Nigerian Oil: Delta Ceasefire, Political Bottlenecks

In the latter part of 2009, Nigeria's government mounted its most intense peace initiative in the turbulent and oil-rich Niger Delta region since President Umaru Yar'Adua took office in 2007. The effort appears to have paid some dividends, but peace in the region remains tenuous and several factors continue to undermine Yar’Adua’s mandate. Meanwhile, political divisions seem likely to continue to complicate both Nigeria’s oil revenue-sharing proposal and plans to reform the national oil company. Corruption remains a major obstacle to reform, as does Nigeria’s federal government structure, the root cause of much of the debate over how to distribute power and revenue between the federal and state governments. The costs of further Nigerian political turmoil—or the benefits of an improved situation in the Delta—would certainly be felt outside the country’s borders.

In the following analysis, RGE’s Lee Hudson Teslik examines what the Delta peace initiative and Nigeria’s push for oil industry regulatory reform will mean for Nigerian output and for international oil companies operating in the country.

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