Nigerian Oil: The Role of Multinational Oil

Companies

Amarachi Okorie
E297c Term Paper
Spring Quarter 2005

Outline
Introduction
I.
Background
A. Oil Producing Regions & Peoples
B. National History of Mismanagement
II.
Legacy of Oil Production
A. Corruption, Crime, Conflict
i. Corruption and Crime
ii. Conflict and Displacement
B. Environmental Disaster
i. Oil Spills
ii. Gas Flares
C. Consequential Poverty
III.
Repairing the Niger Delta
A. Eradication of Conflict and Violence
i. Improving Security Policies
ii. Mediation Within Communities
iii. Judicial Reform
iv. Self-Governance
B. Environmental Restoration
i. Pollutants
ii. Health Education & Benefits
iii. Natural Resource Conservation
C. Addressing Poverty
i. Compensation
ii. Community Building
iii. Education & Employment
IV.
Positive Development
A. Chinese in Africa
B. Renewable Energy
V.
Conclusion
References

Introduction
Although Nigeria is the largest African oil exporter and the fifth among the Organization
of Petroleum Exporting Countries (OPEC), over 70% of its population lives in poverty.
The petroleum sector currently makes up about 40% of the GDP, and about 95 percent of
exports. With over 35 million barrels in oil reserves and producing about 2.5 million
barrels per day, the Niger Delta region in southern Nigeria is a major crude oil exporter to
both the US and Western Europe. But despite the apparent abundance of such a coveted
and lucrative resource, the economic situation in Nigeria is appallingly non-correlative.
The objective of this paper is to examine the role of multinational oil companies in the
culture of economic and environmental impoverishment; to consider what compensatory
action should be taken by these entities, and also recommend various strategies and
programs they should implement to bolster and restore the Niger Delta.
In the following sections, I first describe the oil-producing areas, followed by an
overview of historical factors that have contributed to the long-ailing Nigerian economy.
Next, I examine the socio-economic, political and environmental consequences of oil
drilling and production, focusing on the role of multinational corporations involved.
Third, I prescribe strategies for compensation and development that the oil companies
should adopt in order to rebuild and develop their host communities, as is their
responsibility. And last, I discuss successful investment and development projects to
serve as exemplary models for multinational oil companies.

I. Background
In order to appreciate the oil issues plaguing Nigeria, it is important to first understand
the geography of the oil-producing regions, and identify the primary beneficiaries of the
highly lucrative oil industry.
A. Oil Producing Regions & Peoples
The majority of Nigerian oil is located in close to 250 small fields in the Niger Delta,
with less than 50 million barrels per field. The following map shows the location of the
Niger Delta region, with key oil fields highlighted:

Figure 1: Map of the Niger Delta

The Niger Delta is in Southern Nigeria and consists of the tributaries that run from the
Niger River, through the land, and into the Atlantic Ocean. The cities of Port Harcourt
and Warri are home to major oil refineries owned jointly by the major multinationals and
the Nigerian National Petroleum Corporation (NNPC). The following table displays these
companies, their stakes in the major fields along with their production quantities.

Major Nigerian Oil Production Joint-Ventures

Operator
Other
NNPC
(% interest)
Partners
(%
(% interest)
interest)
Shell (30%)

TotalFinaElf
(10%)
Agip (5%)

55%

ExxonMobil
(40%)
ChevronTexaco
(40%)

None

60%

None

60%

Agip (20%)

Phillips
(20%)
None

60%

TotalFinaElf
(40%)

60%

Major Producing Fields

Bonny or Eastern Division Nembe, Cawthorn Channel,

Ekulama, Imo River, Kolo
Creek, Adibawa and
Etelelbou
Forcados or Western
Division - Forcados Yorki,
Jones Creek, Olomoro,
Otumara, Sapele, Egwa and
Odidi
Edop, Ubit, Oso, Unam and
Asasa
Meren, Okan, Benin River,
Delta/Delta South, Inda,
Meji and Robertkiri
Funiwa, Middelton, North
Apoi, Pennington and
Sengana
Obama, Obiafu, M'Bede,
Abgara and Oshi
Obagi, Aghigo, Okpoko,
Upomami, Afia and ObodoJatumi

Production
Barrels per
Day
950,000
(2003 Est.)

500,000
(2003 Est.)
485,000
(2003 Est.)

150,000
(2003 Est.)
150,000
(2003 Est.)

Table I: Oil Fields in the Niger Delta (from the US Energy Information Administration)

The locations listed in the fourth column represents the numerous communities and
peoples of the tribes in Imo, Edo, Abia, Delta, Ondo, Edo, Rivers, Akwa Ibom,
Baylesa and Cross Rivers states. These ethnic groups include the Ijaw, Ogoni,
Urhobo, Itsekeri, Ogba, Egbema and Ndoni.
According to the Nigerian constitution, the federal government owns all minerals,
oil, and gas in Nigeria, and thus has preeminence over the oil in the Niger Delta.
Table I shows that the Nigerian government, through the NNPC, holds 55 to 60% of
the production interest in these primary fields. But despite its dominant stake, the oil
revenue has not made significant positive difference in the lives of the citizens of
those regions.

B. National History of Mismanagement

Since 1970, when Nigeria began large-scale exportation of crude oil, a long string of
corrupt military dictators, politicians and government officials, both domestic and
international, have profited from bribery, kickbacks, and other dishonest means, on a
relentless march of exploitation that has consistently sunk the oil-rich country into the
list of the 30 poorest countries in the world. A 2002 World Bank document on the
OPEC revealed that approximately 80% of revenues from Nigerian oil and natural gas
accrue to only 1% of the population. The other 20% of revenues is spread out to 99%
of the population, leaving Nigeria with the second lowest per capita oil export
earnings put at $212 (N28,408) per person in 2004 [Vanguard].
Additionally, there are the losses caused by corruption and crude oil theft,
estimated at more than 100,000 barrels a day. According to anti-graft chief Nuhu
Ribadu, corruption costs Nigeria 40 % of $20 billion annual oil income, and about 4%
of national oil exports are stolen every day in Nigeria (Reuters). Also, a commission
of inquiry lead by economist Pius Okigbo, appointed by General Abacha shortly after
taking power in 1993, estimated that $12.2 billion in oil earnings had disappeared
between 1990 and 1994 [HRW]. In a government rife with bribery and corruption at
all levels, many such incidents of wrongdoing occur with no individual or
organization held to account.
In the remainder of this paper I highlight the role of multinationals in funding and
perpetrating such systematic abuse of power and resources by first examining the
socio-economic and environmental impact of the presence of oil corporations in the
Niger Delta area of Southern Nigeria.

II. Legacy of Oil Production

There are 18 international oil companies operating in Nigeria, with a few dominant
players such as Shell, Exxon/Mobil, Chevron/Texaco, Elf and Agip accounting for an
estimated 99% of the crude oil production [NIPC]. Some of these majors, for instance
Shell, have had a presence in Nigeria since the 1950s; it is thus important to examine the
long-term impact of their presence and policies on the tribes and peoples of the coastal
Niger River Delta in order to determine a path towards repair of economic and
environmental damages. The most serious consequences of oil drilling and production in
the Delta include the persistence of unrest and crime due to corrupt, ineffectual
governance and the degradation of life-engendering natural resources.
A. Corruption, Crime, Conflict
Over the decades of oil production, the severe corruption problem at the federal level
has seeped down to local levels, to the heads of the communities in the Niger Delta.
With numerous complicated layers composing the system of bribery, payoffs and

kickbacks, oil-motivated crime and conflict between indigenes and the governmentbacked multinationals, have given rise to unsafe, violence-ridden communities. These
problems have been worsened by a chronic lack of transactional transparency and
concern for the welfare of indigenes. Federal and state government officials, the
military, representatives of multinational oil companies, heads of local communities,
and gangs have jointly woven the tangled web of corruption and crime.
1. Corruption and Crime
The percolating resentment of inequitable and negligent fiscal policies amongst the
peoples and tribes of the Niger Delta towards the government and oil companies has
erupted into more frequent and explosive confrontations in recent years. For instance,
in their desperation to wrest a livelihood for themselves, unemployed youth join tribal
warlords, gangs and militant groups to takeover oil fields, sabotage facilities, kidnap
oil workers, and engage in other aggressive negotiation tactics, intending to force
multinationals to acquiesce to various monetary, political and social demands.
Among the elements fueling tensions is the issue of awarding protection
contracts and employment. Contracts are essentially payoffs granted by oil companies
to local chiefs and influential people in the communities. They are awarded,
purportedly, to protect oil-drilling operations from piracy and crude oil thievery
(bunkering) by other gangs. The contracts are also used to distribute employment to a
very limited pool of indigenes. They are often inequitably and corruptly distributed,
and end up pitting tribe against tribe, gang against gang, and result in intra- and intercommunity rivalries and violence.
2. Conflict and Displacement
In recent years, thousands of civilians have been caught and massacred in the
crossfire between the military-backed oil companies and tribal gangs, and well as
local militants, and even environmentalists. Most notorious were the 1999
assassination of Ogoni environmental and social activist Ken Saro-Wiwa and the
subsequent rioting and annihilation of the town of Odi by Nigerian military forces on
behalf of Shell.
Numerous similar incidents of unrest quelled by force in towns such as
Umuechem and Tombia have resulted in appalling loss of lives and property, as well
as the displacement of citizens, with a handful of major cities like Port Harcourt
experiencing a surge in refugee emigration from the oil-producing regions. There
have also been incidents of peaceful protests, as in the town of Kaiama, during which
hundreds of youths were gunned down and women violated by the federal soldiers
called in by oil companies [BBC].
Such military involvement, at the request of the power-wielding multinationals,
has done nothing to resolve the larger problem of the efforts of the oil companies,
both active and passive -- in collusion with the federal government -- to suppress the
rights and rightful privileges of the Niger Delta peoples by consciously and
systematically eliminating them from decision-making processes. These policies have

resulted in decades of blatant dispossession and exploitation of land resources without

substantial reciprocal compensation or community development. Moreover, lack of
self-determination and social justice leads to further unrest, as uneducated, jobless
and hungry young men continue to join ethnic and political militias to vent their
frustration and earn livelihoods from oil bunkering and piracy.
B. Environmental Disaster
The regions of the Niger Delta are known for their highly swampy conditions ideal
for a fishing economy, but after over four decades of oil spills and gas flares, much of
the fishing creeks are now barren; land has been seriously damaged and reduced to
wasteland.
1. Oil Spills, Leakage and Waste
Based on quantities reported by the operating companies, the NNPC estimates that
approximately 2,300 cubic meters of oil are spilled in 300 separate incidents every
year. And due to under-reporting, the aggregate spillage is believed to be at least ten
times higher. A Human Rights Watch report also cites statistics from the Department
of Petroleum Resources (DPR) that between 1976 and 1996 a total of 4,835 incidents
resulted in the spillage of about 2.5 million barrels (102.7 million U.S. gallons), of
which an estimated 1.9 million barrels (79.7 million U.S. gallons; 77 percent) were
lost to the environment [HRW]. Records for the period show that approximately 6%,
25% and 69% respectively of the oil spilled in the Delta were in land, swamps and
offshore ecological beds [CEAR].
A 1998 Oil Spill Intelligence Report documents the largest Nigerian spill, an offshore
well blowout in 1980, during which more than 200,000 barrels of oil (8.4 million U.S.
gallons) discharged into the Atlantic Ocean from a Texaco facility. DPR estimated
that over 400,000 barrels (16.8 million U.S. gallons) were spilled in this incident
[OSI]. Following this major 1980 spill, as many as 180 people from one community
were reported dead as a result of water pollution. In fact, tests conducted to determine
the hydrocarbon content of drinking water in some Delta communities found levels of
360-600 times the levels allowed in European Union countries [HRW].
The saturation of soil with hydrocarbon content from oil spills is similarly dismal.
In addition to harming human life, vegetation such as mangrove forests is particularly
susceptible to oil spills, because the soil soaks up the oil, and it is released every rainy
season. The 1980 spill destroyed 340 hectares of mangroves. And all over the Delta
there have been numerous reports of dying marine life, of severe impact to fishing
communities.
In a human rights violation press release, the Environmental Rights Action (ERA)
in Nigeria held ExxonMobil responsible for a 1998 oil spill in Akwa Ibom State,
which released over 40,0000 barrels of crude oil into area rivers, creeks and
farmlands. The spill has continued to affect the ecological systems of several
neighboring communities in Rivers, Bayelsa and Delta states [ERA]. Other oil

companies, including Shell, have received similar attention for environmentally

destructive production and disposal practices.
In addition to oil spills, damaged and corroded pipelines have leaked significant
amounts of oil and production waste into the environment. Oil and gas pipelines are
ubiquitous and have contributed to the devaluation and destruction of farmland and
natural vegetation.
High pressure pipelines are susceptible to oil leaks; they spurt out over a wide area,
destroying crops, artificial fishponds used for fish farmingeconomically valuable
treesand other income-generating assets.a small leak can wipe out a years food
supply for a family, with it wiping out income from products sold for cash [HRW].
2. Gas Flares
In addition to degradation of air and water quality from oil pollution, gas flaring the
practice of burning off natural gases that are byproducts of oil production - causes
acid rain, which damages and hinders the pollination and growth of crops in these
predominantly farming communities [TO]. An estimated 20% of global gas flares
occur in the Niger Delta, from approximately two billion cubic feet of natural gas
burned daily. Gas flares are also suspected to contribute to global warming which
leads to increases in GHG emissions and frequency of natural disasters like flooding.
Further, the toll exacted by air pollution and induced hotter temperatures on the health
of the people who live in very close proximity to the oil plants, and who live in
impoverished village settlements without hospitals, electricity or clean running water,
has been extreme and largely disregarded by oil companies, the Nigerian government,
and the international community at large.
C. Consequential Poverty
Most communities in the Niger Delta earn their livelihoods by fishing and farming.
But with the land devaluation and damage to natural resources, agriculture has
suffered, food has become increasingly expensive and even scarce, and exportation of
key crops such as palm products has decreased dramatically.
With corrupt administration at all government levels, necessary infrastructure
such as roads, clean running water and electricity are unavailable to these
communities, worsening their conditions. Proper healthcare is also not accessible to
numerous localities, where the effects of environmental pollution are the most
evident.
Exacerbating the poor living conditions is the widespread lack of formal
education and literacy. Moreover, adequate higher education is for the well-to-do,
leaving virtually the entire population barely literate, unemployable and collectively
incapable of communal self-development.

Further, the oil companies in the region only train and employ a handful of indigenes
for jobs other than manual labor, choosing instead to bring in predominantly foreign
workers. As a result, the income and profits from oil drilling do not significantly
infuse the local economy. And given the historical lack of adequate economic
compensation or social responsibility, by both oil companies and the federal
government, the peoples of the Niger Delta have continued to marinate in poverty
despite the world-coveted treasure in their own backyard.

III. Repairing the Niger Delta

In view of the devastating legacy of oil production in Nigeria, and the lack of just,
corruption-free government, I propose that the multinational oil companies take a more
proactive role in securing and safeguarding the right of the peoples of the oil-rich Niger
Delta to freedom and a livelihood. They should implement reparatory action to mitigate
the decades of damage wrought on the peoples and lands of the Delta as a result of oil
production.
In this section I recommend action for the oil companies to take in response to the major
problems presented in the previous section. National and international rights groups such
as the Environmental Rights Action (ERA) group in Nigeria and Human Rights Watch
have made some of these recommendations in the past.
A. Eradication of Conflict and Violence
Oil company prerogatives have long been at the heart of conflicts and crime waves
that have claimed the lives and livelihoods of many indigenes of the Delta. With great
leeway given by the Nigerian Federal government to largely act as sovereign entities,
multinationals have great responsibility in ensuring that the unrest arising from
discontent over their policies be handled with methods in keeping with human rights
standards.
1. Improving Security Policies
As discussed previously, multinational oil companies have employed security forces,
including the Nigerian military, navy, and police to secure their holdings against
vandalism, attacks, and to suppress protestors. But in the process, these personnel
have repeatedly committed acts in violation of human rights by use of excessive
force.
In a 1999 report, Human Rights Watch called on multinationals to jointly establish
a committee of the Oil Producers Trade Section of the Lagos Chamber of Commerce
to monitor the human rights situation in the oil-producing communities and make
public and private protests to the Nigerian government when violations occur

[HRW]. In addition to forming this organization, I am recommending the following

actions to provide transparency and facilitate order:

Report and account for all hired personnel

Conduct background checks and cease from employing individuals with record of
past human rights violations
Set up procedure for hiring and training both company security employees and
contracted personnel according to human rights standards. Provide training for:
o Managing peaceful protest
o Dealing with environmental activists, researchers and investigators
o Resolution of armed and unarmed conflict with appropriate force
Report all intervention by federal military forces, whether or not they are sent at
the request of the company
Publicly protest any violations of human rights and record all armed
confrontations by the Nigerian government on behalf of oil interests
Publicly condemn acts of repression against environmental activists, independent
investigators and whistle-blowers
Pressure the Nigerian government to undertake prosecution of personnel involved
in human rights violations
Report and record all negotiation and confrontation with community members,
leaders, militant groups or activist
Ensure that all orders and purchases of weapons and security equipment
(helicopters, tanks, firearms, etc) meet international standards for peacetime
security, and are reported and recorded
Advise community leaders and citizens of security policies

Executing these steps would help reduce the awful propensity of security forces
toward violent reprisals in the Niger Delta, and thus interrupt the long-running cycle
of conflict.
2. Mediation within Communities
As a result of their influence on local politics and their contribution to the power
struggles, the multinational oil companies also have a responsibility to reduce the
tensions in their host communities. They must diffuse rivalries and dissent over
ownership of oil-rich land, contracts, compensation, and other resources in the
following ways:
-

Initiate negotiations with disenfranchised groups including local militants and

gangs, rather than waiting for eruption of armed confrontations. Attacking oil
pipelines and engaging in other aggressive action has often been the most
effective way to gain the attention of the oil companies and the government.
Multinationals can change this trend by providing a table of equal, active and
productive exchanges between the host communities and company representatives
Involve third-party mediators (not including the Nigerian government) in
negotiations with community representatives to ensure that all parties receive fair

hearing in disputes. Many groups frequently resort to violence because

negotiations are often biased towards oil companies.
Pressure the Nigerian government to enter mediated negotiations with host
communities over land ownership and property allocation
Institute and publicize new procedure for granting any employment or contracts
Work with communities to end competition among ethnic groups for resources,
and end preferential treatment of one tribe or clan over another
Find equitable units for distributing resources such as oil royalties
Fund retraining of militia members for peace-keeping and community-building
efforts

3. Judicial Reform
The Nigerian judicial system is crippled by widespread corruption. And since oil
interests fuel the corruption, multinationals should ensure that the citizens of the
Delta find justice in their efforts to protest any form of marginalization, seek redress
for crimes committed against them, or make legal claims. To accomplish these goals,
multinationals must:

Cease from influencing judicial officials to protect their interests

Publicly condemn acts of injustice against indigenes of their host communities
Call for independent, internationally-supported investigations of legal complaints
against them by environmentalists, human rights activists, and citizens who are
generally at risk for abuse within the legal system
Pressure the Nigeria government to institute due process for citizens under
prosecution by publicly protesting incidents of unwarranted or prolonged
imprisonment, torture, and other intimidation tactics used to secure oil interests.
Work with UN, the African Union, and other international bodies to set up judicial
processes for regulating multinational oil companies and for addressing past
atrocities and human rights violations committed against the peoples of the Niger
Delta

Reform of the judicial system will ensure justice for all and contribute to peaceful
interaction between multinationals and their host communities.
4. Self-Governance
The Nigerian constitution grants all lands and resources to the federal government,
which has in effect acceded much of its authority to oil interests, both foreign and
domestic. And despite Nigerias independence from colonial rule under Great Britain
in 1960, the peoples of the oil-producing Niger Delta region have continued to suffer
decades of oppression and denial of their right to self-determination, at the hands of
the federal government and oil companies. Consequently, the region has become a
hotbed of conflict between frustrated citizens and oil interests.
Therefore, given their political and economic power, multinational oil companies
must play an active role in giving the people a voice in matters than greatly affect
their livelihoods. Multinationals must take the following steps towards that objective:

Actively advocate locally elected leaders

Cease from supporting government appointees selected to secure oil interests
Cease from financially or materially influencing political campaigns, with the
intent of installing oil puppets i.e. politicians sympathetic to oil companies to
the detriment of the community
Publicly advocate increased and adequate representation of the people of the
Niger Delta at the national level. Improved representation will improve allocation
of resources and revenues
Work with local representatives and international organizations to establish
working democracies at the state and local levels

Increased self-governance will reduce tensions as well as the incidence and

perception of political and economic oppression.
B. Environmental Restoration
In addition to ending violence in the region, multinational oil companies must rebuild
the Niger Delta by engaging in activities that both restore and preserve the natural
resources. They must begin by adhering to existing environmental standards.
There are several environmental standards and legislation in place, such as the
Mineral Oils Safety Regulations of 1963 (enacted as part of the Mineral Oils Act),
which effectively bind oil companies to respect international standards in their
operations in Nigeria [HRW]. Moreover, the Environmental Impact Assessment Act
of 1992 requires an environmental impact assessment (EIA) to be carried out where
the extent, nature or location of a proposed project or activity is such that it is likely
to significantly affect the environment.
But despite these regulations there has persisted a lack of enforcement to abide by
them or to perform adequate EIAs, by the agencies charged with supervision of
natural resource use, such as the Federal Environmental Protection Agency (FEPA)
and the Department of Petroleum Resources (DPR). An environmental survey on the
Niger Delta concluded, Most state and local government institutions involved in
environmental resource management lack funding, trained staff, technical expertise,
adequate information, analytical capability and other pre-requisites for implementing
comprehensive policies and programs. The study also found that shared mandates
and jurisdictions often lead to competition between agencies, thus rendering their
efforts ineffectual and counterproductive [HRW, ERM].
In the absence of effective and enforceable mandates from the Nigerian
government, oil companies must spearhead the development and implementation of
technologies and practices that will repair and prevent future damages to the
environment and people of the Delta.

1. Pollutants
The severe effects of long-term release of oil and other hydrocarbon pollutants into
the land, water and air need to be addressed promptly. Crude oil contains thousands
of different chemicals, many of them toxic and some known to be carcinogenic with
no determined safe threshold for human exposure. Oil companies must do the
following:
-

Cease illegal dumping of oil waste

o Create procedure for training workers in waste treatment and disposal
o Alert authorities to harmful substances released to the environment
o Prosecute employees and oil officials responsible for, or authorizing illegal
dumping
o Prepare annual reports of oil production by-products, accounting for all
input and output
Adhere to DPR regulations for cleaning up oil and chemical spills
o Consult independent supervisors to ensure that standards for prompt
rehabilitation of polluted soil and water are met
Upgrade facilities according to current standards. Replace leaky, corroded or
damaged pipelines and equipment
Install adequate facilities for treatment of oily or chemical waste
Conduct environmental impact assessment, according to the EIA Act, to
research solutions to problems identified by EIAs, prior to erecting new facilities.
Cancel projects if the problems cannot be resolved
Fund independent scientific research of the long term effects of hydrocarbon
pollution in the Niger Delta
Fund independent studies to quantify and publish the aggregate damages to the
ecological system (lands, fauna, flora) and human life due to hydrocarbon
pollutants
Cease burning of excess gas by flaring
o Improve processes for collecting gas
o Develop and deploy air-cleaning technologies for areas affected by years
of gas-flaring and other pollutants from oil production and refining
o Adhere to CO2 emission standards
Fund research to determine aggregate effect of gas flaring (quantify effects on
global warming, flooding, etc)

2. Health Education & Benefits

The indigenes of the Delta have suffered years of illnesses and deaths from pollutants,
and lack of adequate healthcare. The responsible oil companies have an obligation to:
-

Educate people about respiratory illnesses caused by air pollutants (released from
plants, gas flares, etc)
Educate people about poisoned freshwater fish and marine life

Support independent investigation on effects of effluent and oil waste on crops

and fish stock
Fund medical facilities and personnel to provide healthcare for the communities
affected by oil production
Provide clean drinking water

3. Natural Resource Conservation

In order to move toward environmental restoration, ensure land and wetland
conservation and to prevent further damages, multinationals must commit to:
-

Fund and aggressively pursue research of technologies for natural resource

recovery
Restrict activities to expand oil drilling and production
Develop and deploy neutralization technologies for treating polluted water
(swamps, creeks, rivers, lakes, etc)
Repopulate marine life
Develop and deploy land treatment technologies
Invest in renewable energy with the intent of scaling back oil production

C. Addressing Poverty
Multinational oil companies need to work with the local leadership and government
to end the extreme poverty that has persisted as a result of economic marginalization
of underrepresented ethnic groups in the Niger Delta.
In particular, oil companies should pressure and assist the government in providing
essential infrastructure and development for these indigenes, as return for the decades
of wealth and profit mined from their oil-rich wetlands.
1. Compensation
Multinationals can help improve the standard of living and provide solutions to the
long-term exploitation and repression of the Delta people in the following ways:
-

Hire independent claims investigators to determine disbursement recipients

Compensate the loss of life, health and livelihood
o Work with independent organizations to set up a system for disbursing
funds, medicine and aid
o Support and fund welfare system for the old, sick and disabled
o Honor claims for crops destroyed, damaged fisheries, loss of property and
other sources of income affected by the presence of oil companies
o Provide relocation compensation for property lost to oil-related
development
Provide resources for importing food at reduced cost in affected farming and
fishing communities
Initiate profit-sharing schemes for future oil ventures. According to a Shell study,
black-market trade makes oil theft lucrative, accruing an estimated $3.75 billion

annually [CDA]. A suitable profit-sharing program would make piracy less

attractive in comparison
o Allocate shares of oil corporations to oil-producing communities
o Represent indigenes on the board of oil companies
2. Community Building
There have been numerous reports by international human rights organizations,
activists and independent agents advocating programs by multinationals to stimulate
local industry and bring development to Delta communities. These recommendations
have included:
-

Working with local commerce groups and community leaders to develop new
economic initiatives and businesses to replace lost farming and fishing jobs
Providing trade-facilitating infrastructure such as roads and inexpensive public
transportation
Installing basic social amenities such as water and electricity
Working with international charities to donate necessities (clothing, toiletries, etc)
Providing communications infrastructure. Some proposals suggest extending oil
company private infrastructure (telephone/internet lines) and providing service at
reduced cost to oil-producing communities

3. Education and Employment

Education is an essential element of growth and development, as is the availability of
jobs and employable individuals. And to prepare the Delta people for participation in
the political and economic advancement of their communities, they must be equipped
with literacy and intellectual power. To that end, multinationals should take actions
such as:
-

Actively supporting improved public education systems by

o Donating school buildings and materials like computers and textbooks
o Funding training programs for teachers and administrators
o Working with international charities and religious groups to provide
supplies
Funding higher education scholarships for the youth to attend secondary schools
and universities
Providing formal job and trade training
Employing more indigenes for both skilled and unskilled labor

These types of programs will enable more Delta citizens to participate in and benefit from
the oil economy.

IV. Positive Development

In the preceding sections I have stressed the need for active involvement of the
multinational companies in developing their host communities for the purpose of
reparations, as well as economic and political stabilization in the interest of further
development.
In this section, I discuss programs initiated by various organizations to develop oilproducing communities as examples for multinationals operating the Niger Delta to
emulate.
A. Chinese in Africa
Since the establishment of the China-African Forum in 2000, China has committed to
extensive investment and joint development projects in Africa. Much of these
undertakings intended to increase the volume of trade between China and African
nations have been established through efforts that ensure egalitarianism for all parties.
This paradigm is effective as a consequence of the equal standing that the Chinese has
sought to promote, and is worthy of emulation by multinational oil companies
operating in the Niger-Delta in their dealings with the citizens of the oil-producing
communities. They must similarly seek to work together with Delta citizens in
community development.
1. Investment & Infrastructure
The Chinese government has been working with such countries as Ethiopia,
Mozambique, Nigeria, Zambia and Angola on infrastructure projects including
construction of transportation systems, power plants, telecommunications, and water
conservation projects [China2]. It has also engaged in joint investment projects in
manufacturing commodities such as electronics in countries like South Africa. These
joint ventures enhance the transfer of knowledge and technology and create
employment while financially benefiting the shareholders on both sides.
2. Resource Development
In the preamble establishing the China-Africa Forum, China pledged to encourage
its enterprises to take an active part in Africa's infrastructure projects and expand
cooperation in transportation, telecommunication, energy, water supply, electricity
and other fields [China]. The preamble also states:
China will, in the next three years, further increase
its financial contribution to the African Human Resources
Development Fund for the training of up to 10,000 African
personnel in different fields.
Since then China has set up an African Human Resources Development Fund for the
exclusive purpose of training African personnel. And as of 2003 China reported

having trained about 7,000 experts for Africa, including diplomats, doctors and
agricultural professionals. China had also sent 500 teachers, doctors and other experts
to several African countries, accepted more than 15,000 African students to study in
China, and provided more than 1,500 scholarships for African countries per year
[China2].
China has also partnered in agricultural development with countries like Tanzania and
Zambia to reclaim wasteland and resurrect crop-trading economies.
Multinational oil companies can study and engage in similar effective development
programs to benefit their host communities.
3. Health Aid
The Chinese have also provided healthcare and personnel to African nations by
funding research, dispatching teams on medical missions, providing free medicine,
medical instruments and materials, and training for African personnel. Aid also
includes medical services like sanitation quarantine, pharmaceutical inspection,
disease prevention, health care, and medical equipment maintenance [China2].
These are critical services that would particularly benefit regions such as the swampy
Niger Delta where diseases like malaria are prevalent, and similar programs should be
adopted by oil multinationals in those areas.
2. Renewable Energy
Another essential investment direction is in renewable energy sources to reduce
environmental pollution worldwide, as well as the pressure on oil-producing regions
and to prepare for a post-oil economy.
One example of realized conservation technology is Changing World Technologies,
Inc. (CWT)s Thermal Conversion Process. CWT funds the development of processes
that solve energy and environmental dilemmas.
1. Thermal Conversion Process
CWTs most outstanding and successful venture has been developing and deploying
its patented Thermal Conversion Process (TCP). TCP technology replicates natures
geothermal processes by utilizing water, heat and pressure to reform industrial and
agricultural by-products into oils, gases, specialty chemicals, carbons and fertilizer
[CWT].
By accelerating natural geological processes the CWT process can potentially enable
independence from fossil fuels and help preserve the environment. When applied to
food waste, products of the TCP process typically consists of 75% oil, 15% fuel-gas
and 10% carbon and minerals by mass. The process involves:

Mixing the organic and inorganic materials with water

Releasing the gases from the initial reaction by turning the mix in lower pressure
Separating oils from gases by heating the oily substance and evaporating water
Heating the mixture to its reaction temperature
Separating solids from volatile chemicals with a reformer reactor
Separating and storing light oils and gases

The oil from TCP is the same species found in petroleum-derived fuels. According to
CWT, the fuel from TCP does not have the typical solubility problems of bio-diesel
and other fuel alternatives. TCP transforms animal and vegetable fats into
hydrocarbons that have 20 or fewer carbon atoms resulting in a more complete
combustion, reducing particulate emissions, thereby mitigating air pollution
potential [CWT].
2. Production Factors
According CWT estimates, operational plants can be constructed within a year and do
not require permits, because the TCP process and related technologies do not emit any
waste by-products and exclude any combustive processes. Types of waste that can be
converted to fuel include food or agricultural products, automotive parts such as tires,
plastics, and municipal waste.
CWT is credited with launching the worlds first commercial-scale TCP plant through
its subsidiary Renewable Environmental Solutions, LLC (RES). RES was
incorporated to commercialize TCP technology in the agricultural and food
industries.[CWT]. Located in Missouri, the plants facilities includes a production &
raw materials receiving area, a process area where TCP is applied, a coker area, raw
materials storage, and produced water area.
The TCP process is also rated as cost-competitive with other oil-producing methods,
particularly for small to medium exploration and production companies. Oil
companies should fund extension of such technologies for larger scale production.
3. Self-Sustaining Technology
RES estimates that at full capacity, the Missouri plant can convert 200 tons of organic
and agricultural waste per day into energy and industrial products. This translates to
approximately 500 barrels of oil per day, as well as natural gas, liquid and solid
fertilizer, and solid carbon.
In addition to converting hydrocarbon and organic waste into useful fuels and
chemicals, CWTs TCP is environment-friend. By recycling surface carbons into fuel,
fertilizer and other raw materials, natural carbon deposits underground are preserved
from mining. As a consequence less CO2 is released to the atmosphere, helping to
curb global warming.

The TCP process is also efficient and self-fueling. CWT estimates that for every 100
BTUs available in agricultural waste product, 15-20 BTUs are needed to supply
energy to the plant and the remaining BTUs will be converted to marketable fuel, .i.e.
the TCP achieves 80% efficiency.
These salient characteristics make the TCP technology an excellent candidate for
further development and deployment by oil companies.

V.

Conclusion

This paper examines the role of multinational oil corporations in the Niger Delta, in
particular, the long-term effects of their presence on the indigenes of oil-rich region and
their habitat. The critical problems of corruption, conflict, human rights violations,
natural resource depletion and pollution, extreme poverty, and stifling lack of socioeconomic development in the Delta are long overdue for eradication. And as a result of
their status as major players and dominant contributors to these problems, oil companies
must spearhead efforts to rectify the situation in cooperation with citizens of their host
communities.
I have presented several recommendations for mitigating the plaguing issues, in
accordance with guidelines from international NGOs such as the Human Rights Watch
and the Environmental Rights Action groups. These recommendations include reforming
security policies, improving the mediation processes with and within the communities,
pushing for judicial reform, investing in environmental research, contributing to human
resource development by providing employment and education, and engaging in
development projects to promote health, stimulate economic growth and eliminate
poverty.
Lastly, I discuss effective development programs that oil companies can emulate to bring
progress and restoration to oil-producing communities and to civilization at large.
The first example is the China-Africa Forum set up to foster joint investment and
increase trade between the two sides. Outcome from this union has included contracts for
infrastructure in several African nations, joint ventures in areas such as agriculture and
electronics, transfer of expertise and training of thousands of African professionals, and
provision of medical care and Chinese medical personnel to 35 African nations.
Multinational oil companies should engage in similar programs in the Niger Delta to help
compensate decades of massive exploitation.
The second example is the development of a renewable energy technology by Changing
World Technologies, Inc. CWTs Thermal Conversion Process is a self-sustaining, costeffective process that converts hydrocarbon and organic waste into oil, gas, carbon and
minerals. Oil corporations should invest in large-scale deployment of such technologies
and programs to provide alternatives to fossil fuels and slow the march toward global
environmental collapse.

News & References

[Vanguard] Igbikiowubo, Hector. Vanguard: Just 1% of Nigeria' s population gets 80%
oil/gas revenue World Bank. October 26, 2004
[EIA] Energy Information Administration: Country Analysis Briefs. 2005.
[NIPC] OIL AND GAS: Major Industry Policies.
[CIA] CIAS World Fact Book
Obasi, N.K. Foreign Participation In The Nigerian Oil and Gas Industry. 1998.
[CDA] Althaus, Dudley. HIGH COST OF ENERGY: NIGERIA. Houston Chronicle,
2004.
[TO] Community Defence Law Foundation
Simon Amaduobogha Interview: http://www.truthout.org/issues_05/031605EA.shtml
[CDD] Okonta, Ike. The Lingering Crises in Nigerias Niger Delta and Suggestions for a
Peaceful Resolution. CDD; March 2000
[ERA] Environmental Rights Action [ERA] Condemns EXXON/MOBIL'S
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[HRW] THE PRICE OF OIL: Corporate Responsibility and Human Rights Violations in
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[EIA] Environmental Impact Assessment Decree, Decree No. 86 of 1992, section 2(2).
[ERM] Environmental Resources Managers Ltd, Niger Delta Environmental Survey Final
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[OSI] Effect of Nigerian Spill Termed Minimal as Last Known Patch Disperses, Oil
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Environmental Resources Managers Ltd, Niger Delta Environmental Survey Final Report
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[BBC] BBC News UK
Oil giant admits Nigeria aid woes
Extra troops for Nigeria oil town
Amnesty. Huge Nigeria delta toll
Odunfa, Sola. Nigeria's oil capital under siege

[CEAR] Adenikinju, Adeola. Resource Ownership, Human Development and Economic

Growth. Conference on Sustainable Development: Resource Ownership in Nigeria by
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[China] Preamble: FORUM ON CHINA-AFRICA COOPERATION - ADDIS ABABA
ACTION PLAN. December 2003.
[China2] China-Africa Cooperation Forum
[CWT] Changing the World Technologies, Inc.
http://www.changingworldtech.com/who/index.asp