Oil Inferno

January 3, 2007

By Michael Watts

Ryzard Kapucinski, the great Polish journalist, once wrote that 'oil is a fairy tale and like every fairy tale a bit of a lie'. The terrifying oil explosion that engulfed a Lagos neighborhood following Christmas Day--the current death toll is almost 300--says less about vandals who hot-tap the exposed pipelines running through the city's abject slum world than the venality, waste and corruption of a Nigerian petro-capitalism fuelled by windfall profits and modernity's addiction to the automobile. The horrific pictures of charred human carcasses being dragged from the burned-over wreckage of the Awori area of Abule Egba, a suburb of Lagos, is a bleak testimony to the total failure--the great lie--of secular national development in post-colonial Nigeria. The spectacle of an oil nation in which desperate poor city dwellers scramble to scoop petrol and kerosene from ruptured or tapped pipelines stands at the heart of the abject failure of many oil states, what Stanford political scientist Terry Karl calls 'the paradox of plenty'.

Nigeria produces over 2 million barrels of oil a day (currently valued at roughly $40 billion per year) which accounts for 90% of its export earnings and 80% of government revenue. Nigeria also supplies 9% of US imports and is the pillar in the US post 9/11 African oil strategy of the Bush administration which anticipates that the Gulf of Guinea will provide perhaps 25% of US imports by 2015. A multi-billion dollar oil industry is however a mixed blessing at best, and for most Nigerians nothing more than a fairy tail gone awfully wrong. To inventory the 'achievements' of Nigerian oil development is a salutary exercise: 85 percent of oil revenues accrue to 1 percent of the population; over three decades perhaps one quarter of $400 billion in oil; revenues have simply disappeared; between 1970 and 2000 in Nigeria, the number of people subsisting on less than one dollar a day grew from 36 percent to more than 70 percent, from 19 million to a staggering 90 million. According to the International Monetary Fund, oil 'did not seem to add to the standard of living' and 'could have contributed to a decline in the standard of living'. The anti-corruption chief Nuhu Ribadu (one of the few bright lights on a dark political landscape), claimed that in 2003 70% of the country's oil wealth was stolen or wasted; by 2005 it was 'only' 40%. Over the period 1965-2004, the per capital income fell from $250 to $212 while income distribution deteriorated markedly. Since 1990 GDP per capita and life expectancy have, according to World Bank estimates, both fallen. This isn't pretty.

What, then, is the real story behind the horrors of Abule Egba? Let's begin with the fact that in the days before the explosion, fuel was almost impossible to find in Lagos and other cities across the country. Massive lines at gas stations during the holiday period were in large measure the produce of a hugely inefficient and corrupt local refining industry that functions, if at all, well below capacity. The brutal reality of life in the Nigerian petro-state is that fuel for everyday use is one of the country's scarcest commodities.

What might strike the American reader as a bizarre, and potentially deadly, popular livelihood strategy, namely oil theft, exposes the rank underbelly of Nigerian development. The poor quality of oil pipeline infrastructure and their close proximity to human habitation has long been a matter of concern for Nigerian activities and communities in the oil producing and consuming regions. In fact the recent Lagos disaster is business as usual. In 2003 I visited the remains of a church in Okrika, in the heart of the oil-producing Niger delta region, which had been incinerated by a pipeline explosion during a Sunday-morning service. Overall, the picture is one of massive irresponsibility and complacency by the Nigerian National Petroleum Company (NNPC) which has responsibility for most of the pipeline infrastructure, and a dismal lack of leadership and political will from Abuja, the federal capital.

Since the late 1990s, there have been at least major ten explosions and at least 2000 deaths associated with punctured and vanadalized pipelines. In 1998 over 1000 persons died in Jesse; more than 300 were burned alive in Warri in 2000. There have been at least three huge fires in Lagos alone since late 2004, the most recent on May 12th 2006. Countless other smaller events rarely reach the pages of the Nigerian press. The announcement by President Obasanjo that he has only now approved the NNPC plan to re-lay 5000 kilometers of pipelines underground can only be met with amazement--and the deepest of cynicism.

There are at least two important facets of the Awori story. One is what it says of the vast Nigerian slum world of which Lagos is part. By some estimations Lagos has a population of seventeen millions. Mike Davis in his extraordinary new book Planet of the Slums reminds us that perhaps eighty to ninety per cent of the rapidly growing population of African cities--Lagos is forty times larger than it was in 1950--are barracked in slums, a Dickensian nightmare of squalor, poverty and disease. The slum world of Lagos defies description, in part because its operations remain a mystery. In Ajegunle, one of its vast swamp shanty towns, perhaps 1.5 million people inhabit eight square kilometers. In a recent New Yorker article, George Packer describe the city as a burning garbage heap, populated by armies of scavengers that are superfluous and ultimately disposable. It is no wonder that Governor Bola Tinubu of Lagos saw in the charred remains of Abule Egba, 'the shame of our nation'.

And what of the vandalization of the pipelines and the theft of oil? The women and children who gathered around the punctured pipeline were almost certainly bit players. The pipe had been tapped on Christmas Eve and by the early morning there were widespread reports of two fuel tankers being filled in the presence of local police. Oil theft--referred to locally as 'bunkering'--is a very large and well organized business in Nigeria. By some estimations perhaps 10-15% of Nigerian oil is stolen by so-called oil syndicates. The impoverished Lagosians who scoop fuel into jerry cans are low-level feeders in a vast ecosystem of crime that reaches to the very highest levels of government and military, and involves the complicity of the transnational oil majors. Across the Niger Delta oil fields well-connected military and government officials have made use of disenfranchised and unemployed youth groups to orchestrate the tapping of major pipelines and to run the oil barges through the tangle of creeks in the Delta to offshore loading stations--all under the watchful eye of the Nigerian navy and coast guard. At present prices, this oil mafia controls a black economy worth billions of dollars annually.

Yet the bunkering business has radically backfired. Angry youth groups, many from marginalized ethnic minorities across the Niger Delta largely excluded from the federal oil revenue allocation process, have gained control of important sections of the oil theft trade. Bunkering finances the purchase of large caches of weapons for what has become a series of armed insurgences across the oilfields. The movement for resource control and self-determination that sprang to life in the late 1980's in the non-violent movement of Ken Saro-Wiwa and the Ogoni people, by the late 1990s had morphed into a series of militias­ the Niger Delta Vigilante, The Niger Delta Peoples Volunteer Force--for whom the slick alliance of a corrupt oil state and unaccountable transnational oil companies became the object of an armed and increasingly violent struggle. Many of these insurgents began life as political thugs hired by oil-fuelled politicians in the elections of 1999 and 2003 but their insertion into the bunkering trade has granted them a political autonomy and a military capability to conduct a guerilla war in the swamps and creeks of the Niger Delta.

In late 2005 a hitherto unknown militia--the Movement for the Emancipation of the Niger Delta [MEND]--took a number of oil worker hostages and subsequently mounted massive attacks on oil infrastructures owned by Chevron, Agip, Shell and the Nigerian national oil company. By late 2006 MEND has grown increasingly more brazen to the point where some companies have commenced the evacuation of expatriate staff. The turbulence on the Nigerian oilfields date back to the 1990's and escalated dramatically at the time that President Obasanjo came to power in 1999. The national oil company estimates that between 1998 and 2003, there were four hundred vandalizations on company facilities each year. In seven years the insurgencies and conflicts have cost the government $6.8 billion in lost oil revenue.

The Niger Delta is now almost ungovernable. In a 2005 report, Amnesty International concluded that the Nigerian security forces still operate with impunity. The government, they claim, has failed to protect communities in oil producing areas while providing security to the oil industry. The terrible conditions across the delta are compounded by the policies of the transnational oil companies who have finally acknowledged that their practices of community development and 'cash payments' have made the situation worse. In June 2004, the leak of an internally commissioned Shell Nigeria report revealed the company's direct contribution to corrupt practices and inter-community violence which has eroded what they call their 'license to operate.'

In the ashes of the Lagos inferno lies a much darker story of state corruption, corporate power and a growing oil insurgency, all framed by the existence of endemic poverty amidst oil wealth. As Nigeria prepares for the elections of April 2007, the grave danger is that buoyant oil prices will fund a huge electoral war chest for politicians only too willing to deploy restive youth and angry insurgents for their own political purposes.

In the background stands the US military. According to General James Jones, in testimony offered to the Senate Armed Services Committee in 2005, the new objective in Africa "should be to eliminate ungoverned areas, to counter extremism, and to end conflict and reduce the chronic instability" because of Africa's "potential to become the next front in the Global War on Terrorism." At a May 2006 African Seapower Conference in Abuja. Admiral Harry Ulrich, EUCOM's Commander of US Naval Forces Europe and Africa in referring to Shell's Bonga oil field --Nigeria's largest oil field, costing $3.6 billion to develop and lying within Nigeria's territorial waters--admitted that American ships were patrolling Nigerian oil fields within the 200 mile limit: "We are concerned for Nigeria and we want to help her protect the region from the hands of the maritime criminal..the US and any good nation want a safe coast for countries who are supplying their energy and that is why we are often there. So there is nothing to fear for Nigeria". Against a backdrop of spiraling militancy across the Delta, US interests have met up with European strategic concerns in the region and have established the Gulf of Guinea Energy Security Strategy.

By December, 2005 the American ambassador and the Managing Director of Nigerian National Petroleum Corporation agreed to establish four special committees to co-ordinate action against trafficking in small arms in the Niger Delta, bolster maritime and coastal security in the region, promote community development and poverty reduction, and combat money laundering and other financial crimes. The oil majors facing shut in of up to 500,000 barrels per day are inevitably concerned. A senior maritime analyst at the U.S. Office of Naval Research, revealed to participants at March 2006 conference at Fort Lauderdale "Shell led a group of oil companies in an approach to the US military for protection of their facilities in the Delta," and warned that "Nigeria may have lost the ability to control the situation." It is a perfect storm of oil-lubricated conflict. An oil inferno of another sort.


Interested readers might want to look at a new International Policy Report (2007) published by the Centre for International Policy in Washington DC by Paul Lubeck, Ronnie Lipschitz and myself which discusses the militarization of the Gulf of Guinea. The report is entitled "Convergent Interests: US Energy Security and the "Securing" of Nigerian Democracy" .


Michael Watts is Director of Centre for African Studies, University of California, Berkeley