In Nigeria, rich promise unfulfilled

AZUZUAMA, Nigeria -- An acrid smell wafts over the boat. Soon rainbow-colored streaks and psychedelic swirls become visible, dancing on the still creek waters. The forms, pretty enough to be art, are in fact ugly signs of the latest oil spill in the Niger Delta.

Days earlier, residents of this remote village say, a pipe belonging to Italian oil company Agip began spewing crude. Now the lattice-like roots of mangrove trees, normally tan at the waterline, appear jet black. A man scoops up a dead fish, its silver scales tarred. Two men in the chest-deep water cup their hands and bring up inky liquid.


This is the seventh spill in three years, villagers say. They drink from the creek, bathe in it, eat its fish. Yet there has been little to no cleanup or compensation by Agip or the government. "We are peace-loving, but because of the nonchalant attitude we want to wage war," says Job Molo, 36, who is unemployed and out of patience.

Nigeria has been pumping oil for 50 years, reaping more than $500 billion in earnings that account for three-quarters of government revenues, according to the World Bank. It supplies 9 percent of American crude imports, a figure some experts predict will rise as the U.S. tries to reduce its dependence on the volatile Middle East.


But oil's true legacy here is not measured in dollars per barrel. Many believe this natural bounty has proved more curse than gift for Nigeria, whose leaders have persistently squandered chances to reinvest the oil wealth in ways that would bolster the nation's economy and provide basic services for its citizens.

And despite recent progress -- a tough pollution fine on Royal Dutch Shell, and fledgling steps by oil companies and nonprofit groups to help build more sustainable communities -- the advances have been too meager to blunt Nigerians' frustration and militants' increasing attacks against oil companies.

Communities across the oil-rich Niger Delta lack electricity and water, and endure rundown schools, clinics and roads, if they exist at all.

Worse, people have suffered because of oil. Pollution has hurt fishing livelihoods, and the government's gluttonous appetite for oil income at the expense of other industries has stunted the national economy, leaving legions jobless.

"That oil boom created a mentality in rulers that they didn't need to develop a diversified economy," said E.J. Alagoa, a historian now retired from the University of Port Harcourt. "All you needed to do was spend the money."

Per capita income is little changed from a half-century ago; the average Nigerian still lives on about $1 a day. And no region in this most populous country in Africa is poorer than the delta, home to 20 million people and most of the oil. Official mismanagement and greed are responsible for much of the waste.

Frustration has stoked a surge of militancy this year that has shaken world oil markets and helped push up U.S. gas prices. Well-armed militants operating stealthily in the creeks have forced a 20 percent to 25 percent cut in Nigerian oil output by taking hostages and attacking pipelines, killing dozens of security personnel.

Many fear the violence could intensify. That might prove annoying for U.S. gas consumers at the pump, but it would be devastating for beleaguered Nigerians, many of whom say their country and their lives would be better if oil had never been found.


From hope to despair

In August 1953, Shell oil explorers buzzed down tributaries of the Niger River on speedboats to the island village of Oloibiri. Three years later they made a big strike nearby, the first in all Nigeria.

Sunday F. Inengite, a local chief in his 70s, remembers the dawn of Nigeria's oil era as a time of hope and possibility. Today the village stands as a bleak, if typical, example of a delta community that has produced many millions of oil dollars for corporations and the Nigerian government, with little to show for it.

Power lines and communal water taps that have not worked in years seem to taunt Oloibiri's several hundred residents. The modest houses are made of cinderblock or plaster-covered mud brick and are arranged on the sandy island in two uneven rows. All sit dark except where kerosene lanterns emit feeble light.

The state government installed the wires in the 1980s. "For a period of 10 years there was no problem with light," the chief said. "We were very happy. We had light. A few people enjoyed radio, television -- before the breakdown." The breakdown, sometime in the 1990s, took distant gas turbines off-line, darkening Oloibiri.

In 2002, Shell pledged to restore power, Inengite said; it and the quasi-public Niger Delta Development Commission have said for months that light would return to Oloibiri, but the contractor -- a nephew of the village king -- keeps missing deadlines.


Inexplicable duplication produced two water towers for the village. The government's, begun in the 1990s, never worked and sits abandoned. Shell's tower fed communal taps for several months a few years ago.

"It was very fine water," recalled Inengite. "It was clean, sparkling, tasteless." Then a generator broke, and the system remains under repair. Villagers drink from the polluted river or murky, shallow wells.

The river that rings the village yields smaller and fewer fish, attested to by the handful of three-inch fish that 75-year-old Joanna Ide caught in her net one morning. "Before we had fish like this," she said, extending her arm its full length. "Before we got plenty of fish; now we don't get plenty."

It has reached the point where Inengite, when he has money, ventures to the twice-weekly market at nearby Ogbia Town to buy fish caught in the Gulf of Guinea 50 miles south.

"What they have done to Oloibiri is injustice, wickedness," Inengite said of the oil companies and government ministries, sitting on his crumbling concrete porch as chickens tottered into the house. The community might have been poor, he said, but "we were not dying like a poisoned rat. Nobody cares for us. They have sentenced us to death."

Unmet promises are nothing new to villagers. In the early 1970s, the state government built a sprawling, one-story hospital here in a visible attempt to pump oil wealth back into the community. It never opened for reasons no one seems to know.


In 2001, the country's democratically elected president, Olusegun Obasanjo, attended the groundbreaking for the grandly named Oloibiri Oil and Gas Research Institute, which was supposed to bring honor and jobs. The site still bears an elaborate stone marker, surrounded by tall grasses, but no institute.

Frustrated Nigerians have turned repeatedly to Shell, Chevron, Exxon Mobil and other multinational oil firms to fulfill the state's duties. But the companies have at times made a bad situation worse, critics say, by focusing on ill-conceived patchwork solutions to placate residents.

White elephant projects -- vacant or half-finished hospitals, schools, waterworks -- abound in the delta. Many were paid for by Shell, the largest oil company in Nigeria. Shell says it has learned from mistakes highlighted in a 2003 internal report the company commissioned.

The stinging analysis said the Anglo-Dutch giant "creates, feeds into or exacerbates conflict" by paying oil-producing towns and villages with ill-conceived projects or cash.

"There is no evidence that spending more money will lead to less conflict in the Niger Delta," concluded WAC Global Services. "If anything, there is ample evidence to suggest that providing more money to communities may even exacerbate conflict."

In some cases, conflicts have led to deadly clashes involving residents of neighboring villages. Often local gangs would storm nearby oil installations to demand money.


Shell, like its competitors, says little publicly about its operations. It has refused to make anyone in Nigeria or at its European offices available for interviews, and answered only select questions via e-mail.

While Shell says it is committed to finishing "legacy" projects like those in Oloibiri, it now directs millions of dollars per year to more "sustainable" community development. In one town, the company paid for a well and an electric transformer and sends an engineer to monitor upkeep. But it was a local committee that chose, and now manages, the project, rather than letting Shell or a local chief decide what was best. Residents told The Sun they were happy with the results.

In a similar vein, the nonprofit Pro-Natura International has spent a decade on what it calls "participatory" community development as an antidote to the typical approach in which hefty oil company contracts often enrich local elites without helping ordinary people. Using funds from oil companies and European governments, Pro-Natura trains local residents in skills such as literacy, basic accounting and creating development plans.

In one community, residents empowered by Pro-Natura designed programs to teach midwifery, build latrines, sink cement-lined wells and help fishermen tap small loans for nets and boat repairs.

Such "bottom-up" programs are "models for an approach that could reverse the cycle of poverty and violence," according to a recent report by the International Crisis Group, "but only if their scale is significantly broadened to include a wide range of groups in oil producing areas."

'Dying' Niger Delta


Nowhere has the pumping of oil touched the environment more widely than in the creeks that were and remain a lifeline across the delta -- "creek" being a catchall term that describes everything from rivers a half-mile wide to streams barely wide enough for a dugout canoe. People rely on the creeks for daily needs such as drinking water. With just one-fifth of the delta accessible by roads, creeks are the main transit network.

Since 1960, there have been more than 4,000 oil spills in the delta, according to the U.S. Energy Department. That is an average of more than seven spills a month. The causes are regularly disputed. Communities often insist a leak stemmed from pipeline corrosion or poor maintenance; oil firms say many are the work of saboteurs hoping to get paid to clean up their backyard.

Last year, Shell said sabotage accounted for more than half of its 224 spills and 94 percent of the 12,000 barrels spilled.

To date, there has been no independent, publicly released study of oil's environmental impact on the delta. And much oil remains to be extracted. Nearly all of Nigeria's 36 billion barrels of proven reserves lie beneath the swamps or to the south in the Gulf of Guinea. At current rates, it will take about 40 years to pump it all out.

The government has made some efforts to get tough. In February, the Nigerian high court upheld a parliamentary order requiring Shell to pay $1.5 billion for environmental damage. Shell has appealed and says in company reports that it continues to improve its environmental record.

But some say irreversible damage has been done. "The Niger Delta is dying," said Nalaguo Chris Alagoa, a marine biologist now working with Pro-Natura and a nephew of E.J. Alagoa, the historian. Overfishing and farm runoff are contributors, he said, but the main culprit is petroleum.


In Azuzuama, residents say fishing has declined markedly in the creeks. Most people live in simple houses and have no job besides subsistence fishing or farming. The traditional king of Azuzuama, N.T. Matthew-Eyewei IV, said Agip paid the community only once: $6,250 for a spill that leaked 12,600 gallons of crude in 2004. In his view that did not offset the damage from that spill or six others over the past three years.

"Only that meager relief was paid," he said, sitting on a couch in the salmon-colored reception room of his royal palace, akin to a modest home in most parts of the U.S.

Residents spotted the latest spill in early May, and some went to Agip's offices in the coastal town of Brass. But he said "nothing has been done."

The National Oil Spill Detection and Response Agency, an arm of the Nigerian government, said that 7,140 gallons of oil were spilled and that the cause was corrosion, not sabotage. It said a second spill a month earlier in Azuzuama leaked 2,310 gallons, also because of corrosion. In both cases, the agency said the flow of oil was stopped "immediately" and cleanup commenced.

But in June, activist Damka Pueba visited the scene. "There was just oil everywhere," she said by telephone shortly afterward. "I didn't see any sign of cleanup." Agip's only action was to place green tape around the broken pipe to stanch the flow, said Pueba, who works for a nonprofit group called the Stakeholder Democracy Network.

Last Tuesday, an anti-oil activist named Owei Bousindei said in a phone interview that "nothing has been improved; they never did anything."


Agip at first told The Sun it knew nothing of the area. "Regarding Azuzuama, none of my colleagues know this field -- we do not have any participating stake," e-mailed Filippo Cotalini, a Milan-based spokesman for Agip's parent, Eni.

Days later, the public affairs director for Agip's Nigeria subsidiary acknowledged the spill but directed questions to Akin Aruwajoye, deputy managing director.

Aruwajoye, reached by phone, told The Sun: "If there was a spill and you saw it, how do you want me to say a thing about it?" he said. "You said you saw it; what am I supposed to tell you, that you didn't see it?"

Aruwajoye said he would answer questions by e-mail but never did.

Battling corruption

"Government is all about providing services to the people," Gov. Goodluck Jonathan of Bayelsa State, said as he relaxed on a sofa at his luxurious, marble-adorned official residence. "That is our commitment. Any money that gets into our hands is for the people."


Lately, that is a lot of money. Under a federal policy that pays oil-producing states 13-percent of national oil income, Bayelsa State -- one of three states that produce the bulk of the oil -- is taking in $52 million a month.

Yet few signs point to benefits for most of the state's 1.5 million people. A block from the governor's home in the state capital Yenagoa, rutted dirt lanes are lined with flimsy houses that have no piped water and only intermittent power.

Jonathan succeeded Diepreye Alamieyeseigha, who was arrested last year in Britain, where authorities found $3 million in a London home and charged him with money laundering. While out on bail he fled to Nigeria on a fake passport. Impeached and removed from office, he faces trial on corruption charges.

Corruption and mismanagement have long dogged Nigeria, especially regarding oil dollars. Prior to the President Obasanjo's election in 1999, a succession of military leaders pillaged the treasury of oil funds. One, Gen. Sani Abacha, who ruled for five years in the 1990s until his death, made off with $4 billion by some estimates, only some of which his family has returned.

Democracy, re-achieved in 1999, has hardly ended the graft. In its 2006 list of countries perceived as most corrupt, Transparency International ranked Nigeria 14th out of 163. Official thievery has starved public services, from clinics to schools to water and sewer systems. If the government fulfilled its duties, oil company officials say privately, they would feel less pressure.

"It's clearly the feeling that the oil industry has the role of the government among some communities," one oil industry executive said on condition of anonymity because he was not authorized to speak publicly on the matter.


One sign of progress is Nigeria's embrace of a two-year-old initiative that calls on oil companies to "publish what you pay" and on governments to reveal the payments. This year, the first independent audit of Nigeria's oil sector was released. It uncovered gaps between how much oil companies said they paid the government and how much the central bank reported. The still-unexplained discrepancies were "significant," the auditors found, reaching $230 million in 2002.

"These are certainly very early steps on a very long road," said Ian Gary, an Oxfam America oil specialist who co-wrote a Catholic Relief Services report on oil in Africa. "There has been more progress on transparency in Nigeria than I would have expected. But overall I think it is still really teetering on the edge of a very dire situation."

Despite being the twelfth-biggest oil producer in the world, Nigeria ranks 158th out of 177 countries on the UN's list of "human development," with life expectancy of just 43 years.

Nigeria has plenty of company as an oil state bedeviled by the "paradox of plenty," as the Catholic Relief Services report describes it. The study found that living standards fell and development slowed after oil's emergence in a dozen countries, including Algeria and Trinidad and Tobago. In Nigeria, the report said the effect was "catastrophic."

Nigeria's military rulers -- who capitalized on fragile political institutions to seize power by 1966 --had little incentive to serve the public in this ethnically and religiously divided nation, he said. The people had no vote, and successive regimes, all funded by oil earnings, relied little on tax dollars. The police and army met protest with violence.

The democratic era has not brought hoped-for changes.


"Not only is government failing in the most egregious possible way to meet its human rights obligations, but politics has become completely unaccountable," said Chris Albin-Lackey, a researcher at Human Rights Watch. "Everything is about how big a piece of the cake goes where, and [there is] very little emphasis about what should happen to it once it arrives there."

Jonathan, who is 49, said he hopes to change that, and Pueba, the activist, said his approach so far has been more inclusive than most. "At least he listens to people," she said.

The governor said the state may create its own oil company to develop what are called marginal oil fields. To add jobs, he wants oil companies to open local offices and hire more "Niger Delta boys." To improve skills, the federal government has approved a new polytechnic institute for Bayelsa.

Jonathan said new gas turbines will add reliability to the state's electricity network, which is separate from the equally woeful national grid. And he said new technology to purify creek water could vastly expand safe drinking water.

Yet the state's current crop of capital projects may seem odd amid such need. Besides a new hospital and waterworks, the state is building a 500-room "five star" hotel and developing Ox-Bow Lake as a tourist destination despite the near absence of tourism in Nigeria.

To help finance more projects, Jonathan is pushing for a near-doubling of oil money the state gets from the federal government. "We're now agitating for 25 percent," he said. If that were to happen, "you'll see a lot of changes. Frustration will be very, very minimal."


Mounting frustration helped fuel this year's militancy. And experts say national and local elections scheduled for April could worsen the violence if, as happened before 2003 elections, politicians use thugs to intimidate opponents' supporters. In fact, human rights experts say today's leading militants rose to prominence on the backs of crooked politicians.

More bloodshed would in all likelihood cut oil output further and push up gas prices in the U.S. Another spike in violence would also deepen the misery for innocent Nigerians who find themselves caught up in the delta's chaos.

"A number of militant groups have begun allying themselves to local politicians with electoral aspirations," warned a recent Crisis Group report. They are using "legitimate grievances, such as poverty, environmental destruction and government corruption, to justify increasingly damaging attacks against government and oil industry targets."

In July, 14 people were killed in disputes linked to rival politicians in Rivers State, next door to Bayelsa, the report said, adding that "few would dispute that the security situation is deteriorating."

Governor Jonathan, from the air-conditioned comfort of his reception room, offered a more sanguine view. To him, politicians like himself have the power to ease the delta's problems, not exacerbate them, during the remaining decades that Nigeria has oil to sell.

"I'm not a soothsayer," he said, "but I know all this crisis is economic. If we create wealth in this area, these fears will go. It is not as bad as people paint it. I don't share the belief the Niger Delta is collapsing."