Oil Industry of Nigeria is in Trouble

Nigeria, officially the Federal Republic of Nigeria, is a country in West Africa and the most populous country in Africa. Nigeria shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast lies on the Gulf of Guinea in the south. Since 1991, its capital has been the centrally-located city of Abuja; previously, the Nigerian government was headquartered in the coastal city Lagos. The people of Nigeria have an extensive history, and archaeological evidence shows that human habitation of the area dates back to at least 9000 BC.  The Benue-Cross River area is thought to be the original homeland of the Bantu migrants who spread across most of central and southern Africa in waves between the 1st millennium BC and the 2nd millennium AD.

Nigeria gained its independence on October 1, 1960 from the United Kingdom, and now consists of 36 states and the federal capital territory. Nigeria re-achieved democracy in 1999 after a sixteen-year interruption; from 1966 until 1999, Nigeria had been ruled (except the short-lived second republic, 1979-1983) by military dictators who seized power in coups d'état and counter-coups during the Nigerian military juntas of 1966-1979 and 1983-1998 (1). Like in many other African societies, Prebendalism and corruption continue to constitute major challenges to Nigeria, as vote rigging and other means of coercion are practiced by all major parties in order to remain competitive. In 1983, it was adjudged by the policy institute at Kuru that only the 1959 and 1979 elections witnessed minimal rigging. It means that others were rigged.

Nigeria is world’s eigth largest oil exporting country and is a typical African country plagued by internal troubles, unrest and militancy that is the hall mark of today’s African nations. It suffered long spells of coups, counter coups and military dictatorships and unrest. It suffers illiteracy and poverty like every African nation. Gunmen kidnapped about 20 foreign oil workers in three separate attacks in Nigeria’s delta region recently and released several of them hours later, in the second important hostage-taking crisis this week Oil industry security sources in Nigeria had over the past week or two been stepping up warnings of possible attacks. Security sources however said the industry was preparing itself for further attacks. Movement for the Emancipation of the Niger Delta (MEND) that is a militant outfit has resorted to these acts of kidnappings and blackmailing tactics. In the latest act of kidnappings, the militant outfit kidnapped three Indians in Southern Nigeria after dynamiting front gate of a residential compound on May 19, 2007. One Nigerian died. However security forces intervened before another seven Indians were about to be taken away captives. It is not that only Indians are being kidnapped (2). Others too are falling victims to the unrest in the beleaguered country.

Many of the armed groups in the delta owe their origin to the 2003 elections, when politicians armed them as local strongmen to rig votes and dominate local politics. Umaru Yar’Adua, Nigeria’s president elect, has said he hopes to implement a Marshall Plan for the delta to solve its chronic poverty levels and cool down militant groups. But security people say the only strategy employed by Mr Yar’Adua, whose running mate is from the delta, is to make constant cash pay-outs to keep a lid on simmering militancy that is threatening the country. MEND’s self-styled leader, who calls himself Jomo Gbomo, said earlier this week that the attacks were an attempt to show his opposition to Nigeria’s ruling People’s Democratic Party (PDP), which won a landslide victory in last month’s tainted national elections (3). Jomo Gbomo, who claims to be a spokesman for MEND, detailed his group's demands: 1.5 billion dollars from Shell as compensation for environmental damage, the release of an imprisoned rebel leader and the withdrawal of foreign oil firms from the Niger Delta. 'Our resouces have been stolen for the last 50 years. We finally want to take control of the wealth of our country,' Jomo wrote. In December MEND threatened to shoot three Italians being held by rebels. Oil firm Agrip swiftly denied claims that it had offered a high ransom. MEND has indicated that it wants a political solution to the crisis in the delta. 'We shall kill the hostages to make it clear that we are not young and dumb and chasing after large sums of money. When you visit the delta, you'll understand how easy it is here for a person to become an animal,' Jomo wrote.

For as long as oil has been produced in the Niger Delta, there have been crises. But in the last year the situation has intensified considerably, with attacks on oil installations and the sabotage of pipelines accumulating. Increasingly, however, oil industry workers are being targeted in kidnappings. Oil industry worker Juergen Hoffmann (not his real name) states, 'The oil spoiled people here. Kidnapped whites bring money and once ransom is paid, new desires are awakened,' he says.

In the last year, 72 foreigners, among them four Germans, and 56 Nigerians were kidnapped. Just three months into this year, already 57 foreigners and 10 Nigerians have been held by kidnappers, while at least 15 people have been killed. The fundamental problem of the delta is often highlighted and deplored. The region that provides for the wealth of the country has a population that endures bitter poverty. Most villagers live without electricity, clean drinking water and enough schools, hospitals or infrastructure. Before the crisis, the country produced 2.4 million barrels a day and has the capacity to produce up to 4 million barrels a day by 2010, a source of pride for the government. Nigerian oil is sought after since it is relatively effortless to produce and has low sulphur content, making it easy to refine.

It is a fact that the oil firms have so far exploited the Niger Delta without caring for its inhabitants. The various 'projects' they've undertaken for the benefit of the people, have made very little difference. The roads built by oil firms are primarily meant for their own production plants. Environmental groups point out that the Nigerian government is partly to blame. It takes 95 per cent of the revenue from oil and gas - half of which flows to federal states and some 13 per cent to the Niger Delta where governors have received six billion dollars in the last year and of which virtually nothing has trickled to the population. 'Corruption is the real problem in Niger Delta,' says Nnamdi Obasi of the International Crisis Group. Although the region has received more money than in previous years, most 'has disappeared into the pockets of corrupt' officials, he explains (4)

Nigeria remains plagued by appalling poverty despite being the world's eighth largest oil producer and the largest in Africa and fifth exporter to USA. Oil industry made no difference to the lives of local population and poverty and unemployment in no way has been reduced.. Rampant corruption has made things more difficult. These are the main reasons for the present crisis. The kidnappings of the workers of oil industry are adversely affecting the production and the reputation of the country. Although the president of the country promises all help and assistance in controlling the menace, the credibility of the country and administration is adversely affected at international forums while innocent workers are also loosing lives and are also under great threat from the armed kidnappers. For them, these kidnappings have become good business. Thus oil industry in Nigeria is under severe crisis ad unlesste government comes down heavily on these robbers and kidnappers apart from improving the lives of local population, the industry would face shortage of workforce in very near future further adversely affecting the industry.

Bibliography

1.Nigeria-Wikipedia, http://72.14.235.104/search?q=cache:Lb054aBa7xgJ:en.wikipedia.org

/wiki/Nigeria+wikipedia+on+Nigeria&hl=en&ct=clnk&cd=1&gl=in&client=firefox-a

2. Gunmen kidnap 3 Indians in Nigeria, Deccan Chronicle, Hyderabad, AP, India, Date May 20, 2007, PP1

3. Dino Mahtani in Lagos, Kidnappings in Nigeria follow rigged poll, Published: May 3 2007 23:35 | Last updated: May 3 2007 23:35 http://72.14.235.104/search?q=cache:4re9bg7-4-kJ:www.ft.com

/cms/s/139fede4-f99e-11db-9b6b-000b5df10621.html+Kidnappings+in+nigeria&hl=en&ct=clnk&cd=5&gl=in&client=firefox-a

4. By Ulrike Koltermann Apr 17, 2007, 14:14 GMT, Kidnappings threaten Nigeria's oil industry, http://72.14.235.104/search?q=cache:PZz6JNC1zBgJ:news.monstersandcritics.com/energywatch/oilandgas/features

/article_1290481.php/Kidnappings_threaten_Nigerias_oil_industry+kidnappings+in+Nigeria&hl=en&ct=clnk&cd=8&gl=in

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