Analysis: Violence circles on Nigerian oil

WASHINGTON, Sept. 11 (UPI) -- Nigeria's oil industry has taken a hit from kidnappings and attacks on its infrastructure, but the very government and corporate establishment condemning the violence -- and vowing to overpower it -- may be to blame.

The oil-rich Niger Delta supplies all of the country's oil, making it the largest oil producer in Africa, the eighth-largest in the world and the fifth-largest supplier to the United States.

It is also the scene of increasing poverty, despite generating more than $300 billion in revenue since the 1970s, and growing frustration that the oil found in the average village isn't improving rural life.

Government corruption, rampant though improving, is one reason.

Goodluck Diigbo, who was born and raised in the region but fled it in the early 1990s, blames it also on oil companies turning away from the villagers' plight and aid money that, after vetting by government grafters, was misguided.

"When corporations and profiteering institutions step into your community, without prior consultation or prior consent, it's very offensive. When these corporations and institutions, having come into your community, deprive you of your inheritance, such as land and other resources that are in your backyard, it's even worse," Diigbo told United Press International recently, following a news conference for the Foundation for Global Village Congress.

Diigbo is the executive director of the organization, which aims to increase the self-determination of the poorest villages in the world using a "bottom-up culture of development."

"When corporations, especially corporations that are seeking to exploit resources in local areas, avoid local people in order to get access to those resources ... they become the sources of problems, serious bloody conflicts, because it is happening now in the Niger Delta area in Nigeria," he said.

At a meeting of the Organization of Petroleum Exporting Countries in Vienna Monday, Nigerian Oil Minister Edmund Daukoru issued vague promises that security concerns in the country, especially in the Niger Delta, would be addressed.

Without details, one can assume the move will be less diplomatic and more a show of force. The most drastic example of this was the Aug. 24 burning of hundreds of homes in a slum in Port Harcourt, Nigeria, a day after an Italian oil company worker was kidnapped by gunmen who also killed the worker's bodyguard and a Nigerian army sergeant (oil industry workers now regularly travel with armed guards).

This week, oil and gas workers are to begin a strike in protest of the decline in security.

At least 19 oil workers were kidnapped in August alone -- most of whom were returned for ransom -- and production has dropped by 900,000 barrels a day to 2.3 million barrels.

Oil is often siphoned from the pipelines to sell on the black market.

In July, an Italian oil company's office was attacked after it refused to sign an agreement with local villagers.

"Things are not good, actually," said Monica Enfield, a managing analyst at PFC Energy, which focuses on geopolitical risk assessment in the oil sector.

"What we see now is not only unhappiness with the situation of governance and economic development, but you have groups that are much more heavily armed than they were, say, 20 years ago."

Eighty percent of Nigeria's budget is funded from its oil resources, but "those revenues aren't trickling down to the local level," she said.

"If you're given a choice of not having a job or having a gun and being able to extract money from the government and oil industry through ransom and so forth, it seems like a better economic option."

And when these people look at the oil infrastructure, especially with recent record-high prices for oil, which is being protected by armed guards and their country's military, violence becomes almost necessary to confront it.

"Oil companies have tried to address the problem of community unrest in a variety of ways throughout the years" largely without success, Enfield said, adding "solving the structural issues in the Niger Delta is the only way to eliminate the conflict and the problems."

Yet getting global aid to developing nations is easier said than done.

"After 50 years and more than a trillion dollars, it is clear that foreign aid has failed," said Adam Lerrick, scholar at the American Enterprise Institute and economics professor at Carnegie Mellon University, because the money has flowed typically to countries with corrupt governments.

"For the government, control of resources -- aid resources and all resources -- serves two functions: one to enrich the elite and two to maintain power."

Nigeria is one example, Lerrick said, of this chronic corruption and its effective diversion of aid. "There are no success stories of poor but corrupt countries that have blossomed under aid."

On Monday the Economic and Financial Crime Commission announced it confiscated $13.5 million from the wife of a regional governor amid suspicion of graft.

To solve these problems, Diigbo is pushing for a global acceptance of his vision, where the local community is guaranteed a majority role in deciding its future.

If not, "there is no way you should have access (to resources), because to do otherwise would only mean the use of force of arms."

And then the circle of violence continues.

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