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Reuters: ‘Leaked’ Report says Shell actions feed Nigeria violence

Reuters: ‘Leaked’ Report says Shell actions feed Nigeria violence

Sun 13 June, 2004 04:35

By Dino Mahtani

LAGOS (Reuters) – The corporate behaviour of Royal Dutch/Shell in Nigeria feeds a vicious cycle of violence and corruption, contributing to the theft of its crude oil, according to a leaked report funded by the oil giant.

And increasing criminalisation of the poverty-stricken Niger Delta could force Shell out of onshore production in Africa’s largest oil producer by 2008, the report by consultants WAC Global Services said.

Shell executives acknowledged the company had inadvertently fed the violence, saying it was difficult to operate ethically in the Niger Delta and that its attempts at community development “had been less than perfect”.

A company statement said while it had commissioned the report to gain a greater understanding of conflict in the delta, it did not totally agree with the findings.

“The 2008 date quoted in the report was solely the view of the report’s authors. It is not a view with which we agree. Government and local communities must take the lead in ending conflict,” it said.

Escalating violence in the delta kills more than 1,000 people a year, the report said, as criminal gangs siphon off millions of dollars of crude oil in the swampy delta mangroves, with proceeds used to buy weapons — often from soldiers — and fuel ethnic warfare.

The lucrative theft or “bunkering” of oil is provoked by the company’s behaviour towards local communities, many of which it isolates with its land acquisition and hiring policies, and by its contractors’ corrupt behaviour, the report said.

OIL THEFT FUELS FIGHTING

“It is important to note that illegal oil bunkering is probably the most significant accelerator of conflict in the Niger Delta,” the report said.

Industry analysts say up to 100,000 barrels a day are siphoned from pipelines in a process known as “hot-tapping” and sold to Nigerian or foreign buyers at around $15 a barrel. World oil prices are around $35 a barrel.

“One day’s worth of illegal oil bunkering in the Niger Delta will buy quality weapons for and sustain a group of 1,500 youths for two months,” the report said.

Violence between criminal gangs, often backed by powerful political or ethnic figures have made the delta one of the most inhospitable places in the OPEC member country.

The delta conflict could escalate further as the country approaches presidential elections in 2007, as oil thefts are likely linked to political campaigns, the report said.

This year’s local elections were postponed in the oil-rich town of Warri in Nigeria’s Delta state due to fears tensions between ethnic groups could escalate into another round of bloodletting.

An armed uprising by militants of the Ijaw tribe in Delta state last year killed scores of people and forced oil companies to temporarily shut 40 per cent of the country’s oil output.

Nigerian state authorities this month began a new military operation to disarm criminal gangs engaged in bunkering in the delta, killing 17 suspected criminals last week.

Shell, which produces almost half of Nigeria’s total oil output, has long battled to preserve its image in arguably one of the world’s most corrupt countries.

At least 11,000 people have been killed in sectarian violence since Nigeria returned to civilian rule in 1999.

Leaked Shell Nigeria Report PEACE AND SECURITY IN THE NIGER DELTA: December 2003

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