Bonga FPSO vessel

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.

The Oil Drum has a post on the significance of MEND’s recent successful attack on the Bonga offshore oil platform. I’d been wondering a bit about the implications. This article spells them out.
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.

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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.

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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).

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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.

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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.

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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…
There are a number of comments following the article that are noteworthy:
… 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.
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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…

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Not to mention if you take option B, the US will call you a tyrant and accuse you of supporting terrorism. :)

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… (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…

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… 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.
In my own pipedream best case scenario, the FG would employ youth to clean and build the cities, like the massive public works projects mentioned above. That does actually work, at least it did in the US. But I don’t see much of a will for it anywhere. Even in the US the Republicans have spent half a century persuading the voters that investment in the country and its people did not work and will not work, despite the evidence. And a lot of people have bought it.
One of the major problems, however, is: We’re building cities without urban qualities. Poor cities, in particular, are consuming the natural areas and watersheds which are essential to their functioning as environmental systems, to their ecological sustainability, and they’re consuming them either because of destructive private speculation or simply because poverty pours over into every space. All around the world, the crucial watersheds and green spaces that cities need to function ecologically and be truly urban are being urbanized by poverty and by speculative private development. Poor cities, as a result, are becoming increasingly vulnerable to disaster, pandemic, and catastrophic resource shortages, particularly of water.
Conversely, the most important step toward coping with global environmental change is to reinvest — massively — in the social and physical infrastructures of our cities, and thereby reemploy tens of millions of poor youth.