fleet of small rafts would be difficult to track. Shell could take a cue from DEA and get those downward looking radar baloons. I suspect, however, that the corpo oilmen are ill unprepared for this sort of thing. Four GE miniguns and a half dozen 50 cals. is all they really need for a good defense. I suggest they hire Blackstone and declare the second half of the Force Majeuer [sp?] clause (self-defense).
See my comment below, but the problem becomes one of false positives. You can design a radar system to pick up nearly anything, but generally need to either discriminate returns so precisely that you risk failing to identify something relevant or getting so many false positives (e.g. every piece of floating debris) that the system gets ignored. Most target acquisition radars radars use a Doppler threshold to discriminate, but this makes the system blind to any aggressor that remains within the "Doppler notch" of the radar. There is no such thing as a perfect radar system.
I generally disagree with that; the real problem is the fear of gaining the public spotlight for killing poor BLACK freedom fighters. If they were white men it wouldn't raise an eyebrow. Big bad oil company kills poor Africans. Its like the Cole attack; the crew was ordered to disarm in a known hostile port so a war ship gets taken out by a rubber ducky. Its this kind of PC lunacy that gets them killed, not any imperfect ability to defend themselves. As a Viet Nam vet I know that kind of mentality all too well and it is DEADLY. If Shell can't stand the heat, they should get out, don't you think?
Surely a $100 handheld GPS unit ought to be enough to locate such a large target even in the open ocean? Also, won't security levels be increased in these offshore rigs to deter future attacks?
A handheld GPS would surely be sufficient, provided you have the coordinates. I'm not sure you can just walk down to the corner market in a small Nigerian village and buy a GPS. In many parts of the world, buying a handheld GPS isn't very difficult, but neither is buying an RPG. What their navigation skills seem to demonstrate is the ability to purchase modestly advanced hardware, the ability to integrate that hardware into their planning, and the ability to acquire data (coordinates) to leverage that hardware effectively. While that may seem like a very simple task sitting in an office in the US, it's something that the majority of the world's armed forces have serious difficulty with. I think it's indicative of the ability to leverage technology to meet operational needs, and on that point it suggests that MEND will be able to innovate offensive tactics faster than offshore platforms can increase security, as discussed above. Even the US Navy, which is very capable and aware of threats, would have a difficult time countering 10+ disguised fishing boats that conduct a swarming attack with RPGs... it can certainly be done, but there's no reason that MEND can't come up with a more innovative tactic than that example. It all comes back to ability to innovate tactically, and I think MEND has the advantage there.
jeffvail -
While it would be next to impossible to protect a large offshore facility from every kind of attack, a great deal can be done to thwart the more rudimentary forms of attack, such a from a bunch of guys in a speedboat firing RPGs.
The Bonga is basically a huge and extremely expensive ship. As such, I don't think it would be all that complicated or cost-prohibitive to equip it with a battery of radar-directed 20 mm to 40 mm automatic anti-aircraft guns, something that could acquire a small fast-moving target well beyond RPG range and destroy it instantly. Small anti-aircraft type missiles could also be employed. I would also think that well armed patrol boats stationed at the Bonga and capable of being hoisted aboard in bad weather would also be of value, as would a pair of attack helicopters kept on board. (Sounds like a perfect contract for the likes of a company such as Blackwater.)
All of the above are dirt cheap protective measures compared to Bonga's $3.6 billion price tag. Would they work in every circumstance? No. But they would discourage the more amateurish forms of attack.
Now if the rebels were ever to acquire even a crude submarine or submersible capability, then Houston, we have a problem. As you may recall, a small Japanese two-man sub managed to sneak into Pearl Harbor on December 7, but apparently failed to hit anything with the two torpedoes it carried. Underwater attacks by small subs of that sort are very difficult to protect against, and as large as Bonga is, I very much doubt it was designed to absorb the damage from even small underwater explosions.
Fundamentally though, the rebels do have an inherent advantage, and as you pointed out, they only have to get lucky once to cause a great deal of very expensive trouble.
Agreed... these are all good points for ways to defend offshore facilities. I think they all have weaknesses, though, which still brings the issue back to competing innovation cycles between MEND and offshore security efforts. Take the radar-controlled point defense guns, for example. Their radars can only weed out the reflective "chaff" from the ocean surface and identify a low-reflectivity target like a RIB if the boat is closing quickly on the radar (basically, target acquisition radars use the Doppler effect to screen data). Use a trolling motor at night and keep it under 10mph for the last few kilometers and they'll never see you...of course, you could defeat this with some kind of infrared system, getting right back to the innovation cycle. So, I think you're exactly right--it's quite possible to defeat more amateurish forms of attack, but given a sophisticated and determined adversary, the question will ultimately boil down to ability to innovate more quickly...
For darkness infrared is perfect. Impossible to get by, don't you think? Combined with radar balloons, the only way they could approach a platform is by submarine. Its doubtful that CEO types would be willing to go this far.
I think they still make compasses and charts! Not too difficult to use. An RDF works even better and I'm sure there's stream of radio waves pouring off that platform. As for the Navy, those poor guys are scared shirtless at firing on anything after they shot down that Iranian airliner. If you're willing to shoot first and ask questions later, then that platform is as defensible as you can get to anything but RG missiles. Anyway, I agree that the IOCs are between the proverbial rock and their days in Nigeria probably numbered.
By the way, CEO types are PR cowards; they fear bad press more than the destruction of their operations and employees :-)
Correct on the navigation comment.Cheap available GPS units combined with acquisition of coordinates which certainly one would assume could be obtained from any number of sources from supply boats and their crew, or oil field workers who certainly know where they are in the world.
10 minutes with Google Earth in a Nigerian Internet cafe would probably work as a last resort. It didn't take me long to find a "target" about 100mi offshore.
Actually, neither google maps nor google earth show the location of the Bonga platform. Their satellite imagery coverage doesn't go that far offshore, at least not in that part of the world. The specific location may be available on the internet (I haven't been able to find anything but a very general map on Shell's website), but getting the data from an insider seems more likely. Either way, proficiency in internet use opens the door to learning from oil attacks around the world...
I used data available elsewhere to find it. I was thinking more in logistical terms about what a bad guy would do. You are right that you can't zero in on it and see it that far offshore. There are more precise services that would make it possible to get detailed maps.
From Googling I learn that there is an NG line from Bonga to an on-shore liquifaction facility. I think one could use active sonar to find an follow the pipe from shore to Bonga. The local people must already know the exact location of that facility. Maybe not a practical idea. Just another example of how difficult it is to keep location secret from the curious.
Years ago I read a SciFi story about a world in which thieves operated silent running submarines to steal oil from offshore oil fields. I haven't looked for old SciFi stories on the web, but I suspect that there are lots of ideas other there for how to mess up Shell operations. I'm not in the business so I won't contribute any more to the speculation.
Click the "SHARE THIS" buttons (which are available on all our posts) and vote for our work on various sites like reddit and digg.
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I'd also like to point out that there is also potential significance here for Angolan offshore production. Angola has significantly increased its offshore production in the past year, and is now the largest exporter in Africa (recently passing Nigeria). There is potential for unrest and conflict in Angola, as discussed here, as the oil producing zone is the ethnically distinct exclave of Cabinda. The situation in Angola seems to be peaceful at the moment, but there is the potential for a chicken-and-egg situation here: sometimes the threat doesn't materialize until there is recognition of the possibility of exploiting a vulnerability. I need to be clear here: there is no indication at present that Angola's offshore infrastructure is threatened, but the mere possibility is significant given the key role of Angola's offshore production in the world export picture.
Does it seem likely that the Americans, and perhaps the Europeans, will get sucked in to providing the naval forces to protect the rigs in both Nigeria and Angola?
With a scant oil supply under threat, I can imagine that the US at least would claim that it's vital interests were threatened.
How would such a scenario, if it seems at all possible to you, be likely to play out with the sovereign power there?
It certainly seems possible that the US (or some other advanced military) sends a "peacekeeping" force to patrol the waters. Which, while it may improve security of the oil facilities, also multiples the number of targets. Also possible would be using private military corporations to patrol the area. Least successful would probably be to count on the Nigerian navy to do the job--they haven't demonstrated much competence to date, and they will remain the most susceptible to insiders, leaks, and bribes. Even IF added security measures manage to protect the platforms, at a minimum the added cost of these protections will make the oil more expensive to produce (and change the EROEI of that oil), though that isn't nearly as significant at the moment as the threat to interrupted production.
Also significant is that involvement by a foreign power has the potential to further polarize the local populace. If the Delta residents feel now like their oil is being stolen by foreign companies and nations, imagine how they'll feel when the US navy sinks a few innocent "fishing boats."
Given the money involved and the vital assets at stake, I'm amazed a PMC isn't being employed by Shell right now. If the likes of Blackwater can be used to effect in Iraq, then a no holds barred standing merc army in the Niger Delta would be ideal.
Thanks very much for your analysis.
It seems to me that this attack reveals that MEND could be funded and trained by others. As you pointed out, it is really very different to drill a hole in a on-shore pipeline and set it on fire than to attack a maritime offshore platform. Do you see a link between attacks in neighbouring Chad by rebels, funded by sudan,originating from Darfur, and the MEND attack ? And thus a link to China whose interest it seems to destabilize the region to renegociate oil and pipeline contracts in the whole region ?
How would this affect the equilibrium between USA, Europe and China for the control of African oil ?
I'm not aware of any evidence of nation-state or corporate involvement with MEND, though in theory it might be rational for them to do so. I think that, in general, groups like MEND are perfectly capable of advancing and innovating in this way on their own. That said, already existing and disgruntled groups are classic "levers" for governments or other interested parties to push.
This is a day after post.
MEND has had oil barges blown up by Nigeria's Navy.
The amt's smuggled out may rival The Shia's in Iraq.
Someone's buying.
There are many many ways to attack an inmovile target, and it will always be cheaper to attack than to defend.
So I agree with the author: MEND has the upper hand, as they can decide when and where they are going to attack.
As for the ships (Rigid Inflatable), they are cheap, and can carry a ton (literally, and even more) of equipment.. and as long as you have an auxiliary engine and additional you can make 300Km..
Hello Jeffvail,
Thxs for this keypost. What are the chances the Nigerians would like to get a greater price for their oil, so they covertly pay/encourage MEND or some other group to damage the Angolan infrastructure? Something like this, escalating further, could turn the whole region into a hell of a mess.
Extrapolated on a larger scale, imagine Iran aiding MEND by providing a few, cheap, long distance torpedos, or a few Sunburn missles. The resultant loss of massive sweet & light crude would rapidly up the bidding for their stockpile of heavy & sour 15 VLCCs.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hi Bob-
I think this would be entirely possible if Nigeria was led by a group of far-sighted nationalists. They could use "militant violence" as a cover for restraining domestic production to maximize revenues in the short term and extend the life of their reserves. That said, I don't think it's actually what is happening (but, see John Robb's Shadow OPEC article for an exploration of the potential of this in the future). I think it's more likely that Nigeria's leaders are more interested in skimming off the top to buy their flat in London and fund their Swiss bank account. The new Nigerian president, Yar'Adua, seems moderately less corrupt (hard to tell, he may just have a good PR guy), but the real problem in Nigeria seems to be that the rot of graft and corruption has spread very, very far down the pyramid, and can't simply be erased by replacing the top few leaders...
Revealed: Why Bonga Oil Field Was Easy Target
Inside job, maybe?
Very interesting article... We've seen the difficulty of separating military members from militant sympathizers very clearly in Iraq, and I think the same thing will be true in Nigeria. It's questionable whether radar would have helped much, especially if MEND used small RIBs that have a very low profile and low radar reflectivity. Two things in the article struck me:
"Brisibe said the Minister of Defence would soon present a report on the incident where he would outline how the attack was carried out and the security measures to be put in place in order to avoid a re-occurrence."
Publishing security measures just clarifies to MEND the steps that must be overcome. Even if the report is limited to members of parliament, what are the chances of containing leaks?
The article also mentioned "oil companies operating in the area are however advocating host communities involvement in exploration activities through greater ownership of the oil assets as a way of preventing future attack on oil facilities." This comes back to Shell's primary duty to its shareholders to maximize profit being mutually exclusive with giving Delta residents a large enough share of the profit to placate them...
The more I read about this and related conflicts, the more prescient John Rabb appears. Time to reread his book, I think.
Jeff, thank you for your insights. Your previous experience may not be agreeable to all members, but it is proving vital to our understanding of the current situation.
I couldn't agree more. In fact, when I first read the posting, I assumed it had been written by John Rabb, until I checked it out.
And let us cut the good-guys bad-guys moralizing crap. We read TOD to benefit from the specialized knowledge of people who know what they are talking about, not to preach to them. Jeffvail is certainly a man with specialized knowledge.
A few bits of info and some thoughts on protecting offshore oil facilities. Last year I drilled several wells offshore Equatorial Guinea. One well was right on their territorial boundary line with Nigeria.
Points:
Given that GPS can be found in many cereal boxes these days navigation might not have been an issue. Also, from my drilling rig I could easily see the Nigerian flares over the horizon. Given how many flares are spread across the area it would seem that navigating by relative bearing could work. Additionally, all facilites have support vessels constantly making runs from the bank to the facility. Everyone on the docks know which boats supports which facility. With a fast enough boat (the larger supply vessels cruise around 12 to 15 knots) you could tale a vessel from the dock. But in all, this is a fairly minor point.
Protecting an offshore drilling rig/platform: Not even plausible. Much of the daily work effort is to keep the systems stable and not blowing yourself up accidentally. Some of the most critical equipment is right at the water line and very vulnerable.
Can a reasonable defense perimeter be established: very easy and relatively cheap. As our resident military expert can attest first hand, it's not easy sneaking up on anyone on the water (unless maybe you're in a sub). While the facility may not have radar all the support vessels do and the general protocol is to have at least one support vessel standing by for emergencies. Detectability of small craft by such systems I'll leave to the expert but in offshore S Louisiana I've seen the same systems readily image a 55 gal drum sitting on top of a piling (the common inland navigating system we use, believe it or not).
But all this filler leads me to what, IMHO, is the critical question: if protecting the facilities is as easy and relatively cheap as I've implied then why hasn't it been done? The Nigerian gov't, with it's current cash flow, could easily afford the best private protection on the market today. They are not all in Iraq at the moment. And I know for a fact that the Dutch have never been shy in the past about hiring "consultants" to provide security. Given a loss of gross income exceeding $30 million/day one would think additional moneys for enhanced security would be an easy check to write.
I do not see conspiricies behind every grassy knoll, but the current picture does not make sense. And this recent event didn't come out of the blue: about 1 - 2 months ago someone attacked an EG gunboat in the same general area and killed one sailor. Again, our resident expert may comment on probing exercises. Don't know if the two events are related but I doubt it came from the EG side of the line. The current dictator of EG has an absolute death grip on his locals.
Good points, though I don't personally think this is a case of conspiracy, I don't think we can rule out the influence of sympathetic insiders. The one point where I definitely disagree is that I don't think it is either easy or cheap to establish an effective defense perimeter. Static defensive perimeters tend to merely establish a new fixed position vulnerable to attack. It can be done, via active patrolling, rapid reaction forces, etc., but this is by no means invulnerable--it all comes back to which side can innovate tactics suited to the specific environment more quickly. Right now MEND has the upper hand there, and I think will continue to due MEND's decentralized nature, bureaucracy and corruption among the Nigerian government and military, and underestimating the threat on the part of the oil companies. In many ways it's analagous to the arms/armor cycle--you can put all the money and effort into improving armor, it will always be easier and cheaper to design a more effective armor piercing round than to counter it. With a significantly stepped-up security environment, the navy and oil companies may be able to interdict 90% or even 99% of attacks. That will still result in catastrophic failure if one attack succeeds.
Jeff, nice article. Follow the link in the article posted by Leanan, and you'll find 1 comment. Obviously, we don't know if this person is telling the truth or not, but it is certainly telling if true (especially regarding radar on other platforms and communication).
"06.24.2008 13:09
The ministry of defence and the military is shying away from the blunder they committed in their inability to secure the country\'s territorial waters. Bonga radar was not working but there are two nearby rigs with radar systems that saw the militants and communicated same to the authorities but the Navy could not do anything because they were not on ground. How about that? I recommend that somebody has to take responsibility for the action of the militants ."
So, you are admitting to being a war criminal, or at least to having assisted war criminals?
Cmason, all that's missing from your comment is the argumentum ad Hitlerum. Give us a break.
Well, the war in Iraq is a war of aggression:
http://en.wikipedia.org/wiki/War_of_aggression
As stated at Nuremburg:
"essentially an evil thing...to initiate a war of aggression...is not only an international crime; it is the supreme international crime, differing only from other war crimes in that it contains within itself the accumulated evil of the whole."
By definition, under international law, the war is a crime. And any people who planned or initiated it are, by definition, war criminals.
You might not like this, but that's what it is.
Hopefully somewhere down the line there will be an accounting, either with a future US administration or some international body.
Cmason,
Let’s look at it counterfactually. Let’s assume Bush, acting on an instruction from God, had decided not to invade Iraq. Sadam, some month’s after this non-event, invades Saudi Arabia. Chaos, mass starvation in the Middle East, Israel lobs a nuke at Teheran just on be on the safe side, Muslims in Europe detonate the Vatican and we can say goodbye to the Sistine Chapel, fascists win mass support throughout continental Europe, Jews get blamed for ‘duping’ Bush into inaction so as to further Israel’s sinister ends etc. etc.
And just imagine the reaction of the chattering classes and second-guessers. Criminal negligence on the part of the US. Bush worse than Chamberlain, and so forth.
I’m not defending the Iraq invasion. Just saying that ‘tragic realists’ (like myself, anyhow) tend not to shoot from the hip when it comes to calling other people criminals.
Anyone can make up any crazy "what if" scenario. But that's no justification for invading a country. Just like you can't kill someone because you think they might do something bad in the future, maybe. It's a simple moral principle. If you are attacked you can defined yourself, both individually, or as a nation. You can't act pre-emptively because of some theory or guess. That's even if you honestly believe in your theory, but especially when you're completely and knowingly making it up (i.e. WMD, connection to 911.)
"Preventive war was an invention of Hitler, Frankly, I would not listen to anyone who seriously talked about such a thing." - Eisenhower
You forget to mention Saddams' immediate use of his large arsenal of weapons of mass destruction...
"....Let’s look at it counterfactually. Let’s assume Bush, acting on an instruction from God, had decided not to invade Iraq. Sadam, some month’s after this non-event, invades Saudi Arabia..." - Cmason
Talk about a lame strawman argument. In 2003 Saddam would not have been able to invade a little country like Armenia, let alone a powerful Middle Eastern Nation like Saudi Arabia with all there high tech American weapons. America had already systematically destroyed Iraqs ability to wage war through a continual aerial assault and economic sanctions.
Use your imagination and come up with something better, instead of insulting our intelligence with hyperbolic incendiarisms. The 2003 war initiated WW3, it did not prevent it.
The reply above is for Carolus Obscurus. Cmason, I'm with you on this one. It seems critical thinking and war making need not be congenial to most.
You might have some justification in charging Bush,Cheney et al as war criminals but how many others(probably thousands)were involved in the planning?All of them were involved as part of their jobs.Get real.
Remember the other important determination at Nuremberg? "I was just following orders" is *not* an excuse. And people can quit their jobs. Some people in the US did resign or refuse orders and they are heroes, but there were far too few of them.
Now thats what I call true freedom; the freedom to refuse to kill another human being. Now thats a choice they can never take away from you, even if it costs you your own life. Better to please The Most High God than to please men in the long run.
Anybody who thinks that the situation in Nigeria or any other West African oil producing nation is 'simple' or that the corrupt officials, bad policies and IOCs are not partly to blame, should read Nicholas Shaxson's book Poisend Wells - The Dirty Politics of African Oil.
He clearly outlines, how money flows into the economy that directly supports corrupt politicians, goes into the hands of few, while bad politics and reliance on oil money completely destroys almost all other sectors in the country. Including agriculture.
All this makes 90% of the people in the country ever more poorer. Even poorer than the citizens of countries with absolutely no oil revenues. This is known as the resources course (aka Dutch disease).
The money flowing into the country creates inflation, after which it is being legally laundered by the financial loopholes like Jersey and Cayman, but also London and New York. Banks don't care if it's stolen or corrupt money. They are happy to keep it. And there are legal loopholes (again) to allow for this.
So what's the way out?
Economists have written volumes about this. Stiglitz appears to be of the opinion that countries need a strong government void of corruption, oil deals need to be transparent and western countries need to stop laundering the corrupt oil money coming out of Africa. Shaxson has listed some of his ideas on this issue as well.
Until these issues start to improve, regardless of who is right and what is justified, it looks very unlikely that the Nigerian people will stop fighting their corrupt government or cease sabotaging the IOC operations inside their borders.
However, as US has shown through the creation of Africom and increased intelligence/military planning for Africa, this is unlikely to happen. Even if USA moved away, they'd be replaced by China, probably with similar practices. And the same probably applies to IOCs. They don't see it as their duty to police a country.
So, increasing poverty and more corruption - all of that is likely to be on the cards.
As such, I see the downside risk as much more likely than any positive new development which would ensure at least a steady level of poverty for Nigerians, instead of the currently worsening state of affairs.
So, we should probably expect more of attacks in Nigeria.
Yep once you realize that the entire oil exporting system is dependent on not allowing the exporting country to increase its standard of living then you pretty much have the problem figured out.
The US and to some extent England reinvested to oil wealth internally incorrectly but they did do it.
In the US for example cheap gasoline allowed us to massively leverage our oil wealth. Within 100 miles of every major city land prices have increased almost 1000 fold and housing prices in the small towns and country are on par with the major cities.
Prices went from a few hundred dollars a acre to in many cases over 100k.
This is close to a 10,000:1 leverage provided by cheap oil.
In oil exporting nations in my opinion the leverage is negative on the order of -10:1 Overall I feel like many oil exporting nations are ten times poorer than they where at the beginning of the 20th century esp if you go a bit further back and discount colonial agriculture and early exploitation. Given that a -100:1 leverage for resources is not impossible.
This is the gulf we have created with cheap oil. On one side 10,000:1 wealth multiplier on on the other a -100:1 wealth demultiplier or concentrator.
The US is rapidly concentrating wealth so we should see the western societies swing brutally from a 10,000:1 leverage level to say a -10:1 third world style resource exploitation economy similar to the old colonial economies.
So in a sense the US will be recolonized by the wealthy elite as both the nominal value of our oil based wealth evaporates and whats left gets concentrated.
As and example what could happen is say a small town or region of a city becomes basically bankrupt the remaining wealthy will effectively come in an buy the town and reduce it to whatever local agricultural support or other local industry can be profitable in the region. In the exporting nations if you will I'm guessing that the resources will effectively fall under control of warlords supported by the concentrated wealth that remains in the west. Even with the huge drop in nominal value the absolute difference between the two will still be huge.
Think of colonial African wealth vs the wealth of Britain during the 1800's.
However I have to think that we will be dealing with the ultra wealthy that now control most of the land, companies and global resources and banking system.
The ultra wealthy will see their nominal wealth drop from say 100 billion to 1 billion but they will control far more assets. Lets say right now the ultra wealthy control 40% of the worlds assets. As the nominal value of their wealth falls they will take control of 90% of the worlds assets as they effectively by back everything they have built.
This means of course that when the stock market finally collapses you will see the ultra wealthy buy up the companies at pennies on the dollar and gut them for what ever value remains then convert the assets to whatever cash flow is possible.
The next round of buyouts won't be leveraged but will be via cash. A lot of this cash will come from alliances between the wealthy oil states and western bankers.
Whats interesting is I still think we will need a lot of oil even as we crash our economies. The reason is that most of the leverage is paper wealth held in buildings and land. The 10,000:1 leverage is not real wealth but simply inflated prices for marginally productive suburban and rural land and structures. Its not actual productive companies. The real economy "food/clothing/shelter" is much smaller. Even here the leverage is in inflated stock values and P/E ratios.
So even as we see a collapse in the frivolous economy the core economy which is fairly energy intensive should remain strong for quit a while as wages spiral downwards and economies localize and needed resources are militarized.
So we literally have so much paper wealth that can be evaporated and destroyed that the shear size of the downturn and the time needed to convert back to a colonial society will ensure that commodities and critical economic needs will remain robust even as the middle class is destroyed.
If we go back to the form of government that existed before our current approach, it seems like war lords (or the equivalent) controlling an area and its population was a fairly popular form of government. With less fossil fuel, the reach of governments is likely to get smaller. You may be right about the rich buying up local areas, and acting as war lords.
We don't really have a plan for where we are going, so an outcome like this is not out of the question.
"Whats interesting is I still think we will need a lot of oil even as we crash our economies. The reason is ... "
Maybe we will still need oil, but most likely we will not have what we need. Think about a 'what if' in which you assume the oil is depleted or in decline in all the 'God forsaken' colonial places. Will we have the will to keep them subjugated?
Thats actually the part that scares me most. To revert back to a colonial attitude implies a move back to racism and genocide attitudes more in line with extreme nationalism and not our current culture. The attitudes and actions of the colonial powers was perfectly inline with the genocide nature of Nazi Germany. Albeit less technically efficient but at least at the time of the Nazi's these brutal attitudes where far more prevalent and accepted vs today.
This implies that the veneer of the tolerant civilization we think we have created is very thin. Given my thinking at least my observations indicates this is true.
The US's actions after Katrina is probably the most clear example that we are not the people we like to think we are.
SamuM,
Thank you for your highly informative comment and in particular the reference to Shaxson’s book.
One reservation: ‘corruption’ as an explanation for African misery is unconvincing – China is equally corrupt but that hasn’t prevented it from being an economic ‘success story’, at least in the way ‘success’ is defined by the purveyors of conventional wisdom.
African misery is largely due to its population explosion. Even if Nigeria’s politicians were as morally upright as a Calvinist preacherman, they would not be able to forestall their country’s encounter with the Four Horsemen. Corruption is not so much the cause of poverty as its effect, and morality doesn’t cut much ice with hungry people.
Poverty is generally the cause of the population explosion. If people are educated (especially women) and the living standard raised, even modestly, births go way down. Perhaps without all the western "investment" over the past 50-100 years, this might have been achievable.
I agree its about where the money is reinvested give the power of the wealthy corruption is not really a good concept in general all the super wealthy are corrupt beyond our imagination. Its just easier to see in the producing nations where the source of income and the places its invested differ. Corruption is really just a way to describe a divergence between where the uber rich make there money and where they reinvest it into infrastructure. The political instability catch 22 in most producer nations just makes this obvious and we like to call it corruption.
Read my long article when this happens in the US and the uber rich change their pattern of investment to preserve wealth it will look like corruption to many.
When your super rich it seems that whats most important is the flow of wealth this means being a captain of industry and controlling the creation of goods and services and resources its not the nominal dollar amounts involved. The corrupt African governments simply don't have industries to be captains of to create additional rivers of wealth from the oil income at least locally.
The Middle East has this same problem and West Texas's export land is simply a result of the decision by the "corrupt"/uber rich to go ahead and create local wealth streams. I guess now that the middle class in the western nations is now dead the uber wealthy are doing their own form of globalization in a sense as we hit this final stage of wealth concentration. Eventually of course once western assets are literally dirt cheap we can expect the wealth to flow back probably primarly into agriculture and local manufacture.
WT's ELP ( Economize, Localize, Produce ) is like atomic energy its agnostic to the political form that ELP takes. ELP will happen regardless since the uber rich must have a continuous injection of wealth. But ELP can take the form of slaves on a plantation or citizen farmers. ELP says nothing about the distribution and flow of wealth in a society that practices ELP.
In my opinion its important to create a flow of wealth to satisfy the uber wealthy without forcing them to resort to the plantation/slave model to meet their needs. Its like living with a vampire we can either cut a vein and give them their daily blood supply and live a reasonable life or they will suck us dry.
Either way the vampire will get his daily dose of blood.
Or we can drive a stake through the vampire's heart/chest.
memmel,There is a significant weakness in your theory.You seem to be assuming that some sort of civil order will survive an economic meltdown.This would enable the wealthy to keep what they have and even increase it.I believe that there will be an ararchic situation where the wealthy will be first and prime targets.They may employ private armies and lock themselves in gated compounds but it will avail them nothing in the end.
Corruption in case of African resource rich nations mean that 90% of the money flowing in gets deposited on the foreign bank accounts of the rulers.
It is never spent on infrastructure, education or health improvements in the homeland.
China is almost opposite. They have been massively investing in higher education, new infrastructure, construction, economic reform and yes, even anti-corruption practices, even if the last has not been working all that well.
But to put African poor nations like Angola and Nigeria on the same level of comparison with China is not only structurally incorrect, it's bordering on intellectual dishonesty :)
As for the population explosion. I do not deny the importance of that. However, the population of China has exploded as well and that didn't stop them from multiplying their GDP and rising out of poverty.
Further, dividing the oil income equally among Nigerians would have multiplied their income and raised them out of absolute poverty. Nothing even remotely akin to that ever happened. The money just went to the corrupt officials.
Corruption may be rife in China, but at least the government isn't stealing 90% of the export income and putting it on their personal bank accounts in Switzerland.
It is only the African nations that have fallen back in absolute and relative income (see UN, gapminder.org time series for proof of this).
Well said SamuM.
But can we really say that the population of China has exploded, and it hasn't stopped them from multiplying their GDP? I'd argue that part of China's success economic success has been due to their successful population growth control.
The main grip the people in the Delta have is that long before oil they were fishermen and supported their families by fishing. According to them when oil moved in the waters were polluted and killed off the fishing. This has left the aboriginals in the Delta to starvation and poverty. So the stealing of oil is a way of making money to provide for their families.
The increased violence in the Delta has pushed the people there to the North which has completely destroyed Lagos. Lagos is so bad the capital was moved. Unless you have been to Nigeria-and I have been-you can not imagine the squalor these people live in. It is very disheartening to leave the airport to see signs on their shanty towns “Crusader Go Home.” Because of our ham fisted means we are driving the population into the arms of the rebels. About half are Christian and half Muslim. Shell Oil goes in with gunships and shots up whole villages. This tends to tick the aboriginals off, so the circle of violence continues.
You must understand that Nigeria is one of the richest countries in Africa and the vast majority of its people are starving.
About the flaring issue, according to International Law flaring has all but stopped. Most of the gas is either re-injected or shipped ashore for processing.
Jeff has pointed out that oil production should increase from Nigeria absent the conflict. Perhaps the best thing to do to resolve the conflict would be for more people to join the boycott of Shell. That, together with institutional divestment, could refocus Shell's attention on respect for human rights and halt its efforts to push the government of Nigeria into such violations. Perhaps some extra language inserted into the windfall profits tax legislation that adds a surcharge for those companies that use unfair labor practices abroad would also help. Shifting the conflict from violent to non-violent would be a first step to resolving it completely.
Chris
I've read that in 2005 they completed 267 km offshore gas-gathering pipeline from the Bonga field to the NLNG plant in Bonny. So that looks like it might be one more vulnerability. In this instance of attack MEND was basically a message, "We can get to you now... and in the future." I skimmed MEND's press release a bit earlier. They basically said they could have made the attack worse but didn't want to kill the people on the platform before giving them the option to stop working there.
As the world gets nastier post peak and the spoils of oil higher I could see the Nigerians resorting to the other method of preventing attacks - slaughtering the entire population of those who carry them out.
Many of us remember the Biafra conflict, when genocide was the order of the day.
My betting is that the wider world will not even blink as supplies are short - no-one could give much of a damn about Zimbabwe today, and the folk there are not even stopping access to wanted oil.
The coast of western Nigeria was known as 'The Slave Coast' for several centuries in Europe. The people there have little cultural memory of ever having lived under a benevolent government. The delta is a swamp that must be infested with malaria. There are so many reasons why it is a mess that it is mind boggling that people here argue about whether it is this reason or that. Maybe it is all of the above.
Carolus Obscurus,
I'll respectively differ with you on the "over population" angle. I don't recall exact details but a year or two ago I saw a televized report on population. It was shocking to find out that population densities (people per sq. mile) in almost all African nations were less (and sometimes much less) than many states in the US or other industrialized nations.
I've seen first hand the horrible inequaty of "wealth sharing". Here's a repost on that very issue which I witnessed first hand:
Last year I was involved in drilling several wells off the coast of Equatorial Guinea. Don't feel bad if the country isn't at all familiar to you...it isn't to most. It's a very small island nation off the eastern coast of Nigeria. A population of only 500,000. A Spanish colony until the 80's. Oil wasn't discovered there until the late 90's. Currently ruled by a dictator who took control after killing his uncle, the first dictator after liberation.
I don't have the exact numbers at hand but I would guess current oil revenue exceeds $80 billion per year. With their small population they are technically one of the richest per capita in the world. Yet 99% of the population lives in extreme poverty. One of the great shortages is protein...odd you might think for an island nation. But the ruler destroyed the local fishing fleet after a failed invasion by mercenaries in 2002 (led by Margaret Thatcher's son). The ruler was concerned that another invasion might use the fleet to infiltrate.
But they have developed a taste for giant jungle snails (size of a baseball) so there's a little protien to share.
The field I drilled sits right off the island caital Malabo in clear sight of the population. In addition to watching tankers carry off their oil to Europe weekly they also watch the burning of 20 million cubic feet of natural gas per day. This is the associated NG produced with the oil. The operator offered to lay a pipeline and transport the gas to the mainland at its own expense but the dictator rejected the offer. He didn't want to spend the money for a local distribution system.
This is an example of just one little spot on the globe that few know of and even fewer appreciate their contribution to our endless thirst. How easy would it be for anyone to gain local support by offering the populace a chance to live even a third class existance. Who would condemn the EG people for seizing control of their wealth and utilizing their oil reserves to develop their own economy? Makes the fight against "taxation without representation" seem somewhat trivial compared to being starved to death.
But it's not likely to happen internally. The gov't has a gun control law that would please the heart of many a New Yorl liberal. If you are caught just talking about acquiring a gun (let alone having one) you are subject to immediate exercution w/o a trial. In fact, a couple of years ago, they amended the constitution to allow the president to personally execute anyone for any reason w/o a trial. You can't argue the rational: the president is in direct communication with God (former Spanish/Catholic colony remember) and as such if it's OK for God that he kills someone then it should be OK with the rest of us.
The money over there was really great but after three hitches and three trips to and from the airport I didn't have the stomach to see anymore.
Thanks, Rockman.
You are one of the commenters at TOD I always read because I know that I will know more after reading what you have to say than I did before.
More than can be said for the day-tripper pundits of the MSM.
Eventually a new Amílcar Cabral will arise, and things will change one more time (I know that was Guinea Bissau, but it will happen).
Shell resumes production at Bonga
Shell announced that production resumed today, and that the facility was not significantly damaged. We'll have to see how long the MEND "truce" lasts--MEND's next attack will likely attempt to inflict serious damage, since it is doubtful that a 5-day shut-in will have create the kind of pressure on the Nigerian government that MEND needs to exert. It will be interesting to see if MEND innovates immediately with their next attack, or if they try the same tactic again, in which case it will be interesting to see if Shell can improve defenses enough to thwart it. My guess is that, because the recent attack only shut in production for five days, MEND will try to up the ante with a more damaging attack.
We know that MEND has capability with static-charge explosives and with RPGs--some form of swarming attack that fires multiple RPGs into the platform seems most likely. Even one RPG hitting the right part of the facility could produce catastrophic results.
Today's Financial Times has a 24-page special section on Nigeria.
Their article on the Delta adds nothing on the tactical situation and concludes that the government doesn't seem to have a political strategy in place.
Also, MEND wants George Clooney to mediate! (No word from himself.)
Offshore oil systems as so complex it wouldn't take a whole lot of effort to wreck havoc on them. And the effort would be very inexpensive, while countermeasures would be very expensive and essentially useless. At a cost of about one million dollars, one squad of trained men with the proper equipment could easily take out Nigeria's ability to export any offshore oil for years; increase their budget to include some more sophisticated equipment, and the damage would be even more extensive and long lasting.
I expect the truce will be shortlived, as a decided advantage is with MEND in the short term. By the end of July, I expect we'll be discussing the latest offshore MEND attack.
http://www.foreignaffairs.org/20070501faessay86308-p0/benn-steil/the-end...
I agree with the need to move away from national currencies, but to local currencies, not a global universal. The globalized movement of goods in the volumes we've seen for the last 20 years is about to end. Goods will still move and international commerce will take place, but the scale will be much less as economies trasition to geograpic based regions and locales. This is a product of the coming paradigm shift, or Great Turning as some are calling it.
You're welcome CO...we all have little pieces of the puzzel in our background. Collective we may build a fairly reliable, if complex, picture.
DaveMart,
I think you may have framed a very ugly picture of what lies ahead for the oil rich areas of west Africa. It doesn't even have to take the form of overt genocide. Back to Equatorial Guinea as an example. The first dictator did have some sense of humanity. He began a malaria eradication program that was a overwhelming success. Being an island nation, for the most part, an aggressive spraying program effectively elimanated malaria on Bioko Island. After his nephew killed him and took control he dismantled the program and now the disease is back big time.
There is a very small and select portion of the populace that are involved in oil extraction but the great majority of the work is done by expats like myself most of whom rotate on a 28 day schedule. It's easy to see this pattern of elimanting the "unnecessary folks" as growing thanks to the wealth oil extraction provides. Given the ramifications of PO and the relative weakness of the local dictators it's easy to imagine external military powers coming into play sooner than later. With that thought in mind, I wonder what the response to the Nigerian attack would have been if the platform had been operated by a Chinese company and not the Dutch.
I don't think they will have a problem with overt genocide.
Western interests and backing will doubtless be lightly disguised, or Chinese, but good old fashioned machetes should do the job pretty effectively without too much high tech.
Even supposing the west wanted to do something about it, hitting the buffers on resources is likely to mean dozens of genocidal conflicts across the world - and ethnic and religious conflict within western nations should not be ruled out.
To all:
And speaking of restless natives just saw this report on an oil patch web site....haven't seen it elsewhere yet:
Saudi Arabia has arrested 701 Islamists in recent months who it claims were preparing attacks on oil industry installations, the interior ministry said on Wednesday.
Security forces "carried out several operations against followers of the deviant ideology and arrested a total of 701 people of various nationalities," said a ministry spokesman quoted by the official Spa news agency.
Of those arrested, "520 are still being held for their implication in the organisational and ideological plans of the deviant ideology."
Deviant ideology is the term used by Saudi officials to describe Al-Qaeda.