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Nigerian oil: Anger in the delta over who gets paid

Borrowing a page from militants, a village chief threatens Shell over naming rights for the country's first well.

By Sarah SimpsonCorrespondent of The Christian Science Monitor / June 20, 2008

SOURCE: AP/Rich Clabaugh–STAFF

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Oloibiri, Nigeria

When foreign prospectors struck oil deep below the red earth and lush green forest of southern Nigeria, local residents held a wild all-night party that still brings toothless smiles to the wrinkled faces of village elders.

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Decades later, a peeling signboard at Nigeria's rusted oil well No. 1 bears the name Oloibiri, after this riverside village in southern Nigeria. But villagers in nearby Otabagi say the well is on their land and they want the local Royal Dutch Shell unit, to rename it.

What's behind a naming-rights dispute after so many years? The villagers suspect that high oil prices mean that Shell may reopen the well – shut down in 1977 – and that could mean more cash payments.

The village dispute is a microcosm of many larger fights here over getting a "fair share" of Nigeria's oil wealth. On Thursday, a militant group launched a rare attack on a Shell offshore oil installation. Shell told the Associated Press that it had shut down production from the Bonga Field, which normally produces about 200,000 barrels of crude per day.

The field accounts for about 10 percent of Nigeria's current daily output of around 2 million barrels per day – already significantly down from the amount produced before years of militant attacks degraded the oil infrastructure.

The Movement for the Emancipation of the Niger Delta, a militant group, told the Monitor in an emailed statement that they had kidnapped an American worker from a vessel they encountered while returning home from the attack. The US State Department confirmed that an American citizen had been taken hostage.

Meanwhile, the two squabbling villages make vague threats toward Shell, too, fueled by a similar sense of inequity.

"Our mothers and our fathers – we knew nothing about oil, we were ignorant about things at that time. There was no school, no nothing," said chief James Ekalagha recently at a meeting of some two dozen Otabagi chiefs and elders. "We are annoyed. See the community, how backward we are. If the name is not changed I will not permit them [oil companies] to enter the bush again."

Decades after oil began flowing in the 1950s, oil continues to be divisive in Nigeria, largely benefiting a superrich ruling class lording it over a poor majority. Despite earning billions from oil each year, most of Nigeria's 140 million people exist on just a couple of dollars a day.

Control of resources has also caused political splits. Since independence from Britain in 1960, Nigeria has divided into 36 federal states, as military and civilian lawmakers have sought greater regional control of federal money. While this decentralization of resources has enabled more political elites to feed at the oil trough, that money has not trickled down. Most Nigerians lack basics such as clean drinking water, electricity, or adequate education and health care.

This trend towards fractionalization, reflected in the Oloibori-Otabagi fight, undermines Nigeria's democracy, says Lucky Akaruese, a professor of philosophy at the University of Port Harcourt, in Nigeria's southern oil region. He says the state is becoming increasingly weak even as it is still trying to cement democratic rule since civilian rulers took over in 1999 from military juntas.

"Your family comes first, secondly your ethnic group, so the nation-state recedes to the background," says Professor Akaruese. "When the Nigerian state cannot protect lives, cannot protect property, of what use is the state? It will just wither away."

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