Clashes between political gangs rather than attacks on oil facilities are the greatest threat to Nigeria's Niger Delta ahead of April elections and the long-term security of its oil output depends on much more than who wins.

President Goodluck Jonathan is the first Nigerian head of state from the restive heartland of Africa's biggest oil and gas industry and there are fears that should he lose the April vote, there would be a backlash in the Niger Delta.

As the incumbent, Jonathan is seen as the front-runner but he faces a tough challenge at the ruling party primaries on Thursday from former Vice President Atiku Abubakar, who is from the predominantly Muslim north.

Past campaigns of violence by militants who say they are fighting for a fairer share of the natural wealth have cut the OPEC member's output by as much as a quarter, moving global oil prices and the shares of some of the world's top energy firms.

But political equations in Africa's most populous nation and its biggest oil exporter are never straightforward.

Jonathan may have brokered a 2009 amnesty but his heritage alone will not be enough to guarantee stability even if he wins the vote. Equally, he has supporters and detractors at home, and his defeat will not necessarily trigger strikes on oil sites.

Whoever is in charge, the issues remain the same, said Antony Goldman, head of London-based PM Consulting.

The amnesty is complicated and coming from the area is no guarantee of anything. The key for the Niger Delta is the local area elections, and it will be one of the flashpoints.

Political thuggery has long been a hallmark of the election season in the Niger Delta. Many of the armed gangs that went on to blow up oil pipelines and kidnap oil workers were originally set up by politicians to help rig elections.

There has already been violence this time around.

Gunmen killed several supporters of opposition governorship candidate Timi Alaibe in Jonathan's home state of Bayelsa on Friday during a gathering at his home.

Alaibe was Jonathan's top adviser on the Niger Delta before he quit to contest the elections, responsible for implementing the amnesty and well-connected with former militant leaders.

A re-run governorship election in neighbouring Delta state passed off peacefully last Thursday, but there were isolated acts of sabotage and opposition supporters have complained of rigging, raising the prospect of protests there.


Key to the outlook for the stability of Nigeria's oil production is the future of the fragile amnesty which Jonathan and Alaibe were key in brokering two years ago.

But Abubakar, should he emerge as the winner, is unlikely to do anything other than continue the programme.

The Niger Delta is multi-ethnic and multi-cultural and his (Jonathan's) ethnic group is just one of several ... I don't see a risk of instability, certainly not, Abubakar told Reuters last month when asked about the risk of unrest.

Jonathan's ascent to Nigeria's highest office after the death of his predecessor, Umaru Yar'Adua, last year may have been cheered by many fellow Ijaws, the largest ethnic group in the Niger Delta. But it was no guarantee of security.

Car bombs, claimed by Niger Delta militants, rocked Abuja on October 1 near an independence day parade. Another bomb went off in Abuja on New Year's Eve, though no group has claimed it.

The fact Jonathan (is) president gives a sense of ownership for the Niger Delta and therefore it is perceived it will be in their interest to see him win, said Dapo Oyewole, director of the Centre for African Policy and Peace Strategy.

But there is no clear link between Jonathan and the militants beyond the ethnic background. I'm not sure how much the ethnic link means for the Niger Delta. We still had bombings on October 1 and Jonathan was in charge, he said.


Of arguably greater importance to the future of Nigeria's oil industry is the overwhelming need for reform, and here, the election outcome could play a role.

Nigeria's oil production capacity is estimated at 3 million barrels per day but has struggled to edge much above two thirds of that. Attacks by militants have played a part but a lack of investment and the mismanagement of the state oil company NNPC have been equally, if not more, significant.

The case for reform is overwhelming. You won't find anyone who wants to leave things the way they are but the elections have held things up, said PM Consulting's Goldman.

The Petroleum Industry Bill (PIB), a massive piece of legislation meant to solve everything from funding problems to corruption, is before parliament.

It could radically alter the terms on which majors such as Royal Dutch Shell, Exxon Mobil and Chevron operate in Nigeria and billions of dollars of investment are on hold while its fate remains uncertain.

There is no political advantage for pushing the PIB through before the elections because the risks would outweigh the rewards. The risks are short-term and the rewards are long-term, Goldman said.

A new administration could modify and further delay it.

Nigeria also promised a new oil licensing round last year but energy firms raised concerns over the terms likely to be offered given the constant changes to the PIB.

Nigeria's Business Day newspaper said this week the bid round would not take place before the elections because Jonathan's administration had concluded it would look like he was desperate to settle his political cronies with oilfields.