The Niger Delta's oil curse
by Dudley Althaus
With sweat-drenched gym pants and T-shirt clinging to his bear-like body, one of the newer threats to world oil
markets stood in the heart of this Nigerian slum, preaching rebellion to a receptive crowd.
"Why should you be suffering when there is so much money on this land?" asked Alhaji Mujahid Asari Dokubo, 40, the
warlord of the moment in Nigeria's violence-racked oil patch. "This government is made up of thieves and liars and
wicked people," he said in slow, precise English. "You are the weapon that God has lifted up against them."
Many people stay poor while a few take the wealth pumped from beneath, the warlord, called Asari, told the gathering.
Pollution fouls the water, air and soil, he said, because neither the oil companies nor Nigeria's rulers wish it
otherwise. It's time to change things, Asari said, with bloodshed if necessary.
In late September, Asari declared "total war" against oil workers, who are often caught in the cross hairs of local
clashes. Thousands of foreigners, including Americans, toil in Nigeria. At least 300 Houston-area companies do
business in the country, including 24 with Nigerian subsidiaries.
Although Asari did not follow through with the threat, agreeing instead to hold talks with Nigeria's president, oil
prices spiked to more than $ 50 a barrel. In other times, in a different place, a man like Asari might remain
irrelevant to the wider world. He commands probably a few hundred young fighters in a small patch of Niger Delta
swampland.
But those coastal wetlands hold much of Nigeria's oil. And planners in Washington, London and Houston consider
Nigeria a key to the world's future petroleum supplies. The problem is, instability plagues Nigeria. Systemic
corruption and violence rooted in ethnic, religious and political conflicts continue to roil the country.
Nigeria "has never found a way to put all the pieces together in a fashion that would produce stability," said Marina
Ottaway, an analyst with the Carnegie Endowment for International Peace in Washington, DC, who studies African
politics.
With global oil supplies barely meeting demand and many oil-producing nations mired in crises, markets convulse at
the slightest bad news. The Asaris of the world, appealing to local grudges, injustices and resentments, wield
influence as seldom before.
An OPEC member, Nigeria is the world's seventh-largest oil producer.
Estimates of Nigeria's proved oil reserves: -- 25 bn barrels-35.2 bn barrels (OPEC)
Major customers(2003)
-- United States
-- Brazil
-- Spain
-- Indonesia
-- India
--Fifth-largest supplier of crude oil to US behind Saudi Arabia, Mexico, Canada, Venezuela
Crude oil exports
-- $ 20.9 bn (2003)
-- $ 16.5 bn (2002)
Corporations
The largest Houston-area companies operating in Nigeria include:
-- ConocoPhillips
-- Halliburton
-- Baker Hughes
-- BJ Services
-- Noble Corp.
Sources: US Energy Information Administration (DOE); CIA;
World Bank; UN Development Program; Oil and Gas Journal;
OPEC
"If the Niger Delta blows up, everybody suffers," said Judith Asuni, the US-born director of AA-PeaceWorks, an
organization that helped broker the talks between Asari and the government. "While it looks like a local conflict,
you have all these vested interests all over the world."
Multinational oil companies -- Shell, ChevronTexaco and ExxonMobil among them -- together have pumped billions of
barrels of oil from the area since production began in 1957. Large new discoveries offshore and the still-abundant
reserves of the delta mean Nigeria should be exporting petroleum for at least another 40 years.
Though it comprises about one-tenth of Nigeria's territory and population, the Niger Delta produces nearly all the
country's petroleum, about 2.5 mm bpd. That's about 3 % of the 82 mm barrels of oil the world burns daily. An average
of about 32,500 barrels of Nigeria's oil, about 1.3 % of its production, enters the Houston port each day.
The planners expect Nigeria, which supplies about 9 % of US energy needs, and its West Africa neighbours to produce
up to 25 % of America's oil imports within a decade after offshore fields are developed. Nigeria will account for
about half the amount. Billions of dollars in new investments are planned, including for plants to ship LNG to US
ports.
Since the return of democracy five years ago, Nigeria has been optimistically cast by Washington as a stabilizing
influence on Africa. Nigeria's troops man regional peacekeeping efforts. Its diplomats broker negotiations between
governments and rebels from Sierra Leone to Sudan.
"There is a lot riding on Nigeria," Ottaway said.
Oil has become the lifeblood of Nigeria, accounting for 95 % of its export income, four-fifths of its government
revenues, just about all of its economic prospects. Revenues from oil have deposited at least $ 350 bn into the
national treasury in the past five decades.
"The oil comes from the delta, but the politics of it is countrywide," said Edmund Daukoru, the Nigerian president's
senior adviser on petroleum issues. "Everyone depends on it."
But the delta's 14 mm people have been left with little more than poverty, pollution and pent-up rage. If the world
wants more of Nigeria's oil, Asari and other militants say, better terms must be given to the people living atop
it.
"We can clearly see that the demand for oil is becoming very tight," said Dimieari Von Kemedi, a Niger Delta
political and environmental activist. "People in the villages understand this, and they are willing to act on it."
As it has in many poor and precarious societies, oil dependence here has helped nurture corruption, pervert politics
and poison the landscape. Academics and social reformers call it the "oil curse."
Oil money "makes us lazy. It makes us forget what we used to be," said Nuhu Ribadu, the Nigerian government's
anti-corruption czar. "With all the money that has come into this country, we have nothing to show for it. What can
you say is a success story? Nothing."
Oil spills -- more than 4,000 have been recorded during the past five decades -- stain farmlands and waterways,
killing crops and fish. Burned-off natural gas spews toxic chemicals. Competition for unskilled jobs financed by the
oil companies cleaves communities. Violence arising from ethnic and political disputes kills more than 1,000 people
in the delta every year.
Nigeria's great surge in oil income in the 1960s and '70s coincided with the country's long night of military
dictatorship. Corruption became embedded. Nigeria now is ranked the third-most corrupt country on Earth, after
Bangladesh and Haiti, according to an October report by Transparency International, an independent, anti-corruption
organization.