Significant oil reserves have been discovered in the Lake Chad Basin, a vast, semi-arid and desert area at the heart of the Sahel, surrounding Lake Chad. It is estimated that oil fields in the regions around the Lake, including northern Cameroon, north-eastern Nigeria, southern Niger and western Chad, may contain up to 2.32 billion barrels of oil and 14.65 trillion cubic feet of natural gas. However, a raft of challenges face companies and governments seeking to commercially explore and produce in the Basin.

The instability caused by Nigerian militant group Boko Haram’s ongoing insurgency has the potential to threaten oil operations already underway in Chad, Niger and Cameroon and is preventing Nigeria from beginning oil exploration at all. Despite the Chadian military being one of the largest and well-equipped armies in the region, defence forces in neighbouring countries are not as strong and have so far proved unable to quash the militants. Since August 2014, for the first time in the group’s history, Boko Haram has begun seizing and retaining territory and there are fears that the wider Lake Chad region — plagued by lawlessness, porous borders and ambitious local Islamists — may be under threat as the group strives to expand its base beyond their current stronghold south-west of the Lake.


The Boko Haram Insurgency

Created in 2002 in Borno State, north-eastern Nigeria, bordering Lake Chad, Boko Haram is seeking the establishment of an Islamic state in Nigeria and across neighbouring parts of West Africa. Indiscriminate in their targeting of all opponents, including Christian or ‘western’ institutions and individuals and Muslims opposed to the insurgency, Boko Haram has recently dramatically changed its modus operandi, with the group now focused on direct, sustained battles and the capture of towns and exposed rural areas in north-eastern Nigeria and northern Cameroon. Recent advances have given the militants two clusters of territory which form a strategic crescent around the Borno State capital Maiduguri, a swathe of land along the south-western shore of Lake Chad, a number of towns in Yobe and Adamawa in Nigeria and along the unmanned Cameroonian border, and Fokotol and surrounding areas in northern Cameroon.

While the group has not captured any territory in Chad to date, it is believed the Chadian side of the Lake is being used as a safe haven of sorts for Boko Haram, with a number of the group’s key commanders living in and operating from Chad, and a cluster of strategic camps located across the Chadian border. Some of the 234 schoolgirls kidnapped from Chibok in Nigeria in April are understood to be being held in Chad and there are believed to be a number of critical arms trafficking routes into and out of Chad, facilitating the provision of weapons for the group. Boko Haram is also believed to contain a large number of Chadian fighters, with kidnappings and recruitment drives ongoing in the vulnerable Lac and Hadjer-Lamis States. Historically, local residents surrounding Lake Chad share ethnic and religious links with neighbouring communities, irrespective of national boundaries, with many being from the same Kanuri ethnic group from which Boko Haram draws many of its fighters. The lake has shrunk by over 90 per cent in the past 50 years, leaving many communities, for whom the lake is their lifeline, poverty stricken as national governments fail to address deep socio-economic imbalances. It is this sort of environment in which Boko Haram, adept at exploiting state weakness, disenfranchised populations, security gaps and religiously charged political divisions, can thrive.

Economic Motivations

Despite these socio-economic issues rendering the population vulnerable to infiltration by insurgents, Chadian President Idriss Deby is known to have fostered a comparatively strong and cordial relationship with Boko Haram, which has led to him being at the centre of recently reported negotiations between the group and the Nigerian Government. Chad is also understood to be benefitting from the delayed commercial exploration of oil on the Nigerian side of Lake Chad, as it taps oil from shared underground reserves irrespective of geographical sovereignty. It is reported that a number of prominent Nigerian and Chadian politicians have personal business interests the Chadian oil industry and consequently have a vested interest in ensuring the Boko Haram militancy continues to destabilise north-eastern Nigeria and prevent Nigerian commercial oil production. There is the possibility therefore, that Boko Haram may be benefitting from high-level financial sponsorship from political figures either side of the border, with these resources originating in Chadian oil. Indeed, the Chadian Government has been criticised for its inaction against Boko Haram, only joining anti-insurgency operations in July 2014 after a suspected intervention by French President François Hollande.


Outlook for the Lake Chad Oilfields

The Lake Chad oilfields, located in Lac State, western Chad, are central to the Chadian Government’s ambitions to increase oil production to 300,000 barrels per day by 2016. Due to the scale of potential revenues and the importance of these revenues for the Chadian Government and investors, it is likely these oilfields will be rigorously protected from potential insecurity. A sustained Boko Haram attack on the Chadian capital, N’Djamena, is also unlikely, particularly thanks to a heightened Chadian military presence and the recent arrival of a 3000 strong French anti-Islamist force headquartered in the city. However, rural areas to the north surrounding the oilfields will remain vulnerable for as long as the insurgents remain active. Although this is unlikely to directly impact oil production, it will contribute to an increasingly insecure operational environment for companies working in the region. With Lake Chad’s oil reserves being spread over four countries — arguably only one of which possesses the military capability to defend against the insurgents — and an extension of the Cameroon-Chad pipeline proposed to Niger, regional security concerns are of paramount importance to international businesses wishing to operate in the Lake Chad Basin.

In October 2014 Chad, Niger, Cameroon and Nigeria, along with Benin, agreed to create a multinational joint task force to combat the insurgency. However, with Boko Haram issuing threats to any countries supporting the Nigerian Government, and no logistical details agreed upon so far, there are reservations about the potential success of this latest agreement. While key strategic and commercial locations in Chad are likely to remain safe in the short-term, due to a heavy military presence and Deby’s dialogue with Boko Haram, international pressure to defeat the group is likely to increase as security concerns grow ahead of Nigeria’s general election in February 2015. The Chadian Government may be forced into more overt displays of aggression against Boko Haram, threatening the current status quo and the use of Chadian territory as a safe haven for the militants, and increasing the likelihood of reprisal attacks within Chad. Should the militants continue to make territorial advances within north-eastern Nigeria it is also possible that vulnerable, rural areas of Chad may prove an attractive target for the expanding Boko Haram caliphate.

http://blog.edinburghint.com/chadian-oil-and-instability-in-the-lake-chad-basin/

Fig. 1: Boko Haram activity in north-eastern Nigeria, August – October 2014
Fig. 2: Chad – Oilfield and militant group locations