Monday, July 09, 2007

Nigeria's huge oil wealth has brought misery

By David Blair, diplomatic correspondent for the Telegraph (UK). Prayers for the people of Nigeria, for deliverance from poverty and corrupt leaders (like Peter Akinola).

The immense wealth bestowed on the Niger Delta by the hand of nature has brought nothing but misery to most of its people.

This verdant region of creeks and inlets sits on most of Nigeria’s 35 billion barrels of proven oil reserves.

In theory, oil companies operating in the Delta could produce about 2.5 million barrels of crude every day.

In reality, they rarely achieve this level of output thanks to a campaign of sabotage and violence mounted by local militants, who style themselves the Movement for the Emancipation of the Niger Delta (Mend).

Barely a month goes by without these heavily armed gunmen, who roar through the creeks on motorboats, kidnapping a few foreign oil workers.

Since last January, 31 Britons have fallen into their hands. All have been freed unharmed, usually after the payment of ransoms.

Oil companies have little choice but to pay up because Nigeria’s security forces are incapable of mounting the kind of rescue mission in which the captive has a reasonable chance of emerging alive.

The gunmen have a simple grievance. Their home region produces billions of pounds worth of oil every year, yet most of its people endure grinding poverty.

Oil revenues enter the coffers of foreign multinationals or Nigeria’s government.

According to one estimate, Nigeria’s rulers stole or misused £220 billion in the 40 years after independence from Britain in 1960.

So the Delta’s oil wealth lines the pockets of corrupt politicians while the region’s roads, schools and hospitals fall to pieces. The militants feed on this deep sense of grievance.

While local politicians campaign for the Niger Delta to receive a bigger slice of the country’s oil revenues, the gunmen of Mend adopt a more direct approach. They specialise in extorting money from foreign oil companies.

Kidnapping expatriates is their favourite method, but they are also masters at collecting protection money.

The penalties for non-payment can be severe. Pipelines are sabotaged and oil terminals destroyed.

Nigeria’s army has deployed in force to secure this vital region. An undeclared guerrilla war has been fought in the Delta’s creeks for the last five years or so. But there is no sign of Mend being crushed. On the contrary, oil companies live with the ever present danger of sabotage.

But for as long as oil prices remain high, the profits from doing business in the Delta will continue to outweigh the risk.

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