Oil Production Threatened In Bayelsa Over Dispute On Security Vessel Contract

Nigeria’s already fragile oil production faces a new crisis as host communities in Bayelsa State have threatened to halt operations at key oil fields within 14 days, citing a dispute over security vessel contracts.

The communities, under the KEFFES umbrella, were demanding that NNPC Exploration & Production Limited (NEPL) reverse its decision to terminate its deal with a local security contractor and reduce the number of community security vessels protecting oil operations in OMLs 86 and 88.

At the heart of the dispute is a long-standing arrangement between the host communities and oil operators. Initially implemented by Chevron Nigeria Limited in 2007, the security vessel contracts were part of an effort to curb attacks and ensure stability in the oil-producing region.

However, after Chevron divested from the fields in 2021, the new operator—NNPC’s subsidiary, Pennington Production Limited—agreed to uphold existing contracts, including those for security services.

Despite this agreement, the communities claimed that NEPL recently removed Multiplan Nigeria Limited, a security firm nominated by the host communities, and awarded one of the two remaining security vessel contracts to a company that lacks local ties. This, they argued, is a breach of trust and an economic blow to the region, which has long struggled with marginalisation despite hosting some of Nigeria’s most productive oil fields.

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“Our security and livelihoods are directly tied to these contracts,” the communities stated in a letter dated March 28, 2025. “This unilateral decision to exclude us not only violates our agreement but threatens the fragile peace we have maintained over the years.”

If NEPL fails to meet their demands—which include reinstating all three security vessels, clearing outstanding outstanding payments from 2024, and engaging in urgent dialogue—the communities vowed to shut down production at the oil fields.

This development could further destabilise Nigeria’s oil sector, which is already struggling with declining output. The country’s crude oil production fell to an average of 1.4 million barrels per day (bpd) in February 2025, down from 1.737 million bpd in January. A shutdown at OMLs 86 and 88 would not only disrupt output but could also spook investors wary of ongoing operational risks in the Niger Delta.

Industry analysts warned that this crisis underscored a broader issue: the failure to integrate host communities into decision-making processes despite the provisions of the Petroleum Industry Act (PIA).

“The government and oil companies cannot afford to ignore these communities,” said an Abuja-based energy expert. “A stable operating environment is crucial for Nigeria to meet its OPEC+ production targets and attract much-needed investment.”

With the ultimatum now counting down, all eyes were on NEPL to see whether it will engage with the host communities or risk yet another production setback in Nigeria’s oil heartland.