Deep inside Nigeria's violent oil region

Militants are stepping up attacks in the wake of the country's fraudulent elections.

from the May 4, 2007 edition

Page 4 of 4

Page 1 | Page 2 | Page 3 | 4

Fingesi estimates that more than a third of Nigeria's total oil production is sold illegally. According to Fingesi, Nigeria's production is much higher than the official figures, around 3.8 million barrels a day (not 2.6 million). As a member of the OPEC cartel, Nigeria is only allowed to export 2.2 million barrels a day, leaving 1.6 million barrels for its own internal consumption.

"The problem is that our refineries are not working to capacity, so we can only turn 300,000 barrels per day into diesel or petrol for domestic consumption," says Fingesi, who quit his government job in 2003 because of death threats. "So then Nigeria has this excess crude that it cannot sell, and the only way to sell it is illegally. 1.6 million barrels a day, at $65 per barrel, you're talking $100 million a day, and none of it goes into government coffers."

Getting the excess oil out is a risky – and illegal – business, one that has been taken up by armed local gangs and militant groups. These groups break into oil pipelines and siphon off hundreds of barrels of oil at a time into nearby tanker trucks or small fishing vessels. This "bunkered" oil is then taken out into the high seas and sold to waiting oil tankers, bound for Asia, Europe, Russia, and even the US. Sometimes, instead of paying in cash, shipping captains pay the militants with arms and ammunition. One oil company executive, speaking on condition of privacy, says that the only solution is for the government to rein in corruption.

"One of the key problems in Nigeria is rotten corruption," says this executive. "This country produces oil. It could be a rich country. So when you see corruption on one hand and poverty on the other hand, and then this instability as well, it's a big problem."

In his swampland hideaway, just a half-hour speedboat ride from the outskirts of Port Harcourt, Tom says that he promised Governor Odili not to disrupt this election. "I promised not to do anything this time, since they promised to settle with us," he says. "But if [the government] does not do anything [to help the Delta's people] after the election, I will start to attack them again."

1 | 2 | 3 | Page 4

Click to enlarge Rich Clabaugh – Staff