nigerian oil

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Nigerias Oil Economy

A case study in politicalecology


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Contrasts

Wealth in Natural ResourcesNigeria is ranked number 11 among the worlds oil

producing statesProduction = 2.6 million barrels per day in 2005

At $55 a barrel, thats $143 million a day, or $52 billion/yr.

Poverty of Local PopulationGNI per capita: $390 (US over $40,000, Mexico is about

$10,000)

more than 70% of the Nigerian population lives inpoverty

Where does the money go?


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Demographic indicators

Life expectancy: 46 yrs. (versus 78 in theUS)

Infant mortality rate: 183 per thousand in

the first 5 years (versus 8 in the US)Health expenditures per capita $8/yr.

(versus $4,500 in the US)

TFR: 5.2 (versus 2.1 in the US)Percent of population under 15 yrs. of age:

44% (versus 21% in the US)


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A growth industry


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Who Profits?

Nigerian National Petroleum Company (NNPC)Up to 80 percent of these revenues accrue to 1% of the

Nigerian population (www.eia.doe.gov)

Transnational Oil Corporations drilling in NigeriaShell

ExxonMobil

ChevronTexaco

Total


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Oil Company Revenues (global)

Shell: $18.2 billion net income ($10 billionin dividends paid to shareholders lastyear)

ExxonMobil: $25.3 billion net income ($15billion paid to shareholders in dividendsand buybacks)

ChevronTexaco: $13.3 billion net income

Total: $8.8 billion


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Shareholders in TotalOil

(by country of residence)

Other oil companies wouldshow similar investment

profiles with regard to theWest versus the rest


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Impacts on the Landscape


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Bonny Island LNG plant (Shell)


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Environmental Impacts

Environmental problems associated with oil-related activities arenumerous. For example, in shipping ports, where the transshipmentof oil takes place, the chronic release of oil into the water throughship leakage, ship maintenance or mishandling is a continuingdilemma. This problem is often ignored, despite the fact that itscumulative effects may have significant effects on the surrounding

ecosystem. Natural habitats, such as seabeds, wetlands andmudlands, which are increasingly recognized as fundamentalelements of a country's natural environment and economic resourcebase, are often located near or in maritime port locations.(www.eia.doe.gov)

Despite its recent success, the [Chad-Cameroon pipeline] project

has been the target of vehement protests from environmental andhuman rights groups, which argue that the project would harmwildlife (black rhinos, chimpanzees, gorillas and elephants) in therainforests which the pipeline would pass through, dislocateinhabitants along the pipeline route, and further increase civil strifethrough profiteering by local officials. (www.eia.doe.gov)
http://www.eia.doe.gov/http://www.eia.doe.gov/http://www.eia.doe.gov/http://www.eia.doe.gov/


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Social Impacts

Violence kidnappings, explosions at oil theft sites, equipment destruction,

intertribal conflict over damage compensation, assassination ofnonviolent protesters by government forces

Oppression

layoffs of striking workers life imprisonment for vandalizing oil company property

Corporate corruption: Nigeria's Economic and Financial Crimes Commission (EFCC)

began to investigate allegations of tax evasion by multinational

oil companies in collusion with government officials. In February 2005, the Nigerian government began aninvestigation into the illegal existence of 193 unlicensed airstripsand helipads operated by large multinational oil companies.

source: www.eia.doe.gov
http://www.eia.doe.gov/http://www.eia.doe.gov/


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Social Impacts

The president faces the daunting task of rebuilding apetroleum-based economy, whose revenues have beensquandered through corruption and mismanagement, (CIA World Factbook)

NNPC estimates that from January 2004 to September2004, 581 cases of pipeline vandalism were recorded. InDecember 2004, an explosion at a petroleum productspipeline in Ilado attributed to pipeline vandals resulted inthe death of 26 people. As a result of frequent attacks on

oil and electricity infrastructure, the Nigerian LegislativeCommittee proposed an anti-vandalism law in December2004, outlining penalties including life imprisonment forthe crime. (www.eia.doe.gov)
http://www.eia.doe.gov/http://www.eia.doe.gov/


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Pipeline fires

Whos to blame?

Vandals?

Oil companies?

The Nigerian

government?

the global economicsystem?


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Theft?

theft:a: the act of stealing; b: an unlawful taking (as

by embezzlement or burglary) of property

There are no laws to define naturalresources as property of the localresidents at the global level!

Resources in effect belong to whoever hasthe money to extract them and pay off thelocal government!


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Overall Implications

Large companies Based in rich countries Extract resources from poor countries

Using investment money from rich countriesAnd profiting investors in rich countries,While imposing environmental costs on the

ordinary people of poor countries

And buying the cooperation of tiny ruling sectors(oligarchies) in the poor countriesWho maintain control over the resources and

land by using weapons bought from the richcountries


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The personal side we dont often see


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nigerian oil

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