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The Guardian: Oil wealth a boon and burden for Nigeria

Communities in the Niger delta are finally getting a share of the oil money, but serious problems remain, says Mark Tran

Friday October 6, 2006
Guardian Unlimited
Nigeria is the eighth richest oil country in the world and the wealthiest in Africa, with oil revenues accounting for nearly 80% of the national budget. Over the decades, Nigeria has earned billions of dollars from its oil sector, and usually generates about 2.6m barrels of oil a day.

But oil has proved a blessing and a curse for Nigeria, and has been especially damaging for the people of the Niger delta. International oil companies have operated there since 1956, when oil was first discovered in Oloibiri, in what is now Bayelsa State. Communities in the Niger delta see little benefit from Nigeria’s oil revenues. It used to be that the federal government took the lion’s share. Lagos still gets most of the revenues but the state governments in the Niger delta do now get a substantial share of the oil money. But this has led to an increase in violence between different groups competing for a share of the cash. 

And the region remains mired in poverty. Large areas have erratic electricity supplies, poor water quality, and few functioning schools, health care centres, post offices or police stations.

The only government presence comes in the form of soldiers “occasionally sent in to beat people up”, as one Nigeria expert put it. There is very little infrastructure, public works or employment. Partly this is due to the swampy terrain, which makes it difficult to build roads. The oil sector itself provides little employment, as companies need few workers once the oil is coming out of the ground.

To make matters worse, frequent oil spills have affected fish stocks and polluted water sources.

Communities have turned against each other in a bid to get a share of the oil wealth. Some have committed acts of sabotage by damaging pipelines so they can claim compensation or clean-up contracts for the resulting oil spills. Attacks on the industry have seen a 20% cut in oil production since February, posing major headaches for companies such as Shell.

The oil companies have partly themselves to blame for their predicament. Kidnapping has become a lucrative business as the oil firms nearly always pay up. Kidnappings of Nigerian workers take place on an almost daily basis and are resolved quietly. Kidnappings of foreign workers make more of a splash, but usually end in the same fashion, with money handed over and with nobody getting hurt.

Shell’s chief executive Jeroen van der Veer has admitted that the company will need a new strategy to address the deteriorating security situation in Nigeria, but there has been no word on when this new strategy will be launched. In the meantime, better governance at the state level would make for a big improvement. Until that happens, little will change from the situation as described in an Amnesty international report last year.

“Oil continues to blight rather than benefit the lives of most delta populations. The decades of neglect and deprivation, and the few prospects for fundamental change, have resulted in increasing levels of violence between impoverished communities competing for control of the oil riches and against oil company personnel and property.” and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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