Nigeria’s Oil EconomyNigeria’s Oil Economy

A case study in political A case study in political ecologyecology

Contrasts

Wealth in Natural ResourcesNigeria is ranked number 11 among the world’s oil

producing statesProduction = 2.6 million barrels per day in 2005At $55 a barrel, that’s $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 in

povertyWhere does the money go?

Demographic indicators

Life expectancy: 46 yrs. (versus 78 in the US)

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)

A growth industry

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

Oil Company Revenues (global)

Shell: $18.2 billion net income ($10 billion in dividends paid to shareholders last year)

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

ChevronTexaco: $13.3 billion net incomeTotal: $8.8 billion

Shareholders in Total Oil

(by country of residence)

Other oil companies would show similar investment profiles with regard to “the West versus the rest”

Impacts on the Landscape

Bonny Island LNG plant (Shell)

Environmental Impacts

“Environmental problems associated with oil-related activities are numerous. For example, in shipping ports, where the transshipment of oil takes place, the chronic release of oil into the water through ship leakage, ship maintenance or mishandling is a continuing dilemma. This problem is often ignored, despite the fact that its cumulative effects may have significant effects on the surrounding ecosystem. Natural habitats, such as seabeds, wetlands and mudlands, which are increasingly recognized as fundamental elements of a country's natural environment and economic resource base, 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 and human rights groups, which argue that the project would harm wildlife (black rhinos, chimpanzees, gorillas and elephants) in the rainforests which the pipeline would pass through, dislocate inhabitants along the pipeline route, and further increase civil strife through profiteering by local officials. (www.eia.doe.gov)

Social Impacts

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

intertribal conflict over damage compensation, assassination of nonviolent 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 an investigation into the illegal existence of 193 unlicensed airstrips and helipads operated by large multinational oil companies.”

source: www.eia.doe.gov

Social Impacts

“The president faces the daunting task of rebuilding a petroleum-based economy, whose revenues have been squandered through corruption and mismanagement, …” (CIA World Factbook)

“NNPC estimates that from January 2004 to September 2004, 581 cases of pipeline vandalism were recorded. In December 2004, an explosion at a petroleum products pipeline in Ilado attributed to pipeline vandals resulted in the death of 26 people. As a result of frequent attacks on oil and electricity infrastructure, the Nigerian Legislative Committee proposed an anti-vandalism law in December 2004, outlining penalties including life imprisonment for the crime.” (www.eia.doe.gov)

Pipeline fires

Who’s to blame?• Vandals?

• Oil companies?

• The Nigerian government?

• the global economic system?

Theft?

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

by embezzlement or burglary) of propertyThere are no laws to define natural

resources as property of the local residents at the global level!

Resources in effect belong to whoever has the money to extract them and pay off the local government!

Overall Implications

Large companiesBased in rich countriesExtract resources from poor countriesUsing investment money from rich countriesAnd profiting investors in rich countries,While imposing environmental costs on the

ordinary people of poor countriesAnd 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 rich countries

The personal side we don’t often see