* First head of state from Niger Delta favourite in polls
By Joe Brock
PORT HARCOURT, Nigeria, April 6 (Reuters) - Sat at the bar in a dingy former hotel on the edge of Nigeria's oil hub Port Harcourt, Silas Pyale lifts a muscular arm and points to a deep gash in his head.
"A bullet did that," says the 31-year old, staring into the middle distance. "We all hope those days are over but if there are no jobs, no money, it will be back to the old ways ... But even worse than before."
Pyale is one of thousands of militants to have emerged from the creeks of the Niger Delta, home to Arica's biggest oil and gas industry, under an amnesty deal brokered 18 months ago by then Vice President Goodluck Jonathan.
It was a bold strategy to try to end years of attacks which, at their height in 2006, cut more than a quarter of the OPEC member's crude oil output, cost it as much as $1 billion a month in lost revenues, and triggered spikes in world oil prices.
So far it has paid off. There have been virtually no significant attacks on oil facilities, allowing energy firms to ramp up production and Nigeria to boost government coffers.
But if Jonathan, who inherited the presidency last year after his predecessor died, wins elections as expected in 10 days time he will need to ensure the retraining programmes set up under the amnesty translate into jobs for the likes of Pyale.
"An idle man thinks of evil deeds," said the ex-fighter, who used to command dozens of men in gun battles with the army but is now midway through a 12-month course in oil well drilling.
"They shouldn't train us and drop us," he said.
JOBS FOR THE BOYS
Pyale is one of around 70 former kidnappers, gunmen and oil thieves living in this crumbling ex-hotel on a shallow and polluted creek in Port Harcourt. The retraining programme he is involved in is one of hundreds of its kind in the Niger Delta.
The government is paying for similar housing for ex-militants across the region, as well as giving them a 65,000 naira ($420) monthly stipend and footing the training bill. Not a bad deal in a country where many people live on $2 a day.
Support for Jonathan, the first head of state from the Niger Delta, in the upcoming elections is unsurprisingly strong. But his heritage alone will not guarantee him long-term loyalty and the goodwill could quickly run out if the amnesty is neglected.
The dozen former militants congregated around plastic tables and chairs in what was once the hotel bar are old acquaintances. Gangs have remained together and could quickly mobilise again even if it meant abandoning their training projects.
There are complaints that allowances aren't being paid directly to the "boys" but are controlled by former militant field commanders, like Ateke Tom and Farah Dagogo, who accumulated huge wealth before accepting the amnesty.
The government, not their former leaders, get the blame.
"This is the government's fault," said Favour Charles, 27, who says he used to drive a speedboat in Farah's gang.
"We were given accounts but the bank won't let me take the money and our commander comes and gives me much less. Pay us direct," he said, emphasising his displeasure by throwing off the sunglasses he wears even in the dimly-lit bar.
RESENTMENT
Militancy was born of resentment in the Niger Delta, where multi-billion dollar oil installations sit among villages of shacks perched on stilts over viscous, blackened water.
Foreign oil firms like Royal Dutch Shell (RDSa.L), Exxon Mobil (XOM.N) and Chevron (CVX.N) have suffered significant revenue and production losses due to attacks by the same militia who are now seeking their employment. But they have also made huge profits while polluting subsistence fishing communities.
The oil firms point out they pay billions of dollars in royalties to Nigeria each year and that, in a country of 150 million people, they can never be massive employers.
A deepwater oil rig, exactly where Pyale and Charles hope to work, employs less than a dozen entry-level labourers and jobs are even scarcer for higher-skilled staff in a high-tech industry with decreasing demand for boots on the ground.
Ministers have repeatedly said the solution to unemployment lies in non-oil sectors, and energy firms are unlikely to be able to absorb the thousands of newly-trained former militants who could come into the job market in the coming years.
Nigeria's budget proposes spending of over 90 billion naira on the amnesty this year. Unless Pyale and his fellow residents in this run-down hotel find work, it is a level of subsidy the government could be forced to maintain for years to come.
Jonathan is the favourite to win when Nigeria's 73 million people head out to chose their next president on April 16, and the Niger Delta is likely to be the bedrock of his support.
His biggest challenge will come once he is back in office.
"We will support him, why not? He is a son of the Niger Delta and he won't let his own people down," one gang member said, asking not to be named. "At least we hope so." (Additional reporting by Austin Ekeinde; Editing by Nick Tattersall)
reuters.com/article/2011/04/06/nigeria-militants-idUSLDE73317V20110406