Nigeria, The Corrupt Political System In Deals With Multinational Oil Companies

Oil spill in Nigeria, a threat to health and the environment?

By Johan Van Dongen

The Nigeria Report: ‘A Cesspool of Corruption and Crime in the Niger Delta,’ isn’t difficult to find. This report is already written by Horand Knaup in ‘Der Spiegel On-Line,’ which speaks for itself.

After my discussion with author Fabestine Providence, the head of Fabestine Providence Nigeria Limited, I’m compelled to finding out the connection between Dutch Shell Company and the corrupt Nigerian regime.

The words of Providence on how corrupt a country can be, become a reality, after reading the article of Horand Knaup. Yes, the African continent houses many corrupt regimes, as writer Joel Savage and I found out about corrupt African leaders, enabling us to write many articles on this issue affecting the development of Africa.

Fabestine Providence said: “The activities of the corrupt authorities are deep than you can write about.” His words are still fresh in my mind. Frankly speaking, the corrupt nature of many African leaders is destroying Africa, including those that have collaborated with the Shell company.

It is a fact that most Nigerian authorities are paid by every multinational company involved with Nigeria. They can’t act otherwise. Fabestine Providence wants someone who can write a script for a movie about Nigeria’s underworld, for the common suffering Nigerians to understand how the underworld operates and get finances from lots of sources in the country.

This information may be kept by the Nigerian government as confidential, but it is already in the virtual clouds because the leaked US diplomatic cables revealed just what multinational oil companies are up against in the Niger Delta. 

Security forces are ineffective, involved in dubious oil deals and the government demands millions in bribes.

Even university students have earned pocket money by working as kidnappers because the kidnap industry employs students during university vacations.

Bombs are used against civilians and millions paid to corrupt officials. The US diplomatic cables from the Nigerian cities of Abuja and Lagos, paint an unusual bleak picture of the situation in the oil-rich Niger Delta.

Hardly any of the international oil companies active in the delta publishes production figures, kidnappings and hostage-taking, yet these are a daily occurrence issue, while the civilian population is suffering, even though they have got nothing to do with the government’s corrupt schemes.

The central government in Abuja has neglected the delta for decades. It has failed to build schools, hospitals, and roads and has simply ignored the serious environmental problems. All that mattered was that the oil kept flowing, and continued to produce kickbacks for the political elite.

“The Federal Government has not funded one road in the key Niger Delta States in the last ten years” reads one of the cable massages in February 2009, from the US Consulate in Lagos, citing a high-ranking politician which could be Babatunde Fashola. In the face of such neglect, organized crime has become rampant in the delta.

There are kidnappers who are in bed with the authorities and special military units that sometimes fight rebels in the delta and frequently have a stake in the oil business. 

The rebels, although staged attacks on the multinational oil companies, they also sell oil and enjoy police protection. The political elite thrives on the chaotic situation.

Students don’t only involve in kidnap but attack oil platforms, but also guard hostages. The same rebel oil traders managed to get Fabestine Providence out of the country. Even inside the Black Axe Movement is corruption. The students earn $1,071 for a three-month period vacation.

However, with the Joint Task Force, an army unit pressing them, the job is no longer glamorous but dangerous. Companies that drill oil in Nigeria needs to have strong nerves. 

It is hard to obtain reliable information and rumours circulate wildly. Do the rebels who are targeting the multinationals’ production efforts, really have anti-aircraft missiles to shoot down companies’ helicopters, as one message describes? 

Is the Russian energy giant ‘Gazprom’ planning to get into the natural gas business in the country? Another important question is which investors might be participating in a gas pipeline across the Sahara to Algeria?

The 4,000-kilometer pipeline to the Mediterranean coast would likely cost at least €10 billion. According to one cable, the multinationals ‘Total and Gazprom’ are interested in the project. 

The head of Exxon Mobil in Nigeria, however, dismissed the pipeline project as “fantasy,” that would never become a reality because the pipeline is too expensive and politically too risky. Above all, it would not benefit Nigeria and of course, it will not be surprised that the Dutch Shell Group is involved in corruption.

There are bitter complaints coming from Western oil companies. At a meeting with the US – Africa envoy, Johnnie Carson, oil executives criticized the “amateur technocrats” who are in charge of the oil and gas business on the Nigerian side. The managers said that Nigerian politicians believe that deep-sea drilling would earn them no money. 

Partners from banks and the business world did not understand the business, they said. The government in Abuja had collected $2.5 billion dollars in revenue over the previous two years but had not made any investments in return.

At another meeting, an Exxon Mobil manager reported that companies had to calculate for a loss of around 40% for oil transport via overland pipelines in the country; a result of oil theft. 

‘It was more efficient to import refined oil from Europe than to process it in Nigeria itself’, he said. The police charged with protecting the pipelines seemed primarily concerned with coordinating the pilfering and letting potential thieves know where they could steal the oil.

One dispatch from Washington reads: “Nigeria’s four state-owned refineries have an installed capacity of 445,000 barrels per day. They have a history of fire, sabotage, poor management, lack of turn-around maintenance and corruption. These elements have limited refinery output to 40 percent of capacity or less.”

In January 2009, one oil executive complained that the already bad situation had gotten worse. Widespread attacks by pirates had led to tanker shipping companies only accepting contracts under certain conditions. Nigerian government officials apparently responded by telling her: “Hire more security.”

What about the Israeli Involvement? Another oil company protested that high-ranking Nigerians demanded millions in bribes for rights to load tankers. In addition, a top Nigerian prosecutor told a visitor that; “He would sign a document only if the visitor paid $2 million immediately and another $18 million the next day.”

The Nigerian government finds deals involved with multinational companies unique in the oil industry. A report dated March 2009 states that: “Shell and Total recently revealed that they were forced to loan their Nigerian partners billions of dollars, below-market rates to support ongoing joint venture operations.”

An oil spill in the Delta State of Nigeria and the threat of  environmental health hazards

US diplomats also referred to a complaint from one of the oil multinational companies, about the Nigerian Navy, which the complaint said, was totally incapable of protecting oil companies in the delta. 

When rebels attacked an oil platform in the Gulf of Guinea with a total of six-speed boats, Shell employees sounded the alarm at 2:30 a.m. It was only at 7:30 p.m after the attackers had long disappeared that naval boats arrived and their primary aim was to obtain supplies of fuel and food from the platform.

Here and there, however, improvements have been reported. Israeli security experts in the Nigerian state of Bayelsa were now going to keep the kidnapper gangs at bay. 

One dispatch reads: In fact, US diplomats write, the Israelis are remarkably active in the Niger Delta. The Israeli military provides equipment and training to the Nigerian special unit that fights rebels in the delta. Back in October 2007, the unit lacked functioning helicopters and armored troop carriers and only had two gunboats.

Now it has more than a hundred vehicles, around two dozen boats and two helicopters at its disposal. There is apparently one small problem, some members of the unit are deeply involved in dubious oil deals. Thanks to Horand Knaup, for all this information, even though it is now known publicly.

I feel more pain and helpless over the situation of Fabestine Providence, as an asylum seeker in the Netherlands, but the Dutch government wouldn’t like to keep him in the country, despite knowing the roots of his problem, since they are part of the corruption and environmental hazard in the Delta of Nigeria.