Nigerias Oil Economy

A case study in political ecology

Contrasts
Wealth in Natural Resources
Nigeria is ranked number 11 among the worlds oil producing states
Production = 2.6 million barrels per day in 2005 At $55 a barrel, thats $143 million a day, or $52 billion/yr.

Poverty of Local Population

GNI per capita: $390 (US over $40,000, Mexico is about $10,000) more than 70% of the Nigerian population lives in poverty Where 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 Nigeria

Shell 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 income Total: $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

Whos 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 property

There 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 companies Based in rich countries Extract resources from poor countries Using investment money from rich countries And 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 countries Who maintain control over the resources and land by using weapons bought from the rich countries

The personal side we dont often see