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The Globe & Mail (Canada): The slippery trail of Nigeria's black gold: “While millions of dollars worth of oil and natural gas are pumped every single day, the great majority of people still live in grim poverty.”: “…it is Shell that tends to be the focus of debate, a sort of shorthand for the industry as a whole because it was Shell that worked in the region called Ogoniland, where Mr. Saro-Wiwa first drew international attention to the practices of the oil companies, and because Shell has the biggest onshore presence (97 operating fields and 6,200 kilometres of pipeline).”: Posted Sunday 1 January 2006


The spoils of oil have created some messy relationships, STEPHANIE NOLEN finds




Saturday, December 31, 2005 Page A11


 IWHREKAN, NIGERIA -- In the early morning of July 21, deep below the ground, a 40-centimetre pipeline burst not far from the centre of this little town. Dark, pungent crude oil began to bubble, then spurt, then pour from the ground, soaking the soil, washing into a nearby creek, quickly running down into the river. It coated the leaves, the twigs and each blade of grass, filling the air with a dark, cloying smell.


Underneath Iwhrekan run five pipelines, installed in the 1960s by an earlier incarnation of the Shell Petroleum Development Co. not long after oil was first discovered here in the Niger Delta.


A pair of paid pipeline supervisors from Iwhrekan who patrol the ground above the pipelines each day or two noticed the leak and notified the company. A day later, Shell sent a team that took four days to get the holes clamped off and sealed. The investigation, joined by town and government representatives, concluded that equipment failure, rather than sabotage, was to blame.


And so the 1,000 people of Iwhrekan were entitled to compensation from Shell and a cleanup contract as part of the complex social contract that governs these deals in the delta. The town council could select one contractor to conduct the mop-up from a list preapproved by Shell. That contractor, in turn, would have to sit down with the council and negotiate compensation for Iwhrekan from their earnings.


What happened next is a story about the messy relationships between the oil companies, the government of Nigeria and the people who live atop the oil reserves.


It is also a cautionary tale with relevance far beyond Nigeria's borders. The country currently supplies 10 per cent of North America's oil, and the government hopes to double its production in the next five years. As the world's big oil producers seek to diversify out of the Middle East, Africa and the Gulf of Guinea in particular are growing in importance all the time. A third of the world's newly discovered oil reserves in the past five years have come from the west coast of Africa. This is enormously promising for African countries as record-high oil prices have brought unprecedented amounts into the state coffers of Nigeria and Angola this year.


Despite that promise, the Niger Delta offers a grim lesson about the mix of oil and Africa. While millions of dollars worth of oil and natural gas are pumped every single day, the great majority of people still live in grim poverty. Gangs of heavily armed youths routinely seize control of production facilities and the night sky above many villages glows orange from an adjacent gas flare. Crews are struggling to restore production after two suspicious pipeline explosions in the past 10 days cut oil flowing from Nigeria by 7 per cent.


In short, remarkably little has changed in the decade since the activist Ken Saro-Wiwa was executed by the military after starting a campaign to demand accountability from the industry.


In Iwhrekan, the town council -- all men, in their 30s and 40s -- discussed the issue of the cleanup contract, selected a fellow from the village to act as contractor and sent Shell his name on Aug. 1. In exchange for the business, the council expected the contractor to compensate the town along the same lines as the previous contractor they named to clean up a spill on their communal land. He bought them 100 plastic chairs, did some work on the crumbling community hall and hired 11 men from the community to work on the spill for 10 weeks at $18 a day. They hoped the new contractor might repair the boreholes, since the town had no source of clean drinking water then, and buy more chairs.


But a week later, a different villager showed up with his own crew and said he was sent by Shell to conduct the cleanup. Furious villagers believed someone in Shell's middle management had made a deal giving him the contract -- instead of the man they chose -- in return for a cut of the budget. They physically stopped him and his crew from working. The man left. The oil sat there, soaking deeper into the soil and slowly oozing over the yellow booms Shell had put out to contain it.


Then, people in Iwhrekan say, at 4 a.m. on Oct. 28, the man sent by Shell came back with a group of inebriated soldiers he'd collected at a local hotel. Residents say the soldiers fired indiscriminately, wounding one teenager, set fire to four houses and two cars, and detained more than a dozen young men. Hundreds of people fled into the bush. The town council chairman, Daniel Oweh, says he was badly beaten; he still has fading bruises on his chest and arms.


"They said they had come in relation to the spillage contract and that [the Shell-appointed contractor] would kill everyone if he doesn't proceed," Mr. Oweh said.


But people in the town have held fast, preventing work by anyone but their man. "It is our right. In Shell policy, if it is not sabotage, we have the right to approve the contractor. By doing this they have mashed on our head, and that is what we are fighting about," said Paris Ayarienoro, the assistant secretary of the community council. "If we accept this contractor, then we are done for life. They can impose anybody."


The oil will stay on the land, coating their fish traps and nets and soaking their farmland until they get their way. "We are willing to leave it forever," Mr. Ayarienoro said.


After the raid, the government got involved and decided that Shell should name a third contractor to carry out the cleanup. But the council also rejects that idea and, in conversations in the streets, residents all agreed emphatically with the decision. The council members say they won't meet with Shell because the company is their tenant and it would be beneath them to go and petition.


Shell tells a different story. The company says it gave the contract to someone from the village as per normal procedure, but that contractor failed to do the job, and that "contrary to the reports, SPDC did not invite any security agents to the community and did not play any role in the reported involvement of any side to the crisis."


It ended the unfilled contract on Oct. 28, the company said in a statement. "It was therefore not possible that SPDC, or anyone authorized to act on its behalf, could have mobilized to the worksite and invited security agents to provide cover in respect of a voided work order." Since then, work has been on hold pending community directives, Shell said.


"Nobody in the company ever connived with anybody from the community to do the job," a SPDC staffer said emphatically, but anonymously. "Probably all this has to do with a power play within the community."


Ultimately, only two things are clear: that the spilled oil is still there, and that normal behaviour here has been warped almost past recognition by decades of interaction with the world's wealthiest industry.


"The story told is, 'Big oil is exploiting poor Nigerian villagers,' but the lines are much more blurred than that," said Dan Hoyle, a Fulbright scholar from San Francisco who has been researching the region. In many villages, he said, chiefs and middle managers collude on contracts.


Shell says that 97 per cent of the volume spilled in its operations is sabotage (groups of young men frequently use hacksaws to cut the pipelines); Mr. Hoyle confirms that great quantities of sabotage occur at the hands of people who deliberately break the pipes and pollute their own land because the cleanup contract is the only, or the best, prospect they can see for earning cash.


It is clear that people in Iwhrekan feel they have a unique relationship with Shell. "We need a good road, we need water, we need money for old people and a hospital," said Chahor Djakpa, a 70-year-old woman who remembers when the first oilmen showed up in the delta in the 1950s. "It is up to Shell to provide these things because they acquire things from our land. When the land was acquired, it was Shell who came to us, not the government, and we know Shell, not the government, because Shell is the one we see."


Six major petroleum companies operate in Nigeria, but it is Shell that tends to be the focus of debate, a sort of shorthand for the industry as a whole because it was Shell that worked in the region called Ogoniland, where Mr. Saro-Wiwa first drew international attention to the practices of the oil companies, and because Shell has the biggest onshore presence (97 operating fields and 6,200 kilometres of pipeline).


Mr. Hoyle noted that while people confuse the responsibilities of the government and Shell, it is also true that it is safer to protest against the industry than the government, which still reacts harshly to any perceived attack on its main revenue source.


"If you protest the government, you get shot," he said. "You might get shot if you protest the oil companies, but the Western press might come. . . . The military will burn down a town and leave it smouldering to send a message."


Shell and the other petroleum companies pay the government both hefty royalty fees and taxes -- in Shell's case alone, $6.2-billion (U.S.) last year. The country took in a total of $27-billion (U.S.) in oil revenues in 2004 -- money, pointed out Don Boham, Shell's chief of external affairs, that ought to be paying for roads, clinics and pensions.


Yet remarkably little of that money makes its way to places such as Iwhrekan. The town is not electrified, its borehole pumps are broken, and it sits at the end of a dirt road filled with craters. Children run naked, their bellies swollen with worms. Of Nigeria's 127 million people, 91 per cent live on less than $2 a day.


Where does the money go? Nigeria consistently ranks among the most corrupt nations in the world -- in the top five of watchdog Transparency International's list -- year after year. There is wholesale looting of state coffers by federal officials and state governors, and an earnest anti-corruption effort by President Olesegun Obasanjo has had only minimal impact. The new Economic and Financial Crimes Commission says that nearly half of Nigeria's oil revenues are wasted or stolen.


International interest in the area is growing, as the delta's oil becomes ever more strategically important, but the region still has a distinct lawlessness, said Simon Lewis, who works with the British conflict-resolution group Coventry Cathedral.


"The military don't come down here very much. The government can't deal with the crooks. The problems here are very hard to resolve: mass poverty and unemployment, high volumes of disaffected youths and enough money sloshing around to buy . . . a significant number of weapons."


In Iwhrekan, the blustering young men who sit and smoke potent marijuana in the shade all day say they are ready to seize the adjacent gas plant at any moment. And Mr. Oweh, the council chairman, said he believes there are plenty of guns around. He said he would like to see the oil spill -- still stinking, six months later -- cleaned up, but the onus is on Shell to play by the rules and at least come and negotiate again. Anything else, he said, "and there will be trouble and conflict . . . there will be nothing left here."


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