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Oil giants face uncertain future as tribal clashes over land grow more violent in Niger Delta

Financial Times: Oil giants face uncertain future as tribal clashes over land grow more violent in Niger Delta

By Michael Peel

May 05, 2004

In Koko town in Nigeria’s oil-rich Niger Delta, the floor of the ruined local government headquarters crackles as visitors trample on fragments of the caved-in roof. Filing cabinets have rusted shut and excrement on the floor has long dried since an attack in April last year that local Itsekiri people say was carried out by Ijaw youths from downriver.

The walls are covered in graffiti: one message says the Itsekiri “did not love themselves”, while another describes the volatile oil city of Warri, two hours away by car, as the “HQ of trouble”.

Two weeks ago the Delta region hit the news again after five Nigerians and two US oil workers were killed in an attack on a boat after they were sent by ChevronTexaco, the US oil multinational, to assess whether it was safe to restart its 140,000 barrel-a-day swamp operations in the western Delta.

The Delta has been troubled by long-standing tensions between the Ijaw and Itsekiri about land ownership and political power. But over the last decade, as multinational oil companies have become more deeply involved in the region, the conflict has grown ever more deadly. After fighting erupted just over a year ago oil multinationals temporarily shut down more than a third of the nation’s 2m barrel-a-day production.

The conflict between members of the Ijaw and Itsekiri communities, and the resulting security crackdown, has killed scores of people and displaced thousands of others – and has raised big questions about the long-term future of oil production in the region.

In a underdeveloped region of isolated communities and little infrastructure, oil is one of the only sources of income, security and jobs. Itsekiri leaders claim the Ijaw are trying to occupy the land so they can bargain for more money and jobs from the oil companies, although the Ijaw deny this.

After the recent attack Chevron, the country’s third-largest oil producer after Royal Dutch/Shell and ExxonMobil, said it was concerned about the future of its operations in the Delta. The company claims it has no plan to withdraw permanently, but says it has scrapped attempts to return to the swamp areas until it is satisfied they are secure.

Shell, which accounts for almost half of the country’s oil output, has reopened its fields around Warri but still faces significant security problems. Harriman Oyofo, external relations manager for the western Delta region, has a closed-circuit television on his desk monitoring what is going on outside his door: downstairs, three police officers sit at the main entrance to the building with a rifle on the table in front of them.

Shell has been heavily criticised by human rights groups over its record on community relations and its willingness to do business in Nigeria during successive repressive dictatorships in the 1980s and 1990s.

The company experienced huge negative publicity in 1995 after Nigeria’s then military government executed Ken Saro-Wiwa and eight other activists who were protesting in areas where Shell operated. Demonstrations still force temporary shutdowns of Shell facilities from time to time and local people say the company has created social divisions by funding wasteful projects and investing in some communities while ignoring others.

Mr Oyofo claims much of the disruption to the company’s activities stems from the activities of a criminal minority rather than from widespread community anger. Many of the things Shell is asked to do, such as providing roads and social services to a region desperately short of both, are the responsibility of government. According to the finance ministry, Delta state’s February revenue allocation from the federal government is the largest of any of the country’s 36 states.

The regional conflict has been further exacerbated by highly organised operations to steal tens of thousands of barrels of oil a day from pipelines and well-heads. Brigadier-General Elias Zamani, commander of a peacekeeping force set up in Warri last year, says militant youths use the proceeds of the thefts to buy weapons.

Asked if it is local people, armed forces members, government officials or foreigners who are most responsible for the theft, he replies simply: “All”.

Koko is a reminder of how oil money has fed into a complex environment of deadly political powerplay, criminality and local anger with oil multinationals and the government over pollution and underdevelopment.

On the waterside road leading past the ruined local government secretariat, a sign displays the Shell logo alongside the incongruous message: “Keep Nigeria clean, safe and healthy”.

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