Nigeria’s already fragile oil production is on the brink of a new crisis as host communities in Bayelsa State have issued a 14-day ultimatum to halt operations at key oil fields over a dispute concerning security vessel contracts.
Under the KEFFES umbrella, the communities are demanding that NNPC Exploration & Production Limited (NEPL) reinstate a previously terminated local security contract and maintain the existing three security vessels safeguarding oil operations in OMLs 86 and 88.
Dispute Over Security Arrangements
The disagreement stems from a long-standing security arrangement initiated by Chevron Nigeria Limited in 2007 to curb attacks and maintain stability in the oil-rich region.
Following Chevron’s divestment from the fields in 2021, its successor, NNPC’s subsidiary, Pennington Production Limited, initially agreed to uphold these contracts. However, the communities now claim that NEPL recently removed Multiplan Nigeria Limited, a security firm nominated by them, and awarded one of the two remaining contracts to a company without local ties.
Describing this move as a breach of trust and an economic blow to their region, the host communities stated in a letter dated March 28, 2025:
“Our security and livelihoods are directly tied to these contracts. This unilateral decision to exclude us not only violates our agreement but threatens the fragile peace we have maintained over the years.”
Threat to Nigeria’s Oil Output
If NEPL fails to meet their demands, which include:
- Reinstating all three security vessels,
- Settling outstanding payments from 2024, and
- Engaging in urgent dialogue,
the communities have vowed to shut down production at the oil fields.
Nigeria’s crude oil production has already declined, dropping from 1.737 million barrels per day (bpd) in January 2025 to 1.4 million bpd in February. A disruption at OMLs 86 and 88 could further destabilize the oil sector and deter investors wary of ongoing security challenges in the Niger Delta.
Call for Government and Industry Action
Industry analysts have warned that this crisis highlights the continued failure to integrate host communities into decision-making, despite the provisions of the Petroleum Industry Act (PIA).
“The government and oil companies cannot afford to ignore these communities. A stable operating environment is crucial for Nigeria to meet its OPEC+ production targets and attract much-needed investment,” an Abuja-based energy expert cautioned.
With the ultimatum fast approaching, attention is now on NEPL to see whether it will engage with the host communities or risk another major production setback in Nigeria’s oil heartland.