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A Glimmer of Hope In The Niger Delta

October 28, 2009 – Comments (2) | RELATED TICKERS: RDS-B , XOM , CVX

For nearly six years militants and thugs have wreaked havoc in the southern states of Nigeria that comprise the Niger Delta. However, a new government plan with some successful implementation just may be the light at the end of a long, bloody tunnel. 

Once sub-Saharan Africa's largest oil producer at 3.6 million barrels a day, Nigeria has since slipped to the number two spot after Angola. They now produce only 2.2 million per day. This, in large part, is due to the violence and chaos that has plagued the region since natives began sabotaging oil production and kidnaping foreign oil workers. Rebels were acting on behalf of local communities whose land had been destroyed or contaminated by the oil companies, and whom were among the most poverty-stricken people in the country -- yet received little or no compensation for living amongst so much oil. Companies such as Royal Dutch Shell (NYSE:RDS-B), ExxonMobil (NYSE:XOM), and Chevron (NYSE:CVX) have all been blamed for activities ranging from paying off community members to providing helicopters to the Nigerian government. To put it nicely, the rebels aren't exactly on good terms with these mulitnationals.

Recently, however, the government introduced a program that would allow rebels to obtain amnesty for past crimes, a daily food allowance, and the promise of education and retraining. Shockingly, an estimated 15,000 soldiers have signed up or have met the deadline, which expired October 4th. No one is quite sure how many militants are still left in the Delta, but this is an excellent sign that the insurgency may be coming to a close. Although there has always been controversy regarding the causal relationship between poverty and crime, it seems in this case, if you can just provide people with basic essentials, the possibility of an improved future, and rudimentary education, then they are willing to drop their guns and grenades at the first glimmer of hope. Let's hope for everyone's sake that this is the end of the struggle in the Niger Delta.

Any Fools have an opinion? Would you invest in a company that had substantial exposure to this plentiful but dangerous region?

-Jordan (TMFPhillyDot)