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Nigeria: Oil bounty is daunting curse


- John Donnelly

(Thursday, October 6, 2005)

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"Shell officials say that an average of 100,000 barrels of oil per day were stolen from their pipelines in 2003, but that so far this year the pilferage dropped to 20,000 barrels a day."


Under the vast swamps of Nigeria's coastal delta sit some of the world's most productive oil reserves, a treasure coveted by the energy-hungry countries. Nigeria produces 10 percent of the oil consumed in the United States and U.S. energy officials forecast that oil from Nigeria and the rest of the Gulf of Guinea region will provide one-quarter of America's oil in the next decade, equal to that of the Gulf of Mexico today. Already, 30 percent of the world's newly discovered oil reserves in the past five years have come from this stretch of Africa's west coast. But here in the serpentine creeks and boggy coastal land lie daunting obstacles to those hopes: pirates, corruption, violent militias and environmental catastrophes. Tens of thousands of ordinary villagers try to scrape a life out of the marshes, amid the oil rigs and pipelines.

Endurance Godbless, 18, waded through a tributary of Kolo Creek on a recent day, parting translucent orange-red waters polluted by an oil spill. He lifted a fishing net, revealing a dead fish caught in the webbing. "Poison," he said, tossing the fish into the weeds. This summer, two unrelated oil spills converged in the waters surrounding this village of 1,000 people, killing life in the creek. "I feel like crying," Godbless said, walking out of the water, his pants shiny from the oil residue. "I can only fish, but there are no fish anymore."

The story is similar from Nigeria to Angola, along Africa's restive west coast: Oil and natural gas reserves are drawing the developed world's interest and raising expectations for the region's poor of a better future through investment and growth. But environmental damage and often-violent jockeying for the spoils are fueling instability and popular resentment into a combustible anger. With global oil supplies struggling to keep up with demands for energy, even a short-term disruption of African oil would trigger spikes in prices at gas stations around the world. Nigeria, despite its president's aggressive fight against corruption, presents one of the most challenging problems in Africa and has the greatest potential to inflict havoc on global oil markets. Nigeria accounts for about half of the Gulf of Guinea's oil.

In the southeastern part of the country, where much of the oil lies under marshland, the recent arrest of two prominent leaders of the Ijaw tribe, including the governor of one state on corruption charges and a militia leader, Alhaji Mujahid Dokubo-Asari, on charges of sedition, has exacerbated tensions among militant, young Ijaw people, oil companies and the federal government. Last month, Dokubo-Asari's followers seized two oil-flow stations and sent an e-mail message to news organizations threatening to "kill every iota of oil operations in the Niger Delta" unless he was released. Authorities recaptured the stations, but the situation remains tense. "It is so dangerous now," said Aryakwee Nsirimovu, 44, executive director of the Institute of Human Rights and Humanitarian Law in Port Harcourt. "For the last five years, you've had a buildup of weapons among the militia, and you have a weak military. So if things blow up, they will be incredibly difficult to control."

For many peasants, Nsirimovu said, oil is a curse. "We have poverty in the midst of plenty, and everyone sees that wealth every day," Nsirimovu said. After oil was discovered in the delta in 1957, Nigeria began transforming from an agriculture-based society to an oil-dependent economy. The country now has to import food, and its troubles have become so numerous and so intertwined that resolving them could take years. President Olusegun Obasanjo's government has initiated ambitious changes aimed at curbing the endemic corruption that analysts say reaches from the highest levels of government to low-ranking officials in the field. Without such theft, Nigerian officials said, tens of billions of dollars in spending for education, health care and infrastructure could reach the poor.

Large-scale theft takes place in the open, carried out by low-level operatives who work for sophisticated crime syndicates with ties to senior government, military and police officials. Nigeria's crude oil is pumped to the surface in the marshlands and then to flow stations, where machines remove water and add gas. The gas helps propel the oil along pipelines to coastal farms of giant tanks and then out to ships. The thefts take place in the marshlands, before the oil reaches the huge coastal terminals. Thieves use high-tech equipment to tap into the lines and divert the oil into waiting barges. The barges then bring the stolen oil to tankers waiting offshore.

Officials with Shell Oil, which produces half of the country's oil, and the Nigerian government said the Nigerian Navy has become more aggressive in stopping the thefts, called "bunkering." Shell officials say that an average of 100,000 barrels of oil per day were stolen from their pipelines in 2003, but that so far this year the pilferage dropped to 20,000 barrels a day. However, U.S. military officials who have traveled to the Niger Delta say the total national theft is likely much greater - 200,000 barrels a day, which at $65 a barrel is a $13 million daily heist.

Nigeria's new antigraft watchdog, the Economic and Financial Crimes Commission, estimates that 45 percent of the country's oil revenues are stolen, wasted, or siphoned away in the marshes. That means few delta residents realize any oil benefits. A World Bank report last year estimated that as much as 80 percent of Nigeria's oil revenues benefited 1 percent of the country's population. Some communities are so disillusioned that they want oil companies to cap their wells and leave. "We have no electricity, no running water, no hospital," said Socrates Dokubo, 37, a fashion designer. "For more than 48 years, they have been fooling us with promises. No more. We want them to leave."

Environmental problems have also been chronic. In the mid-1990s they prompted significant agitation among activists from the Ogoni tribe, who claimed that Shell was in collusion with what was then a military government to avoid responsibility for widespread damage to Ogoni land and villages. Ken Saro-Wiwa, the leader of the group, was arrested, tried and hanged along with eight other Ogoni in 1995. Such conflicts persist. In August of this year, members of five communities seized Shell's Agbada I station. The protesters said it was the only way to get fair compensation for a spill that polluted their land in December 2003. The unarmed protesters shut down the Shell station for six days, blocking about 267,000 barrels of oil from reaching Shell's terminals - a loss of almost $17.4 million at today's oil prices. OBEDUM, Nigeria Under the vast swamps of Nigeria's coastal delta sit some of the world's most productive oil reserves, a treasure coveted by the energy-hungry countries.

Nigeria produces 10 percent of the oil consumed in the United States and U.S. energy officials forecast that oil from Nigeria and the rest of the Gulf of Guinea region will provide one-quarter of America's oil in the next decade, equal to that of the Gulf of Mexico today. Already, 30 percent of the world's newly discovered oil reserves in the past five years have come from this stretch of Africa's west coast. But here in the serpentine creeks and boggy coastal land lie daunting obstacles to those hopes: pirates, corruption, violent militias and environmental catastrophes. Tens of thousands of ordinary villagers try to scrape a life out of the marshes, amid the oil rigs and pipelines.

Average homes in Nigeria's coastal delta region( Niger Delta )
Average homes in Nigeria's coastal delta region( Niger Delta )


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