There are few safe places left for oil companies in the Niger Delta, the epicenter of this country's petroleum industry.
Armed gangs have blown up pipelines, disabled pumping stations, and kidnapped more than 150 foreign oil workers in the last year. Companies now confine employees to heavily fortified compounds, allowing them to travel only by armored car or helicopter.
One company has fitted bathrooms with steel bolts to turn them into "panic" rooms, if needed. Another has coated the pylons of a giant oil-production platform offshore with waterproof grease to prevent attackers from climbing the rig.
PHOTO: NY TIMES NEWS SERVICE
The violence in the Niger Delta was likely to be one of the thorniest political problems for Nigeria's new president, to be chosen in yesterday's election. Oil, after all, is the mainstay of Nigeria's economy, providing 65 percent of its revenue.
The events in Nigeria, the world's eighth-largest oil exporter, have rippled across energy markets, contributing to higher prices and tighter supplies. On Friday, gunmen attacked a boat carrying oil workers to an offshore rig in the delta, pushing up oil prices by more than US$1.50, to US$63.38 a barrel.
The US imports more than 1 million barrels of crude oil from Nigeria every day.
Many analysts warn that tensions here could derail plans to boost oil production in this country of 140 million people. Already, a quarter of Nigeria's oil output has been shut down, costing an estimated US$12 billion in lost sales last year. Some foreign operators have abandoned oil fields, or left the country altogether.
"I can't think of anything worse right now," said Larry Johnson, a former US Army officer who was recently hired to toughen security at a site here operated by Eni, an Italian oil producer.
"Even Angola during the civil war wasn't as bad," he said.
Violence is not new to the Niger Delta, a vast area of swamps and creeks where the Niger River washes out into the Atlantic Ocean. The region, which produces most of the country's oil, is also one of the nation's poorest.
In the 1990s, there were occasional kidnappings.
But at the time, recalled Chris Haynes, a senior Shell executive, "you could usually get them released for a few bags of rice or a cow."
Since January last year, however, violence in the delta has surged. So far this year, there have been at least 18 attacks against oil facilities or bases in the delta, according to Bergen Risk Solutions, a consultancy based in Bergen, Norway.
And about 70 foreigners have been abducted this year, although most have been released within weeks in exchange for ransoms, typically hundreds of thousands of dollars.
Oil companies find themselves in an uneasy position, stuck in a crisis that they, in a sense, helped create. For years, human rights groups accused them of turning a blind eye to the corruption of Nigeria's successive military regimes while damaging the environment in the delta.
Some companies have acknowledged these past grievances but say they changed after Nigeria returned to civilian rule in 1999.
Still, gas flaring into the atmosphere remains a serious problem despite a government deadline to end the practice by next year; few expect that deadline will be met.
Also, oil spills continue to spoil the Niger Delta's fragile environment. Energy executives blame locals for sabotaging their pipelines either to steal the oil or to gain lucrative cleanup contracts.
By all accounts, petroleum profits have brought huge benefits to this country's rulers, but few to its people.
Oil companies typically keep 7 percent of the profits from oil sales; the government gets 93 percent.
Nigeria ranks as one of the most corrupt countries in the world according to Transparency International, a Berlin-based anti-corruption group; 70 percent of the country's population lives on US$1 a day or less. Life expectancy is 47 years.
Between 1960 and 1999, more than US$380 billion was stolen or wasted, according to Nuhu Ribadu, Nigeria's top anti-corruption official.
In that period, the country produced over US$400 billion worth of oil.
In an effort to redistribute wealth, the government now gives 13 percent of the proceeds from oil sales to the producing states but there is little accountability of how these funds are spent. Much of it simply disappears, wasted by inefficient or corrupt local officials, a recent Human Rights Watch report said.
The River States government, for example, had a budget of US$1.3 billion last year, the report said.
It includes transportation fees of US$65,000 a day for the governor's office; US$10 million for catering, entertainment, gifts and souvenirs; and US$38 million for two helicopters. Health services received US$22 million.
"Oil companies are caught in an impossible situation," said Chris Albin-Lackey, a researcher with Human Rights Watch.
"They cannot meet the expectations of the communities in which they operate. At the same time, you have a government unwilling to do anything about the delta," Albin-Lackey said.
Oil companies have all set up programs to build infrastructure such as roads, hospitals or schools in their communities.
Shell, for example, said it spends more than US$100 million each year on social and health programs in the Niger Delta.
Exxon, which has set aside US$21 million this year for similar projects, noted it had built 95 percent of the roads in the town of Eket, close to one of its operations.
But in the absence of government services, executives say their programs alone cannot buy them sustained peace.
"The government should really be the one who looks after everybody else," said Basil Omiyi, Shell's managing director in Nigeria. "I don't think the capital program of oil and gas companies can be the government in the Niger Delta."
John Chaplin, Exxon's top executive in Nigeria, said, "The demands are limitless."
Critics say governments in Abuja, the country's modern capital, have neglected the delta region and blame oil companies for being complicit in a system that ignores the communities where the oil is produced.
"The situation here is deplorable," said John Owubokiri, an advocate for the rights of the delta states in Port Harcourt. "The people are being shortchanged."
That message is now being delivered in a more forceful way than the largely nonviolent militancy of the past decade.
A new group, the Movement for the Emancipation of the Niger Delta, has emerged in the past year and claimed responsibility for many of the kidnappings and attacks against oil companies.
Movement for the Emancipation of the Niger Delta wants more money for the delta states and has vowed to bring Nigeria's oil exports to a stop if its demands are not met.
"We are more than capable of escalating the violence," the group's spokesman, Jomo Gbomo, who regularly sends e-mail messages to the media, wrote in response to e-mailed questions.
The group, he said, is prepared for "a protracted military confrontation."
The violence has driven some companies away. Willbros, one of the world's largest independent contractors, left Nigeria last summer after nearly 45 years, because nine of its employees were held in the swamps for weeks.
After their release, Willbros said that the dangers in Nigeria "exceed our acceptable risk levels."
After one of Shell's big export sites was bombed in February last year, the company abandoned its operations in the Western part of the delta and shut half its production, or 500,000 barrels a day.
Early this month, Shell outlined plans to restart production within six months. Meanwhile, the government has been unable to quell the unrest, security consultants said.
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