Nigeria – ‘Astonishingly High’ Pollution

Oil giant accused of concealing data on the health effects of two major spills. 

Data gathered among the Bodo community, which was devastated by two huge oil spills in 2008 and 2009, showed levels of pollution were “astonishingly high”, according to a letter by former employee of Shell, Kay Koltzmann.

Holtzmann was the former director in charge of Shell’s project to clean up oil spills in the Bodo community, in the oil-producing Niger Delta region. He accused the company of refusing to make the findings public.

The clean-up project carried out an analysis of the environment in the Bodo creeks in August 2015 “against fierce opposition” from Shell’s subsidiary company, Shell Petroleum Development Company of Nigeria (SPDC). 

“The results from the laboratory were astonishingly high, actually the soil in the mangroves is literally soaked with hydrocarbons. Whoever is walking in the creeks cannot avoid contact with toxic substances… negative long term effects on their health are unpredictable,” he said.

The letter was addressed to the chairman of the Bodo Mediation Initiative, which is sponsored by the Dutch Government and is tasked to ensure the clean up meets international standards.

Shell accepted liability for the 2008 and 2009 oil spills. In 2011, the United Nations Environment Programme (UNEP) published a report claiming it would take up to 30 years to clean the Niger Delta from oil spills. In 2015, Shell agreed to pay £55m to the Bodo community.

Holtzmann called for “immediate action to protect the health of the Bodo residents” and urged for “medical mass screening” to take place, warning against the risk for people exposed to toxic substances by bathing or drinking the polluted water, reported UK-based the Independent

No one could explain the decision to withhold the data from the public.

Further, on April 10th Shell and ENI were forced to deny that their staff had been involved in payments to officials. In 2010 transactions worth $1.3bn were made by Shell and ENI for exploration of the OPL 245 offshore block, but the companies reportedly knew the funds would go to a front company connected to former petroleum minister Dan Etete, reported Lagos-based, the Guardian

Find out more in the Africa Research Bulletin:

NIGERIA – UK: Pollution Claims Blocked
Economic, Financial & Technical Series
Vol. 54, Issue. 1, Pp. 21560C–21562C

OIL AND GAS: Nigeria
Economic, Financial & Technical Series
Vol. 53, Issue. 12, Pp. 21549B–21550C

OPEC TALKS: Oil Price Boost [Free to Read]
Economic, Financial & Technical Series
Vol. 53, Issue. 11, Pp. 21508A–21509A

Subscribe to the Africa Research Bulletin today. 

Equatorial Guinea – Persistent Poverty

arbe_large700

Despite high per captia income and oil wealth the country is performing poorly in wider social development.

Comparatively, across the African continent, Equatorial Guinea boasts some of the highest levels of per capita income, and with a largely oil dependent economy, it has often escaped mention in discussions of poverty. However, Foreign Minister Agapito Mba Mokuy said despite wealth the country was performing poorly at social development.

According to reports from 2015 still around half of the country’s population lacks access to clean water, and life expectancy and infant mortality are below the average for sub-Saharan Africa. Similarly, half of the children who start primary school never end up finishing.

The problems in part stem from the fact that much of the wealth has been accumulated by senior government officials and a lack of investment in the country, as many officials have turned to overseas investments, drawing allegations of money laundering.

There seems to be, following investigations, systemic corruption at the highest levels of government. Through infrastructure projects the government pours huge amounts of oil money into construction projects, with contracts awarded to companies often owned or closely associated with high-level government officials.

International Monetary Fund (IMF) reports and high-level interviews show that the conflicts of interest allegedly lead to inflated contract prices and dubious investments in “white elephant” projects. The government does not make public its budgets, or track health and education spending, so the only data available is that collected by the IMF and World Bank.

Between 2009 and 2013, Equatorial Guinea took in an average of US$4 billion annually in oil revenue, and spent $4.2bn on infrastructure such as roads, buildings, and airports. However in 2011 the country only spent $140m on education and $92m on health, while the only other year for which data is available, 2008, $60m was spent on education and $90m on health, reported All Africa.

In comparison Uganda and Tanzania spend around a third of their budgets on education each year, while Ghana spends around a quarter, according to the World Bank.

Despite efforts to eradicate poverty and promote inclusive growth, these principles of the African Union (AU) Agenda 2063, are fruitless without efforts to tackle corruption.

The oil reserves in Equatorial Guinea, which have supplied billions of dollars in revenue over the last three decades are expected to run out by 2035, which will only deepen the crisis in the country.

In a recent case the eldest son of President Teodoro Obiang Nguema is facing an ongoing trial after accusations of plundering money from government funds to buy a mansion in Paris, France, allegedly embezzling around Euro 100m, according to Deutschewelle.

Teodorin Obiang is also a vice-president of the small oil-rich state on the African west coast. However his trial was recently postponed giving Obiang an additional six month to prepare his defence. According to Transparency International, this was a delay tactic.

Human rights groups have long bemoaned Equatorial Guinea for its record on civil liberties, unlawful killings and torture, alongside allegations of bribery and corruption.

Find out more in the Africa Research Bulletin:

EQUATORIAL GUINEA – FRANCE: President’s Son on Trial
Economic, Financial & Technical Series
Vol. 53, Issue. 12, Pp. 21521C–21522B

EQUATORIAL GUINEA: Weak Performance
Economic, Financial & Technical Series
Vol. 52, Issue. 7, Pp. 20926A–20926C

EQUATORIAL GUINEA: Co-Investment Fund
Economic, Financial & Technical Series
Vol. 51, Issue. 1, Pp. 20278B–20278C

Subscribe to the Africa Research Bulletin today

Nigeria – Delta Region Infrastructure Targeted

arbp_large

A newly formed rebel group has repeatedly targeted oil and gas installations in Niger Delta State.

On June 1st the latest in a string of attacks on oil and gas facilities hit two Chevron oil wells in Dibi, Warri North Local Government Area, claimed by a newly formed group the Niger Delta Avengers (NDA), occurring a few days before President Muhammadu Buhari‘s planned visit to the area.

Speculation is that the NDA is made up of powerful ‘unpatriotic’ individuals and the military Joint Task Force is specifically pursuing ex-militant leader Government Ekpemupolo.

NDA on its twitter handle @NDAvengers, said: “With the heavy presence of 100 gunboats, 4 warships and jet bombers, NDA blew up Chevron oil well RMP 23 and RMP 24 at 3. 44 am this (yesterday) morning, ” reported Vanguard.

It marks the third such attack on Chevron facilities in a month. The group has also targeted other Chevron and Shell facilities. In April Shell had to break contractual agreements after an attack on a truck line, and a few days later Chevron shut its Valve Platform following another attack.

The damage to infrastructure, along with a global fall in prices, have brought oil production in the country to a 22 year low, alongside impacting the already strained power network, as the power plants rely on gas supply from the damaged pipelines.

Residents in Oporoza area fled to neighbouring Azama community and have been homeless for a number of days. Chairman of Kokodiagbene community Sheriff Mulade said, “the invasion by soldiers affected the ongoing school certificate examinations…hundreds of students, who ran into the bush because of the invasion, are yet to be accounted for, while the academic session has been disrupted.”

22707273700_50629285aa_k

Oil Spill Ogoniland – CC 2015.

Elders in the region, speaking under the auspices of ‘Concerned Niger Delta Elders’, said that the perpetrators of the attacks were against the pro-development and anti-corruption stance of the Buhari administration, reported Vanguard.

The NDA first appeared in February 2016 after claiming responsibility for an attack on a Shell underwater pipeline, which forced company to halt its 250,000 barrels per day Forcados terminal for weeks. Experts noted the high level of technical expertise present in the attacks.

There has been speculation that the NDA consists of members of the Movement for the Emancipation of the Niger Delta (MEND). Another group, the Red Egbesu Water Lions, also recently emerged and has pledged to join with the NDA, reported ABCNews.

In a statement earlier in April the NDA, on their website, said, “we are a group of educated and well-travelled individuals that are poised to take the Niger Delta struggle to new heights that has never been seen in this nation before,” reported BBC News.

The NDA is the first armed group to emerge in the Niger Delta since ex President Umar Musa Yar’Adua granted an amnesty to militants in the region seven years ago. There were agreements for compensation and security following severe environmental degradation and displacement by oil firms, but the NDA claims these have not been upheld and such trends have continued.

Find out more in the Africa Research Bulletin:

NIGERIA: Military Industrial Complex
Political, Social & Cultural Series
Vol.53, Issue.4, Pp.20979C–20980C

NIGERIA: Chibok Second Anniversary
Political, Social & Cultural Series
Vol.53, Issue.4, Pp.20972C–20974B

NIGERIA: Army ‘Has the Measure’ of Boko Haram
Political, Social & Cultural Series
Vol.53, Issue.3, Pp.20938A–20939B

Subscribe to the Africa Research Bulletin today

Nigeria – Oil Thefts on an Unprecedented Scale

arbe_large700

As the army begins operations to combat oil theft in southern states, the scale of corruption in the industry and its impact on the economy, become clear.

On September 2nd the Nigerian army uncovered a large-scale illegal bunkering site in Makoba beach, around a mile from the Rivers Port Complex in Port Harcourt, the capital of southern oil-producing Rivers State. According to Commander of the 2nd Brigade, Brigadier-General Stevenson Olabanji, 13 suspects were arrested, reported Nigerian daily Leadership.

“At the site, we found over 5,000 drums loaded with illegally refined diesel; four tanker trucks containing 132,000 litres of diesel combined, and a badge with 165,000 litres of stolen diesel. This discovery is unprecedented because since we started our operations 10 days ago, this is about the biggest that we have uncovered”, Olabanji commented.

Olabanji explained that the illegal bunkering site has not yet been destroyed in accordance with the Joint Task Force (JTF) mandate because of its close proximity to residential buildings and the port complex; “we cannot do this because it will degrade the environment and affect residents as it is situated in the heart of Port Harcourt. Our plan is to move them to a safe location for destruction”, he said.

Also on September 2nd, the Chief of Naval Staff (CNS), Vice Admiral Ibok Ibas, issued a statement warning of “stiff penalties” for ship owners involved in crude oil theft. Speaking to the Nigerian Ship Owners Association he said that the vessels involved in the criminal activities would be treated as saboteurs, reported Nigerian daily This Day.

SASOL_Gas_Pipeline_-_Temane_-_Mozambique

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Emmanuel Kachikwu, cited by Vanguard on September 2nd, issued an ultimatum, setting an eight-month deadline for the eradication of oil theft, with measures including the introduction of drones to monitor pipelines and patrol coastal areas, enhancing the capabilities of security services.

“Oil theft is a major issue for us. We lose on average of about 50,000 barrels of oil. We lose about US$3-4bn of revenue and that is just in terms of crude oil itself. When you get to pipelines, most of our pipelines are ruptured and attacked fairly frequently. Last year alone, between June 2014 and June 2015, we recorded between 3,400 to 4,000 attacks on the various pipelines in the country. The effect is a shut-in of about 250,000 barrels a day (bpd) and when you calculate that, you have a net loss of over $7bn”, said Kachikwu.

“The pipelines that traverse our country which are supposed to carry crude into our refineries are perpetually harassed and the net effect is that we resorted to using marines to carry cargoes into our refineries….In the last one year, we have lost about 350 lives – NNPC staff, policemen, community members – as a result of attempts to breach these pipelines”, he continued.

The Daily Trust newspaper documents the story of a man known as Okon Mbom, in Orika local government area in Rivers State, who receives Naira 10,000 from operatives deep in the forests, although he is aware that his employers were not government officials, he does not mind as long as he receives a fee at the end of the day.

Thieves use a variety of methods; one method, hot tapping, involves drilling and clamping a valve to avoid spills and explosions, creating a diversion from the main pipeline. Another method involves hand drills and soldering, working while pumping is stopped by pumping station personnel. Another, the “Cock and Shop” method,  is a slow method of corroding the pipeline by using concentrated acid, when the pipeline is corroded a spike is used to burst the pipeline, which sometimes results in an explosion.

On July 29th the Nigeria Extractive Industries Transparency Initiative (NEITI) declared that about US$25.3bn of the nation’s oil money had gone missing over the last eight years, reported Leadership. Oil thieves in the Niger Delta, taking an estimated 180,000bpd, constitute the 12th largest oil producing group in Africa, generating revenue that exceeds the GDP of 15 different African countries. UK-based think-tank Chatham House said that “oil is being stolen on an ‘industrial scale’ in Nigeria and the country’s politicians and security officials are among those profiting”.

A 2014 report by oilprice.com, cited by Leadership, stated that Nigeria tops the list of countries plagued by oil theft, with around 7.7% of GDP vanishing each year, more than the country spends on education and healthcare combined;”The numbers paint a harsh picture about the inability of the Nigerian government, and the multinational oil companies in the Niger Delta, to do anything about this rampant theft” the report said.

Petroleum thefts are a huge issue for Nigeria and one that newly elected Muhammadu Buhari has vowed to combat, a feat his predecessor Goodluck Jonathan failed to achieve; with corruption rife and many officials themselves benefiting, it does not seem like it will be an easy task.

Find out more in the Africa Research Bulletin

NIGERIA: Fighting Graft, Buhari-Style
Economic, Financial & Technical Series
Volume 52, Issue 7, Pp.20919C–20921C

NIGERIA: Oil Sector Under Spotlight
Economic, Financial & Technical Series
Volume.52, Issue.6, Pp.20883B–20884B
Nigeria – Deadly Pipeline Blast
Economic, Financial & Technical Series
Volume.52, Issue.6, Pp.20884B
Subscribe to the Africa Research Bulletin today

Nigeria: Fuel subsidy removal furore

The biggest oil producer in Africa should refine its own products, unions say.

This article will appear in the Africa Research Bulletin: Economic, Financial and Technical Series, Vol 48 No 10 p. 19298C . Subscribe here.

The federal government’s plan to remove the fuel subsidy as of January 2012 – in phases and executed in a “deliberate and responsible way” according to President Goodluck Jonathan’s formal announcement – has created a furore.

President Jonathan cited the benefits: harness revenues for capital stock formation; leverage on private sector investments in public-private partnerships (PPPs) to help bridge the infrastructural gap; and creating incentives for investment in refineries and the petrochemical industries.

His assurance that “this administration is committed to investing the resources in tangible infrastructure and providing social safety nets and other mechanisms to moderate the impact of the reforms on the most vulnerable segments of our society,” failed to convince the labour unions, Trade Union Congress (TUC) and Nigeria Labour Congress (NLC). The NLC called it “a declaration of war against Nigerians.”  NLC General Secretary Owei Lakemfa said it showed the government’s ignorance about the state of poverty in the country and the magnitude of the suffering of the common man. He said that the country should be refining its own petroleum products rather than exporting crude and importing finished products at a very high price.

The All Nigerian Peoples Party (ANPP) described the plan as inhuman. The party’s National Publicity Secretary, Chief Emma Eneukwu, told This Day the Government should stop feeding Nigerians with ill-motivated theories of deregulation.

The main opposition Action Congress of Nigeria (ACN) also rejected the plan. In a November 7th statement reported in Vanguard newspaper ACN called it ”the handiwork of those propelled by the philosophy of the ‘Washington Consensus’ of rolling back the frontiers of the state.” It said improving government solvency was a “cheap argument” which government thinking should go beyond. Like others, the ACN pointed to the anomaly of an oil producer importing oil for domestic consumption.

The World Bank on October 24th endorsed the plan. It said the policy and the setting up of the Sovereign Wealth Fund (SWF) coupled with strict budgetary fiscal discipline would be in the interest of ordinary Nigerians. The European Union (EU) said the subsidy removal would “accrue more resources to be channelled to development projects capable of generating jobs”. The umbrella Manufacturers’ Association of Nigeria (MAN) called it a “bitter pill that we have to swallow”. Some private sector leaders who attended a two-day presidential retreat in Abuja in mid-October indicated support. The Organised Private Sector (OPS) however denied backing the plan. Speaking on behalf of the OPS, Director-General of the Nigeria Employers Consultative Association (NECA), Olusegun Oshinowo, said the OPS had yet to take a position and advised the government to engage in dialogue with representative organisations of the OPS, rather than “individual business owners, multinationals and favoured business men in the private sector.”

The government’s subsequent proposal to set up a “committee of eminent persons” to advise it on how to use savings from the planned fuel subsidy removal was also condemned with the NLC describing it “as another gimmick from government to force the policy down the throats of Nigerians”.

Minister of Petroleum Resources, Mrs Deziani Alison-Madueke, announced the committee proposal on October 25th on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM) in Perth, Australia. She said that because government wanted to ensure openness and transparency in disbursing the proceeds, it would not handle the implementation of the benefits. She noted that Nigerians should not be worried on when the subsidy would be removed, as “we are still in discussions with labour and other stakeholders including the National Assembly.”

The National Union of Petroleum and Natural Gas Workers Union (NUPENG) said it would support the subsidy removal on certain conditions: that Nigerian refineries work, that new refineries come on board, that high prices for imported products are no longer paid. According to NUPENG National Secretary Dayyabu Garga, quoted by the Daily Trust, there is nowhere else in the whole world where a country blessed with abundant natural resources exports crude oil and imports same for local consumption. According to him, the union believes that if the products can be refined within the country, they would be sold for less than N65 per litre than Nigerians pay for it now.

Find out more with the following back issues of the Africa Research Bulletin

Shell Stands Accused (Vol. 48 No 9)

Gambling on Oil (Vol. 48 No 9)

Ogoni Dig in their heels (Vol. 48)

Deregulation in 2011? (Vol. 48 No 6)   

Petroleum Bill Thrown Out (Vol. 48 No. 5)