Wednesday, May 21, 2008

The Curse of Black Gold: Hope and Betrayal in the Niger Delta [3]

[... continued from last post]

From the air, it must look as if a patch of skin has been removed from the face of the forest.

Activists with human rights groups are pressuring Shell to learn from past mistakes and treat this high-profile project, which affects 90 villages, as a chance to work better with communities. Michael Watts is advising NGOs on how to educate the local people about their rights. "For Shell to conduct business as usual would be a public relations disaster," Watts says. "Folks say, 'Look, these oil companies are making billions by taking out this black stuff from our territory—they should have some ethical and social responsibilities.'"

A cautionary tale unfolds at Oloibiri, where a wellhead, or "Christmas tree," stands in an overgrown plot. Nothing has flowed from it for years. A weathered sign states the facts: "Oloibiri Well No. 1. Drilled June, 1956. Depth: 12,000 feet (3,700 meters)." Nearby, a plaque dating from 2001 commemorates a presidential visit and the laying of a foundation stone for the Oloibiri Oil and Gas Research Institute, a projected government-funded museum and library. The stone is still there, but nothing else. A few local youths guard the site, not so much to protect it as to demand money from anyone who wants to snap a picture.

In the town of Oloibiri, whose population has dropped from 10,000 to fewer than 1,000 in the past 30 years, a dirt road passes between rough-hewn houses, some roofed with thatch, others with sheets of corroding metal. A small shop offers a few bananas and yams. Inside the only freshly painted structure, a lemon yellow, two-story house, Chief Osobere Inengite of the Ijaw tribe apologizes for the appearance of his town: "Oloibiri is supposed to be compared to Texas," he said. "I ask you, in Texas have the people in 50 years seen one second of darkness? But look here, we have no light, no water, no food, no jobs."

The chief looked prosperous. He was wearing an ornate black-and-purple robe, a chunky coral necklace, and a black derby, his outfit for a neighboring chief's coronation downriver in Nembe later that day. Like most chiefs, Inengite has a business—dredging sand from the river for roadbuilding. He always keeps an eye out for visitors to Nigeria's historic Well No. 1. He wants them to leave Oloibiri with a message for Shell, which owns the local oil fields. "Tell them to help us. Tell them to train 50 boys and girls from here for jobs," the chief pleaded. Then he sighed, "If we had never seen oil, we would have been better off."

Where does all the oil money go? That question is asked in every village, town, and city in the Niger Delta. The blame spreads, moving from the oil companies to a bigger, more elusive, target: the Nigerian government. Ever since it nationalized the oil industry in 1971, the government has controlled the energy purse. In a joint venture arrangement, the state, in the name of the Nigerian National Petroleum Corporation, owns 55 to 60 percent of multinational oil operations onshore. The windfall in revenues from this arrangement has grown in real dollars from 250 million a year to more than 60 billion in 2005. During that time, even though the government has evolved from a military dictatorship to a democracy (the latest attempt at civil governance began in 1999), what has not changed is what an International Crisis Group report calls a "cancer of corruption." A Western diplomat quoted in the report was even more direct, referring to "the institutionalized looting of national wealth." The money involved is staggering. The head of Nigeria's anticorruption agency estimated that in 2003, 70 percent of oil revenues, more than 14 billion dollars, was stolen or wasted.

On paper, a mechanism does exist for distributing oil revenues somewhat fairly. The federal government retains roughly half and gives out the rest each month, on a sliding scale, to the 36 state governments. The core oil producers—Rivers, Delta, Bayelsa, and Akwa Ibom—receive the most. During the month I was in the delta, those four states divided up more than 650 million dollars.

But there is no discernible trickle down.

Newspaper articles and court cases document spectacular misuses of the money by military men and public office holders—such as the now imprisoned former Bayelsa governor Diepreye Alamieyeseigha—who stash hundreds of millions of dollars in foreign bank accounts to buy mansions in the U.S. and send their children to private schools in London. For the delta's 30 million people—most of whom struggle on less than a dollar a day—seeing this kind of money coming into their states with essentially none of it reaching them has created conditions for insurrection.

Nigeria's oil money won't keep coming, of course—perhaps another 40 years, the experts say. Natural gas is a fallback. Nigeria's reserves are estimated at 184 trillion cubic feet (five trillion cubic meters), good for an estimated 240 years of production at current levels. In the meantime, Antony Goldman says, "The government is following a simple plan for oil extraction: We've got to get what we can now, now."

Isaac Osuoka remembers the first time he saw frozen fish. It was the late 1970s, and he was five. A peddler caused a stir as he entered Osuoka's delta town of Oeliabi (now Akinima) with a carton of what he called ice fish. "We never had fish brought in from outside," said Osuoka, who now lives in Port Harcourt. "We had no idea what frozen fish meant. There were rumors that this fish was kept in a mortuary."

Frozen fish was a harbinger of the changes that would traumatize Osuoka's community. "As a boy, I could stroll to the rivers or back swamps with a rod and a net and come back with enough fish to feed my family," he recalled. "There was usually enough left over to sell, providing income for us to go to school." This bounty would not survive the coming of oil. Leaks from pipelines and wells, and the building of roads and canals, have disrupted the wetlands. "The degree and rate of degradation," the UN report warns, "are pushing the delta towards ecological disaster."

In 1996, Osuoka joined Environmental Rights Action, an advocacy group that helps communities defend their resources and learn their legal rights so they can avoid Oeliabi's fate. "We're seeing that environmental damages often happen silently, with their effects not coming out until years later," Osuoka said. "Today, there is not a single person in my community you could describe as a fisherman. We depend almost totally on frozen fish." At market stalls, a piece of frozen croaker or mackerel, most of it imported, goes for almost a dollar, unaffordable for most villagers.

The best environmental studies of the delta were done at least 30 years ago, according to Jimmy Adegoke, a Nigerian-born research scientist at the University of Missouri. To help fill the void, he and a team of researchers conducted fieldwork and a satellite-based study of the delta. They found that between 1986 and 2003, more than 50,000 acres (20,000 hectares) of mangroves disappeared from the coast, largely because of land clearing and canal dredging for oil and gas exploration. "That is a significant amount given how valuable the mangrove ecosystem is," Adegoke said, referring to the coastal forest's high productivity for fish populations. "I think the loss of one acre is too much. You're wiping out the means for people to sustain themselves."

[to be continued...]

Friday, May 16, 2008

The Curse of Black Gold: Hope and Betrayal in the Niger Delta [2]

[... continued from last post]

"I can say this," Osuoka said firmly. "Nigeria was a much better place without oil."

Such a stark indictment would surely draw reaction from the government and oil companies. But repeated efforts to arrange on-the-record interviews with officialdom—oil company executives, the governor of Rivers state, the commander of the Joint Task Force, which is the military arm responsible for security in the delta—were foiled. Shell and Total, a French company, had offered tours of their facilities, but soon after I arrived in the delta, a spate of kidnappings of foreign oil workers, especially around Port Harcourt, prompted the multinationals to restrict the movements of personnel. Amid the violence, the oil companies have hunkered down in silence.

At the Finima meetinghouse, the men grew restless and, one by one, drifted into the dusk. Before he left, Felix Harry declared that faith in God would reward the community. That belief must be deep on Bonny Island, judging from the barrage of signs for revival meetings and church services along island roads. One church promoted PUSH: Pray Until Something Happens. Christianity has found fertile ground in the delta after Protestant missionaries arrived in force in the mid-1800s, and it is now the dominant faith.

Harry recited Psalm 91, praising God with a flourish: "He is my refuge and my fortress." We walked outside. There, stranded on the shore, were the village fishing boats, several dozen of them. Only a miracle would get them into the water.

Across the delta, people are hoping that someone will pay attention to the region's problems and intervene. The U.S. and western Europe, the major consumers of Nigerian oil, are watching closely. With the U.S. consulate in Lagos warning of a possible rebel attack on Bonny Island, diplomats are urging greater military security. Stockholders of the oil companies are asking why the situation has turned so perilous. Who is to blame? The answers are as complicated and murky as the water trails in the delta.

When the oil curse began with that first great gusher in the creekside village of Oloibiri, 50 miles (80 kilometers) west of Port Harcourt, Nigeria was still a British colony. At independence in 1960, few observers expected that Nigeria would mature into an oil giant. But in subsequent decades, the oil companies, led by five multinational firms—Royal Dutch Shell, Total, Italy's Agip, and ExxonMobil and Chevron from the U.S.—transformed a remote, nearly inaccessible wetland into industrial wilderness. The imprint: 4,500 miles (7,200 kilometers) of pipelines, 159 oil fields, and 275 flow stations, their gas flares visible day and night from miles away.

No one can deny the sheer technological achievement of building an infrastructure to extract oil from a waterlogged equatorial forest. Intense swampy heat, nearly impenetrable mangrove thickets, swarming insects, and torrential downpours bedevil operations to this day. But mastering the physical environment has proved almost simple compared with dealing with the social and cultural landscape. The oil firms entered a region splintered by ethnic rivalries. More than two dozen ethnic groups inhabit the delta, among them the Ijaw, the largest group, and the Igbo, Itsekiri, Ogoni, Isoko, and Urhobo. These groups have a history of fighting over the spoils of the delta, from slaves to palm oil—and now, crude oil. The companies disturbed a fragile landscape that supported fishing and farming. Engineers and project managers constructing pipelines through a mangrove swamp, or laying roads through marshland, could disrupt spawning grounds or change the course of a stream, threatening a village's livelihood.

Recent reports by the United Nations Development Program and the International Crisis Group identify some of the questionable strategies employed by oil companies: paying off village chiefs for drilling rights; building a road or dredging a canal without an adequate environmental impact study; tying up compensation cases—for resource damages or land purchases—for years in court; dispatching security forces to violently break up protests; patching up oil leaks without cleaning up sites. "

After 50 years, the oil companies are still searching for a way to operate successfully with communities," says Antony Goldman, a London-based risk consultant. The delta is littered with failed projects started by oil companies and government agencies—water tanks without operating pumps, clinics with no medicine, schools with no teachers or books, fishponds with no fish.

"The companies didn't consult with villagers," says Michael Watts, director of the African Studies Program at the University of California, Berkeley. "They basically handed out cash to chiefs. It wasn't effective at all."

Last summer, skittish oil prices hit $78 a barrel, partly because of an attack on a Shell flow station. The high prices more than offset production losses caused by the growing instability, helping earn Shell and the other multinationals record profits in 2006. Meanwhile, more oil fields continue to open, many of them offshore where the infrastructure, though far more expensive than on land, is much safer from sabotage and theft. The deepwater fields are attracting aggressive new investors as well. China, India, and South Korea, all energy-hungry, have begun buying stakes in Nigeria's offshore blocks. "Most Western companies in Nigeria will find it difficult to compete, especially with China," Goldman says. That's because oil purchases by the Chinese come with their commitment to finance large infrastructure projects, such as rehabilitating a railroad line.

The largest new petroleum endeavor on the delta is taking shape along the Nun River, a tributary of the Niger. Operated by Shell, the Gbaran Integrated Oil and Gas Project, scheduled to begin producing in 2008, will encompass 15 new oil and gas fields, more than 200 miles (320 kilometers) of pipeline, and a sizable gas-gathering plant. New roads are already gashing the forest. Mounds of long black pipes await burial. Near a bank of the Nun, Nigerian soldiers crouch behind a ring of sandbags, a .60-caliber machine gun facing the road as they guard the entrance to the construction site of the gas plant. Cranes and bulldozers crawl over a cleared space large enough to fit two shopping malls. From the air, it must look as if a patch of skin has been removed from the face of the forest.

[To be continued...]

Tuesday, May 6, 2008

The Curse of Black Gold: Hope and Betrayal in the Niger Delta [1]

I read the following narrative with tears in my eyes. It's an article written by an outsider (Tom O'Neill) in the February 2006 issue of National Geographic. I stumbled on it quite by accident, while gathering data for my research. It's a long, long piece, one that I initially thought to truncate for readers' convenience. I told myself I'd leave in only the most important bits and probably throw in the URL for anyone who was interested in reading the whole piece. As I read on however, I found every word of the article to be at once gripping and heart-wrenching. So I've decided to break it into as many parts as necessary till it's exhausted.

Read on:

The Niger Delta holds some of the world's richest oil deposits, yet Nigerians living there are poorer than ever, violence is rampant, and the land and water are fouled. What went wrong?

Oil fouls everything in southern Nigeria. It spills from the pipelines, poisoning soil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try anything to scoop up a share of the liquid riches—fire a gun, sabotage a pipeline, kidnap a foreigner.

Nigeria had all the makings of an uplifting tale: poor African nation blessed with enormous sudden wealth. Visions of prosperity rose with the same force as the oil that first gushed from the Niger Delta's marshy ground in 1956. The world market craved delta crude, a "sweet," low-sulfur liquid called Bonny Light, easily refined into gasoline and diesel. By the mid-1970s, Nigeria had joined OPEC (Organization of Petroleum Exporting Countries), and the government's budget bulged with petrodollars.

Everything looked possible—but everything went wrong.

Dense, garbage-heaped slums stretch for miles. Choking black smoke from an open-air slaughterhouse rolls over housetops. Streets are cratered with potholes and ruts. Vicious gangs roam school grounds. Peddlers and beggars rush up to vehicles stalled in gas lines. This is Port Harcourt, Nigeria's oil hub, capital of Rivers state, smack-dab in the middle of oil reserves bigger than the United States' and Mexico's combined. Port Harcourt should gleam; instead, it rots.

Beyond the city, within the labyrinth of creeks, rivers, and pipeline channels that vein the delta—one of the world's largest wetlands—exists a netherworld. Villages and towns cling to the banks, little more than heaps of mud-walled huts and rusty shacks. Groups of hungry, half-naked children and sullen, idle adults wander dirt paths. There is no electricity, no clean water, no medicine, no schools. Fishing nets hang dry; dugout canoes sit unused on muddy banks. Decades of oil spills, acid rain from gas flares, and the stripping away of mangroves for pipelines have killed off fish.

Nigeria has been subverted by the very thing that gave it promise—oil, which accounts for 95 percent of the country's export earnings and 80 percent of its revenue. In 1960, agricultural products such as palm oil and cacao beans made up nearly all Nigeria's exports; today, they barely register as trade items, and Africa's most populous country, with 130 million people, has gone from being self-sufficient in food to importing more than it produces. Because its refineries are constantly breaking down, oil-rich Nigeria must also import the bulk of its fuel. But even then, gas stations are often closed for want of supply. A recent United Nations report shows that in quality of life, Nigeria rates below all other major oil nations, from Libya to Indonesia. Its annual per capita income of $1,400 is less than that of Senegal, which exports mainly fish and nuts. The World Bank categorizes Nigeria as a "fragile state," beset by risk of armed conflict, epidemic disease, and failed governance.

The sense of relentless crisis has deepened since last year, when a secretive group of armed, hooded rebels operating under the name of the Movement for the Emancipation of the Niger Delta, or MEND, intensified attacks on oil platforms and pumping stations, most operated by Shell Nigeria. Militants from MEND and other groups have killed soldiers and security guards, kidnapped foreign oil workers, set off car bombs in the delta city of Warri to protest the visit of Chinese oil executives, and, to show off their reach, overrun an oil rig 40 miles (64 kilometers) offshore in the Gulf of Guinea. The attacks have shut down the daily flow of more than 500,000 barrels of oil, leading the country to tap offshore reserves to make up for lost revenue. With each disruption, the daily price of oil on the world market climbed. According to the Brussels-based International Crisis Group, escalating violence in a region teeming with angry, frustrated people is creating a "militant time bomb."

From a potential model nation, Nigeria has become a dangerous country, addicted to oil money, with people increasingly willing to turn to corruption, sabotage, and murder to get a fix of the wealth. The cruelest twist is that half a century of oil extraction in the delta has failed to make the lives of the people better. Instead, they are poorer still, and hopeless.

Every day at Bonny Island, oceangoing tankers line up in Cawthorne Channel like massive parade floats. They're each waiting to fill up with close to a million barrels of the coveted Bonny Light, drawing the oil from a nearby export terminal. Ships have been gathering at this 15-mile-long (24 kilometers) barrier island since the mid-1500s, when slave trading between West Africa and the New World began. Beneath the contemporary cacophony—the yammer of motorcycle taxis, the call of Christian preachers from the market stalls, the throb of drums and guitars from boomboxes inside shacks—strains of anger and sorrow echo the tragedy of exploitation.

"It's not fair," Felix James Harry muttered in a meetinghouse in the village of Finima on the western end of the island, close to the oil and gas complex. "We can hardly catch fish anymore. Surviving is very hard." Harry, a 30-year-old father of two children, should have been in his canoe this afternoon, throwing out nets to snare crayfish and sardines. But he was sitting in an airless concrete-block shelter with half a dozen other fishermen, none of whom had much to do.

Their fishing community once stood on the other side of a small inlet, where fuel storage tanks the size of cathedral domes now loom, and where the superstructure of a liquefied natural gas plant juts higher than any tree in the forest. The relocation of Finima in the early 1990s jarred loose the community's economic moorings. "We can't support our families anymore," Harry said.

Houses in the new village are tightly packed, leaving little room for gardens. Windows look out on walls. In this claustrophobic setting, the men talked about nature. "The forest where the gas plant is protected us from the east wind," Solomon David, the community chairman, said. "Now, the rain and wind ruin our thatched roofs every three months. They lasted more than twice as long before." Another fisherman mentioned how construction and increased ship traffic changed local wave patterns, causing shore erosion and forcing fish into deeper water. "We would need a 55-horsepower engine to get to those places." No one in the room could afford such an engine.

The meetinghouse had no electricity, but a battery-powered wall clock, the only decoration, showed that another day was ebbing away. Forced to give up fishing, the young men of the village put their hope in landing a job with the oil industry. But offers are scarce. "People from the outside get all the jobs," Harry said, alluding to members of Nigeria's majority ethnic groups—the Igbo, Yoruba, Hausa, and Fulani—who are the country's political and economic elite. "We have diploma holders, but they have nothing to do."

Grievances crowded the dim room. Bernard Cosmos, a strapping young man in a striped polo shirt, spoke out: "I have a degree in petrochemical engineering from Rivers State University in Port Harcourt. I've applied many times with the oil companies for a good job. It's always no. They tell me that I can work in an oil field as an unskilled laborer but not as an engineer. I have no money to get other training."

Isaac Asume Osuoka, director of Social Action, Nigeria, believes that callousness toward the people of the delta stems from their economic irrelevance. "With all the oil money coming in, the state doesn't need taxes from people. Rather than being a resource for the state, the people are impediments. There is no incentive anymore for the government to build schools or hospitals.

"I can say this," Osuoka said firmly. "Nigeria was a much better place without oil."

[To be continued...]