Offiah E.I 1
AN EVALUATION OF THE IMPACT OF THE AMNESTY PROGRAMME ON
CRUDE OIL EXPLORATION IN NIGER DELTA: THE IMPLICATION TO CRISES
MANAGEMENT IN PUBLIC RELATIONS
BY
OFFIAH; EMMANUEL IKECHUKWU
PG/M.SC/08/53045
DEPARTMENT OF MARKETING (PUBLIC RELATIONS), FACULTY OF
BUSINESS ADMINISTRATION, SCHOOL OF POST GRADUATE STUDIES
UNIVERSITY OF NIGERIA ENUGU CAMPUS
JUNE 2010
Offiah E.I 2
TITLE PAGE
AN EVALUATION OF THE IMPACT OF THE AMNESTY PROGRAM ON CRUDE
OIL EXPLORATION IN NIGER DELTA: THE IMPLICATION TO CRISES
MANAGEMENT IN PUBLIC RELATIONS
BY
OFFIAH EMMANUEL IKECHUKWU
PG/M.SC/08/53045
A RESEARCH PROJECT PRESENTED TO THE MARKETING DEPARTMENT,
FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA
ENUGU CAMPUS IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR
THE AWARD OF M.SC IN PUBLIC RELATIONS.
JUNE 2010
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CERTIFICATION
I Offiah, Emmanuel Ikechukwu a post graduate student of Public Relations in the Department of Marketing, Faculty of Business Administration, University of Nigeria, Enugu Campus, with registration number PG/M.SC/08/53045 here by certify that the work embodied in this project has not been submitted in part or full for any other degree of the institution and others.
______
Offiah Emmanuel I. (Candidate)
Date______
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APPROVAL PAGE
Offiah, Emmanuel Ikechukwu a post graduate student of Public Relations in the Department of Marketing, Faculty of Business Administration, University of Nigeria, Enugu Campus, with registration number PG/M.SC/08/53045 has satisfactorily completed the requirements for the programme.
______
DR J.O. NNABUKO DR J.O. NNABUKO (Supervisor) (Head of Department)
Date______Date______
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DEDICATION
This work is highly dedicated to the Almighty God who is God for ever, the giver of all wisdom and every good thing. I dedicate this work also to my two daughters Vitoria Chioma and Success Chinemeze. They are precious gift from the Lord to me.
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ACKNOWLEDGEMENTS
Writing a project work on a virgin topic and the one that is about the current happening like the Niger
Delta crisis and the amnesty issue, is not an easy task. My thanks go to organizations like Nigerian
National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN) whose websites provided the necessary materials needed for the research work. I also give thanks to the owners of and contributors to the Wikipedia free online encyclopaedia for the valuable materials that they offer to the public which was of great help to me in writing this research project.
Also, no academic work like this can be written without references and uses of past or existing works of other experts particularly, in the field of Public Relations and Crises Management. I therefore, acknowledge with thanks the authors of books, articles and materials referenced in this work, whose efforts and wisdom have sharpened my thought and insights towards the delivery of this project work.
It is my pleasure also to acknowledge the effort of my project supervisor Dr J.O. Nnabuko who is also the Head, Department of Marketing University of Nigeria Enugu Campus, for her scholarly guidance toward this project work.
This section will not be complete without mentioning the scholarly contribution and guidance provided by the lecturers from whom I received tutelage in the University especially Prof. Nwaizugbo, Prof. C.
Amadi, Prof. Onah, Prof. I.E. Nwosu, Dr. J.I. Uduji, Dr. Ehikwe, Dr. S.L. Moguluwa, Dr. C. Obeta, and Chief C.B. Achision. I also, acknowledge all the members of M.Sc Public Relations 2008/9 Class.
I appreciate and at the same time apologize to my two little children, Vitoria and Success, whom I temporally denied care and guidance in their school assignments while writing this project.
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TABLE OF CONTENTS TITLE PAGE CERTIFICATION APPROVAL PAGE DEDICATION ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF TABLES ABSTRACT
CHAPTER ONE: INTRODUCTION 1.1 Background of the Study 1.2 Statement of the Problem 1.3 Objectives of the Study 1.4 Research Questions 1.5 Research Hypotheses 1.6 Significance of the Study 1.7 Delimitations of the Study 1.9 Limitations of the Study 1.10 Definition of Key Terms References
CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction 2.2 Public Relations 2.3 Crisis Management in Public Relations 2.4 Amnesty Approach to Niger Delta Crisis 2.5 Petroleum industry in Nigeria 2.6 Oil History and Politics 2.7 Niger Delta Development Commission and Niger Delta Ministry References
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CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction 3.2 Design of the Study 3.3 Area of the Study 3.4 Population of the Study 3.5 Sources of Data 3.10 Method of Data Presentation and Analysis References
CHAPTER FOUR – PRESENTATION AND ANALYSIS OF DATA 4.1 Introduction 4.2 Research question 4.3 Hypotheses testing References
CHAPTER FIVE – SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.1 Summary of Findings 5.2 Conclusion 5.3 Recommendations References
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Abstract The major purpose of this study was to evaluate the impact of the amnesty programme by Nigerian government to the Niger Delta militants on crude oil exploration in Niger Delta and also, look at the implication to crises management in public relations. Six research questions and two hypotheses were formulated to guide the study. This study utilizes the ex post facto and historical research designs. Data on Crude oil production, export and prices by NNPC from 1961 to 2010 were collected for the study. The data were analysed using descriptive and inferential statistics. One-tailed test was used to test the hypotheses at 0.05 level of significance. The major finding of the study was that immediately after the amnesty program, the crude oil production appreciated by 181 million barrels in 2010 and this increase amounted to $14.659 billion or N 2.2 trillion. It was concluded that the amnesty programme had significant improvement on the level of crude oil exploration and on the level of revenue generated from crude oil from Niger Delta region. (1) It was recommended that the government and the oil multinationals should use every public relations and crises management strategy to rebuild, sustain and maintain peace in the Niger Delta region as this will guarantee steady growth in oil revenue. (2) The government and the oil multinationals should be transparent and accountable enough and ensure participatory development schemes that should foster development in the Niger Delta communities. (3) The Niger Delta crisis requires a negotiated political resolution as any attempt to use military solution would always be disastrous for residents and risky for the oil industry. Most facilities are in the maze of creeks and rivers that are particularly vulnerable to raids by well-armed militants with intimate knowledge of the terrain. (4) Greater effort should be made to stop illegal oil “bunkering” as it accelerates the conflict and provides militant and criminal groups with funds to purchase arms. (5) To encourage faster development of Niger Delta and in an effort to deflect growing public impatience, government should spend, more than ever, greater amounts on community projects. The Oil industries should also contribute to greater extent to the development of the region and should not leave the developmental efforts to the government alone.
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CHAPTER ONE: INTRODUCTION
1.2 Background of the Study
Prior to the discovery of crude oil in the Niger Delta, the area had been very peaceful. The residents were mainly engaged in agriculture and fishing. But the discovery of crude oil and its subsequent elevation as the basic or major resources of the nation, Nigeria, created problems to the inhabitants of the Niger Delta, especially those communities from whose land the oil is tapped and those whose means of livelihood come from fishing. As the federal government of Nigeria received huge royalties from the oil companies, and the oil companies themselves, as well as their workers swim in affluence while the oil communities wallow in abject poverty in addition to contending with environmental degradation and pollution. This situation over the years had propelled and provoked strong agitation and upheaval in the Niger Delta region. The contention has always been between the oil communities in one hand and the oil multinationals and the federal government of Nigeria in the other hand.
However, the Niger Delta crisis was multifaceted. The root cause of this crisis is traceable to the collective failure and neglect of the region by the federal government of Nigeria, the Niger Delta state governments and the multinational oil corporations. They failed to bring about rapid socioeconomic development to the region over the decades, beginning from the time crude oil was found in the region.
Thus the Niger Delta crisis is reducible to underdevelopment of the region. The region has been clamouring for fair compensation and revenue allocation from oil extracted from their land.
Oil revenue allocation had been the subject of much contention well before Nigeria gained its independence. As shown in Table 1, allocations had varied from as much as 50%, owing to the First
Republic's high degree of regional autonomy, and as low as 10% during the military dictatorships. In practice, 85% of the oil wealth was retained by Nigerian elites who comprise 1% of the population. It is important to note that petroleum industry is the largest industry and main generator of GDP in
Nigeria. Since the British discovered oil in the Niger Delta in the late 1950s, the oil industry has been marred by political and economic strife largely due to a long history of corrupt military regimes and complicity of multinational corporations, notably Royal Dutch Shell. Despite this, it was not until the
Offiah E.I 11 early 1990s that the situation was given international attention, particularly following the murder by the Nigerian state of playwright and activist Ken Saro-Wiwa, provoking the immediate suspension of
Nigeria from the Commonwealth of Nations. During that time, Nigeria was identified by the international community as well as the firms in operation therein as a major concern with regards to human rights and environmental degradation. Also, the Nigerian government, oil corporations, and oil- dependent Western countries were criticized for being too slow to implement reforms aimed at aiding a desperately under-developed area and remediating the unsustainable environmental degradation that petroleum extraction has wrought in Niger Delta region (Wikipedia, 2010b).
Table 1.1 Showing the Oil Revenue Sharing Formula in Nigeria
Special Derivation Year Federal State* Local Projects Formula**
1958 40% 60% 0% 0% 50%
1968 80% 20% 0% 0% 10% 1977 75% 22% 3% 0% 10%
1982 55% 32.5% 10% 2.5% 10%
1989 50% 24% 15% 11% 10%
1995 48.5% 24% 20% 7.5% 13%
2001 48.5% 24% 20% 7.5% 13%
Source: World Bank Report cited in Wikipedia (2010 a). * State allocations are based on 5 criteria: equality (equal shares per state), population, social development, land mass, and revenue generation. **The derivation formula refers to the percentage of the revenue oil producing states retain from taxes on oil and other natural resources produced in the state (World Bank Report cited in Wikipedia, 2010 a)
According to Wikipedia (2010b), the leadership of the Niger Delta region were also responsible for most of the underdevelopment in the region. There is large scale corruption amongst the elected leaders especially governors and these leaders have helped to sponsor the militant groups who kidnap innocent people and sabotage the efforts by the federal government for any infrastructure development.
These indicted corrupt leaders were also cheered by the Niger Delta people. It is also important to
Offiah E.I 12 note, as observed by Abidde (2009) that the bloody battle in the Niger Delta is a battle over resource control. It is actually a power struggle between mercenaries of the oligarchy in Nigeria fighting over control of illegal oil bunkering in the oil rich states of the Niger Delta. Abidde (2009) asserted that both the serving and retired top military officers were actively engaged in the criminal operation of illegal oil bunkering and the Nigerian Navy cannot deny this fact, because the tankers and barges used for illegal oil bunkering were not invisible in the territorial waters of the Federal Republic of Nigeria.
These people in oil bunkering were ruthless in their greed for political power and money that they have usurped the rights of the host communities and took over the reins of power in government to control the Nigerian Armed Forces and ruling party to plunder the mineral resources in the country. They shared the oil blocks and engage in do or die battle to sustain their illegal oil bunkering business which fetches over $20 million in return every day (Abidde, 2009). Regional analysts have warned that oil bunkering and the deteriorating situation in the Niger Delta poses a major threat to international security. In an effort to stop this ugly situation, some Policy wonks (experts in matters of policy) in
Washington DC had been pushing the Obama administration to seek an international consensus on policies to help the impoverished Niger Delta region through a more effective Gulf of Guinea Energy
Security Strategy in close collaboration with the United Nations, the World Bank, and other key stakeholders engaged with Nigeria (Huhuonline.com, 2010).
For the past two decades, Niger Delta was in the eyes of the storm over the emergence of militant groups and criminal gangsters that held the country to ransom from the Niger Delta region.
Historically, the sinister hydra-headed monster of the militant insurgency and criminality grew from the hitherto struggle for resource control by the Niger Delta leaders and people who used the struggle to make various political demands on the Nigerian State for the physical development of the region.
But the so-called militants and criminals capitalized upon this political struggle of the people to launch their own sinister and violent agenda. Gradually, the rather peaceful political struggle for resource control degenerated into violent agitations by the various militant insurgent groups that emerged to take over the struggle.
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This began the era of unprecedented and consistent violent campaign against the Nigerian State through numerous attacks on the oil industrial facilities (the life-wire of the national economy as at present) such as pipelines, flow stations, oil platforms and others; kidnapping of foreign oil workers and non-oil workers alike (assaulting and harming others in the process); demanding and taking of heavy ransoms from the State Governments and individual in that region, families of the victims and other stakeholders were forced to pay these ransoms in order to secure the lives of the victims; accumulation and proliferation of small, light and medium weapons (illegal possession of firearms); rising in insurrection and levying war by proxy against the Nigerian State by killing military and police personnel at intervals; carving out of safe havens out of the sovereign territories of the State to carry out their nefarious activities such as imposition of terror, extortions and collection of illegal levies and taxies from the local communities as well as illegal collection of rents and royalties from oil and gas companies operating in the region; etc. All these constitute grave criminal offences according to the
1999 Constitution, the existing Criminal Code and the various laws governing the oil industry of which punishment ranges from fines, life imprisonment and even death penalty.
Chukwu (2009) writes that the federal government floated the amnesty option in its search for a solution to the Niger Delta crisis. The measure was in itself a big venture with several rough sides, especially in view of the defiant posturing of some of the militant leaders and their claim that the region deserves compensation having for long been on the receiving end. It is regrettable that the Late
President Umaru Musa Yar'Adua signed a historic agreement with his Russian counterpart Dimitriv
Medvedev in Abuja on Wednesday June 24, 2009, for Gazprom to invest $2.5 billion to pipe gas from
Nigeria to Europe via the Sahara Desert. But the next day, the most dreaded militant group in the Niger
Delta vowed to render the deal useless, except some conditions were met, thereby raising doubts on who has the final say on oil and gas decisions in Nigeria.
Chukwu (2009) also maintained that for many years, the federal government had tried to subdue the militants, from Warri to Yenagoa, Port Harcourt to Uyo, etc, but the more the Joint Task Force (JTF) tried to fight the war, the more oil is lost. Both military and political leaders in the region said the situation needed political solution, meaning a form of dialogue. It is believed that every dialogue leads
Offiah E.I 14 to an agreement. The militants say they were fighting because of lack of economic and infrastructural developments in the region, but the federal government of Nigeria said militancy had made it impossible to begin the much-needed development, a situation that has brought Nigeria to the dreaded vicious circle. The federal government needed funds to meet the needs of Nigerians but the militants said they require the needs of their region met before they would allow the federal government to get the oil funds. To break the vicious circle, the Government floated the amnesty option. This was expected to persuade the militants to lay down their arms and the Government to use the peace to earn quick income to begin economic development.
As a result of this insurgency in the Niger Delta, Chukwu (2009) maintained that the nation had been losing billions of dollars and that was why Yar'Adua made the Niger Delta crisis one of his key agenda for rapid response when he assumed office on May 29, 2009. Yar'Adua before his sudden death made serious effort to restore peace and order in the Niger Delta. He began by appointing a 45-man technical committee on 8 September 2008, led by Ledum Mitee, a lawyer and president of the
Movement for the Survival of the Ogoni People (MOSOP), among other credible members. The committee was mandated to collate, review and distil all previous reports, memorandums and submissions relating to the Niger Delta issues from the 1957 Sir Henry Willinks Commission through the 2002 General Ogomudia Panel to the 2007 Niger Delta Peace and Conflict Resolution Committee.
The President wanted the committee to harmonise the recommendations of the various committees and make suggestions necessary for the Government to take urgent action. The Technical Committee was the government’s most promising effort to develop a coherent, long-term strategy in the Niger Delta.
Dr Goodluck Jonathan, who was Vice President then, pledged that the committee recommendations
“will not be treated with levity”. It was widely believed that the government would adopt those recommendations as its definitive roadmap for resolving the Niger Delta crisis.
However, at first it was as if considerable success would not be achieved as an early attempt to convene a Delta summit was aborted due to local opposition. The proposal on May 2008 that militants be incorporated as security companies so they could be hired to guard pipelines and other oil installations met with public scepticism and militants’ rejection and never got off the ground. Creation
Offiah E.I 15 of the Ministry of Niger Delta Affairs in September 2008 initially drew mixed reactions, coupled with low funding in the 2009 budget, and vague division of responsibilities with the Niger Delta
Development Commission (NDDC) in addition to unclear guiding principles, raised doubt in the mind of the publics.
The Technical Committee report recommended amnesty for militant leaders within a comprehensive demobilisation, disarmament and rehabilitation (DDR) program; an increased allocation of oil revenue to the Delta; urgent improvement of infrastructure and human welfare services; and new institutions for the region’s longer-term development. While it did not address all aspects of the crisis, its proposals were sufficiently comprehensive to serve as a catalyst. The Technical Committee also urged the government to issue a White Paper by 1 January 2009 outlining strategies for rapid implementation of its recommendations. All stakeholders concerned with the destiny of the region were also, called upon to show determination and sincerity of purpose towards ensuring lasting development to the people of the Niger Delta region. This was believed to be the ultimate solution to the crisis in the Niger
Delta and against this background I wish to state the problem.
1.2 Statement of the Problem
The discovery and the actual exploitation of crude oil in the Niger Delta have obviously brought drastic changes in all aspects of human lives in the region. The deplorable state of economic, political and ecological lives of the inhabitants of Niger Delta is unimaginable. Specifically, the poor human security (basic needs), lack of infrastructures, wanton environmental damages, theft and unjust distribution of revenue from the sale of oil, violence, underdevelopment, the perceived apathy on the part of the government and the multinational oil companies and failure to establish credible state and local government institutions had contributed to increasing public frustration at the slow pace of change under the country’s nascent democracy, and this is caused by endemic corruption and misadministration inherited from its military predecessors. These various facts contributed to what became known as the Niger Delta Crisis.
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Over the years or in the past decades the region had been engulfed in unprecedented crises. These crises ranges from communal clashes; disruption of flow stations and pipelines; disruption of business activities of oil companies; military incursion; obstruction of movements in major land and sea ways; attack on oil workers; and oil bunkering. With time, the conflict graduated to low intensity conflict which is a condition characterized by assassinations, bombings, kidnappings, and mutual destruction of interests. In fact the region became a war zone between the militant youths from Niger Delta and the military force of the Federal Government. Niger Delta became very hostile for oil business activities and many oil wells were abandoned. Subsequently, there was a great drop in quantity of barrels of oil produced by the oil companies on daily basis and generally, life in Niger Delta region became deplorable. In view of these multifarious challenges the Federal Government of Nigeria under the leadership of President Umaru Yar’Adua embarked on an ambitious move to end armed insurgency in the country’s oil-rich Niger Delta region.
1.3 The Objectives of the Study
This study seeks to evaluate the impact of the Amnesty programme on crude oil exploration in Niger
Delta and also, look at the implication to crises management in public relations.
The specific objectives include:
1. To determine the trend of oil production from 1961 to 2010.
2. To determine the impact of the Niger Delta crises on oil production from 2003 to 2010.
3. To determine the effect of the amnesty program on improving the quantity of oil produced
in the post amnesty period.
4. To determine the quantity of crude oil lost as a result the crisis from 2003 to 2009.
5. To evaluate the impact of the crisis on the revenue realisable by the Federal Government of
Nigeria from 2003 to 2009.
6. To ascertain other consequences of the crises in Niger Delta to oil business in Nigeria.
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1.4 Research Questions
Based on the objectives, the following research questions were formulated to give direction and focus to this research work.
1. What was the trend of oil production from 1961 to 2010?
2. What was the impact of the Niger Delta crises on oil production from 2000 to 2009?
3. What was the effect of the amnesty program on improving the quantity of oil produced in
the post amnesty period?
4. What was the quantity of oil products lost as a result the crisis from 2003 to 2009?
5. What was the impact of the crisis on the revenue realisable by the Federal Government of
Nigeria from 2003 to 2009?
6. Where there other consequences of the crises in Niger Delta to oil business in Nigeria?
1.5 Research Hypotheses
The following Null Hypotheses were posed and tested in the study.
1. Ho1: The amnesty programme has no significant improvement on the level of crude oil
exploration after the amnesty program.
2. Ho2: The amnesty programme has no significant improvement on the level of revenue
generated from crude oil after the amnesty program.
1.6 The Significance of the Study
It is expected that this study will contribute to existing literature in the area of crises or conflict management and issue management, especially in public relations. In the same vein, public relations students and practitioner will find this work interesting as it gave in-depth discussion on crises management and issue management. Also, public relations managers will understand from this study the need to make adequate preparation or plan for crisis before they occurs and the need to do crises simulation and write crises plan before the crises occur. The result will also be beneficial to the environmental managers and agencies. They will draw inspiration from this study that will assist them to improving their public relations strategy.
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Organizations both profit and non-profit, will learn from this study the need to manage issues before they turn to crisis. The effect of crises is devastating and it cost less to manage issues than to mange crisis. In that direction, the study will help stakeholders in oil and gas, the oil multinationals as well as the government to understand the role of public relations in addressing issues and crises like that of
Niger Delta. It is expected that the study will serve as eye-opener to organization in matters of taking public relations very seriously.
The study reveals to us that the cost of crisis is more to an organization than the cost of maintain public relations. The study is also an evaluation of the government’s effort in bringing a lasting peace, social and economic progress in the Niger Delta. The study will be to some people a source of information as to the operation of the oil industries. The history of the beginning and the hopeful end of the Niger
Delta crisis and the various dimensions the crises took were discussed in the study. To this end, researchers will find a comprehensive account on the crisis of the Niger Delta which will assist them in further studies in that direction.
1.7 Delimitations of the Study
This study is delimited to the impact of the Amnesty programme on crude oil exploration in Niger
Delta and the implication of the crises and the amnesty programme to crises management in public relations. The study takes a holistic view of the crises in the Niger Delta from its inception till the post amnesty period. Data on the level of crude oil production and export from 1961 to 2010 were collected and analysed. It was hoped that the report will be ready within 2011.
1.8 Limitation of the Study
The researcher was constrained by some obvious limitations. These research topic and research methodologies are yet to be explored full by researchers and the event is still current. As a result of this fact, the time spent for gathering materials was too long such that it caused unnecessary delay to the project work and the resultant huge cost associated with sourcing for data and materials was enormous.
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1.9 Definition of Relevant Terms
Amnesty: According to Encarta dictionary, Amnesty is a form of official general pardon, especially for those who have committed political crimes. It is also a period during which crimes can be admitted or illegal weapons handed in without prosecution.
Crises Management: Crisis management is the process by which an organization deals with a major unpredictable event that threatens to harm the organization, its stakeholders, or the general public.
Niger Delta: The Niger Delta, the delta of the Niger River in Nigeria, is a densely populated region sometimes called the Oil Rivers because it was once a major producer of palm oil. The area was the
British Oil Rivers Protectorate from 1885 until 1893, when it was expanded and became the Niger
Coast Protectorate. The Niger Delta, as now defined officially by the Nigerian Government, extends over about 70,000 km² and makes up 7.5% of Nigeria’s land mass. Historically and cartographically, it consists of present day, Bayelsa, Delta and Rivers State. In the year 2000 Obansanjo's administration expanded its definition to include Abia, Akwa-Ibom, Cross River State, Edo, Imo and Ondo States.
Some 31 million people of more than 40 ethnic groups including the Efik, Ibibio Annang, Oron, Ijaw,
Itsekiri, Igbo, Urhobo, Yoruba, and Kalabari, are among some who speak about 250 dialects in the
Niger Delta. The South-South Niger Delta, also known as the "South South Zone" includes Akwa
Ibom State, Bayelsa State, Cross River State, Delta State, Edo State and Rivers State (Wikipedia,
2010 a).
Public Relations: According to Mexican Statement by Public Relations Associates, Public Relations is the art and social science of analyzing trends, predicting their consequences, counselling organization leaders, and implementing planned programmes of action which will serve both the organisation’s and the public interest. The British institute of Public Relations also states that Public
Relations is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics.
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References
Abidde S. O. (2009). The Niger Delta Amnesty Program…what’s Next?. [Online] 7th September 2009 [Accessed: 8 March 2010]
Abidde S. O. (2009). The Complexities of the Post-Amnesty Environment (part 1). [Online] 9th December. [Accessed: 8 March 2010]
Ekenamah A.(2010). Managing Post-Amnesty Era in the Niger Delta. Business world. January 5th, 2010m [Online] [Accessed: 8 March 2010]
Huhuonline.com (2010). Niger Delta Crisis: US Contemplates Special Envoy. Nigeria News. Tue, 22 Sep 2009. [Online] [Accessed: 8 March 2010]
Ignatius C. (2009). Niger Delta crisis: The amnesty option and its rough edges. Monday, 06 July 2009 [Online] [Accessed: 8 March 2010]
Nigerian Times (2009). Niger Delta Crisis: Amnesty or Travesty? Saturday, July 11, 2009 [Online] [Accessed: 8 March 2010]
Wikipedia (2010 a). Niger Delta [Online] Available from: http://en.wikipedia.org/wiki/Niger_Delta. [Accessed: 8 March 2010]
Wikipedia (2010 b). Petroleum industry in Nigeria. [Online] Available from: http://en.wikipedia.org/wiki/Petroleum_industry_in_Nigeria [Accessed: 8 March 2010]
Offiah E.I 21
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter looks at public relations, crisis management in public relations, types of crisis, models and theories associated with crisis management, effects of crisis and public sector crisis management; amnesty approach to Niger delta crisis; petroleum industry in Nigeria, petroleum production and exploration, offshore - deepwater drilling, natural gas, downstream, oil history and politics, and oil companies engaged in oil drilling in Nigeria; impact of oil industry on the environment including oil spills, natural gas flaring, impacts on mangrove forests, impacts on fisheries, impact of oil industry on human rights, poverty and chronic underdevelopment; and Niger Delta Development Commission and
Niger Delta Ministry.
2. 2 Public Relations
According to Mexican Statement by Public Relations Associates, Public Relations practice is the art and social science of analyzing trends, predicting their consequences, counselling organization leaders, and implementing planned programmes of action which will serve both the organisation’s and the public interest. The British institute of Public Relations also states that Public Relations is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics (Jefkins & Yadin, 1998).
Encyclopaedia Britannica (2009) on the other hand, maintained that Public Relations is the aspect of management communications involving the relations between an entity subject to or seeking public attention and the various publics that are or may be interested in it. The entity seeking attention may be a business corporation, an individual politician, a performer or author, a government or government agency, a charitable organization, a religious body, or almost any other person or organization. The publics may include segments as narrow as female voters of a particular political party who are between 35 and 50 years of age or the shareholders in a particular corporation; or the publics may be as broad as any national population or the world at large. The concerns of public relations operate both ways between the subject entity, which may be thought of as the client, and the publics involved. The
Offiah E.I 22 important elements of public relations are to acquaint the client with the public conceptions of the client and to affect these perceptions by focusing, curtailing, amplifying, or augmenting information about the client as it is conveyed to the publics.
The real tasks of public relations in the business world, as contained in Encyclopaedia Britannica
(2009), may focus on corporate interests or those of marketing products or services; on image creation or defence against attack; on broad public relations or straight publicity. In general, the strategic goal of public relations is to project a favourable public image, one of corporate good citizenship; but this cannot be accomplished with lights and mirrors in an age of investigative journalism, and the first responsibility of public relations is to persuade management that the reality must correspond with the desired image. Public relations is concerned with creating a favourable climate for marketing the client's products or services, including maintaining good relations with merchants and distributors as well as placing product publicity and disseminating information to trade and industrial groups. This calls for the preparation of technical articles addressed to technicians and engineers and of others translating technical information for lay readers. It further includes publicizing praiseworthy activities by company personnel. Financial public relations involves relations with company's own stockholders
(stockholder relations) as well as with the investment communities.
To a large extent, the job of public relations is to optimize good news and to forestall bad news, but when disaster strikes, the public relations practitioner's task, in consultation with legal counsel, is to assess the situation and the damage, to assemble the facts, together with necessary background information, and to offer these to the news media, along with answers to their questions of fact. When a client is under attack, it is a public relations responsibility to organize the client's response - usually involving several complicated issues - to be both lucid and persuasive. Government relations are often included in public relations under the general designation of public affairs and encompass lobbying.
Industrial relations (i.e., labour-management relations), employee relations, and customer relations sometimes are accounted part of public relations. Community relations is important wherever a client has an office or plant. Modern corporate executives often do not excel at public speaking or writing in non-business language, and a duty of public relations is to translate executives' knowledge into
Offiah E.I 23 speeches or articles intelligible to non-specialists. In fact, the prime responsibility of public relations can be seen as interpreting the client to the public and vice versa (Encyclopaedia Britannica, 2009).
2. 3 Crisis Management in Public Relations
Crisis management is the process by which an organization deals with a major unpredictable event that threatens to harm the organization, its stakeholders, or the general public (Wikipedia, 2010c). Tench &
Yeomans (2006) assert that crisis public relation management is one of the most critical aspects of modern communications. Effective crisis management protects companies their reputations and at times, can salvage their very existence. A crisis is an event that disrupts normal operation of a company or organisation and if badly managed can ruin hard-won reputations in just days and in some cases, write off companies.
Crisis management is occasionally referred to as conflict management, incident management, emergency management and is closely related to issue management, and risk management. The related terms emergency management and business continuity management focus respectively on the prompt but short lived “first aid” type of response e.g. putting the fire out and the longer term recovery and restoration phase e.g. moving operations to another site (Wikipedia, 2010c). Emergency public relations and management is an area in public relations where nobody can claim full expertise because crises come in different forms. Hendrix (2004:367) maintained that emergency public relations is generally reactive in nature. Some practitioners argue that it is impossible to really get ready for a sweeping disaster. However, emergency planning, must be proactive in order to be prepared for a proper reactive response to any emergency.
Crisis management is also a facet of risk management, although it is probably untrue to say that crisis management represents a failure of risk management since it will never be possible to totally mitigate the chances of catastrophes occurring (Wikipedia, 2010d). Risk is defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative. Douglas (2004:46) opine that risk management can therefore be considered the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control
Offiah E.I 24 the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary.
Issue management, which is another important aspect of crisis management, is closely associated with the crisis planning or preparation phase, i.e. defining and understanding the issues. Heath (1997) cited in Tench & Yeomans (2006:398) supports the link to crisis management and highlights how managing issues can help prevent a crisis. Heath maintained that if a company is engaged in crisis, that is ongoing process, it can mitigate or prevent the crisis from becoming an issue by working quickly and responsibly to establish or re-establish the level of control desired by relevant stakeholders. They equally assert that issue management practice is the identification, monitoring, and analysing trends in key publics opinions that can mature into public policy and regulatory or legislative constraint of the private sector.
Tench & Yeomans (2006) assert that Howard Chase was the first to use the term issues management in the mid-1970s, describing it as the capacity to understand, mobilize, coordinate and direct all strategies and policy planning functions, and all public affairs or public relations skills, toward achievement of one objective; that is meaningful participation in creation of public policy that affects personal and institutional destiny. Tench & Yeomans (2006) also, opined that issues management is conceived as a strategic planning function that encompasses both public affairs and public relations skills in influencing public policy in regard to institutions or organizations.
Heath (1997) identifies four functions of issues management. These include anticipating and analysing issues, developing organizational positions on issues, identifying key publics whose support is vital to the public policy issue, and identifying desired behaviours of key publics. Regester & Larkin (2008) in their issues life cycle suggested that issues increase in intensity through three phases (potential, emerging, and current), then reach maximum intensity in the fourth phase which is crisis phase, and depressurise dramatically in the final phase, dormant phase, when they are finally resolved. This seems
Offiah E.I 25 to imply, according to Tench & Yeomans (2006), that unmanaged, all issues eventually turn into crisis and do not necessarily involve a high degree of pressure until they got to crisis phase.
Gaunt & Olleuburger (1995) and Seitel (1989) argue that crisis management is about solving a problem the moment it occurs and after it has become publicly known and therefore reactive; issues management, contrariwise, involves pre-crisis planning, communicating openly and anticipating potential threats that a company is facing and is therefore proactive. This distinction suggests that issues management cannot be reactive. However, issues management can be described as primitive crisis management. Crisis management tends to be about the now and is largely tactical; issue management tend to be about the future, and is largely strategic.
Tranverse-Hearly (1995) talks about the importance of thinking ahead as a means of predicting what issues may influence and affect companies. Regester & Larkin (2008) maintained that an issue ignored is crisis ensured. Crisis management is about dealing with the impact event that fractures the core of a company’s operation and represents an immediate threat to its ability to stay in business; while issues management is about dealing with an evolving public policy debate that over time shapes the way in which a company is permitted to operate.
Tench & Yeomans (2006) maintained that the successful issues manager recognises when an issue has changed or has the power to change the context in which business operates. Issues manager is able to pinpoint a specific threat or opportunity to a specific industry, company or product, in a specific part of the world at a specific point in time, and can execute a series of actions to do something about it while remaining vigilant for any shifts in interpretation that need new thinking. It is the core role of an issue manager to know when an issue has begun to develop and where it is heading. They gave a simplified model for monitoring emerging issues which is based on the idea that all issues tend to follow the same six-phase evolutionary sequence.
Tench & Yeomans (2006) also maintained that issues often begin with a study prompted by the national desire of scientist, and academics to research areas of uncertainty, thus beginning the initiation phase. As the research continues and findings are published, other experts, typically from industry
Offiah E.I 26 groups, government and specialist non-governmental organizations (NGOs) with a particular interest in the subject, study the data and add their own opinions, this is the interpretation phase. At the same point, this sharing of data and interpretation between specialists begins to coalesce around a specific opportunity or threat about which ‘something must be done.’ This is especially true when people feel they are being exposed to a risk over which they have no control and with which they are unfamiliar. If a non-governmental organization or a media commentator can articulate a clear actual or perceived threat, identify a victim and expose a possible culprit this triggers the implication phase. At this stage, negative news coverage and/or a public campaign become a high probability and the tipping point is reached. The tipping point refers to the moment when a debate which has been evolving enters the public domain and ultimately leads to change. At this point public interest is fired which marks the ignition phase (Gladwell, 2000).
This momentum called ‘tipping point’ is the moment when a debate that has been slowly evolving for many years among the scientific, medical, technical and/or academic communities enters the public domain through the media, adopts a political and social agenda and prompts a fundamental shift in government thinking. Such a shift, in turn, leads to legislative and regulatory change that reshapes the business landscape. As the public interest is changed, the lobbying of policy makers begins, this is the imposition Phase (Tench & Yeomans, 2006). Issue management and risk management are critical areas in crisis management in the practice public relations. Now let us look closely at Crisis
Management. Comelissen (2004) describes Crisis Management as a point of great difficulty or danger to an organization possibly threatening its existence and continuity, which requires decisive change.
2. 3.1 Types of Crisis
Saymour & Moore (2000) used a snake metaphor to argue that crisis come in two forms- cobra and python. The Cobra is the sudden crisis or disaster that hits suddenly and takes the company completely by surprise and leaves it in a crisis situation. The Python is the ‘slow-burning’ crisis or crisis creep – a collection of issues that steal up on the company one after another and slowly crush it as in the case of
Niger Delta crisis.
Offiah E.I 27
Sam Black (1989) broke crisis down into the ‘known unknown’ – this includes mishaps owing to the nature of the organization and its activities, e.g. manufacturing or processing and potential for spillages. The ‘unknown unknown’ are events that cannot be predicted and that can come about from employees’ behaviour, unconnected events or circumstances that are unpredictable.
During the crisis management process, it is important to identify types of crises in that different crises necessitate the use of different crisis management strategies. Potential crises are enormous, but crises can be clustered. Coombs (1999) identified nine types of crisis: natural disasters, malevolence, technical breakdowns, human breakdowns, challenges, mega damage, organizational misdeeds, workplace violence and rumours.
Lerbinger (1997) categorised eight types of crisis that are attributed to two causes: management failures or environmental force. The eight categories are: (1) natural disasters (the Asian tsunami), (2) technological crisis (the recalled 2009 Toyota Camry that had break fault), (3) confrontation (Shell Oil attack in Niger Delta), (4) malevolence (product tampering by person wishing evil on the organization or other persons), (5) crisis of skewed management values, (6) crisis of deception, (7) crisis of management misconduct, and (8) business and economic changes.
Natural crises, typically natural disasters considered as 'acts of God,' are such environmental phenomena as earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, landslides, tidal waves, storms, and droughts that threaten life, property, and the environment itself (Coombs, 1999 and
Lerbinger, 1997). Technological crises are caused by human application of science and technology.
Technological accidents inevitably occur when technology becomes complex and coupled and something goes wrong in the system as a whole (Technological breakdowns). Some technological crises occur when human error causes disruptions (Human breakdowns). People tend to assign blame for a technological disaster because technology is subject to human manipulation whereas they do not hold anyone responsible for natural disaster. When an accident creates significant environmental damage, the crisis is categorized as mega damage. Samples include software failures, industrial accidents, and oil spills.
Offiah E.I 28
Confrontation crises occur when discontented individuals and/or groups fight businesses, government, and various interest groups to win acceptance of their demands and expectations. The common type of confrontation crises is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and resisting or disobeying police. An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or other extreme tactics for the purpose of expressing hostility or anger toward, or seeking gain from, a company, country, or economic system, perhaps with the aim of destabilizing or destroying it. Sample crises include product tampering, kidnapping, malicious rumours, terrorism, and espionage. Crises of Organizational
Misdeeds occur when management takes actions it knows will harm or place stakeholders at risk for harm without adequate precautions. Lerbinger specified three different types of crises of organizational misdeeds: crises of skewed management values, crises of deception, and crises of management misconduct.
Crises of skewed management values are caused when managers favour short-term economic gain and neglect broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business creed that focuses on the interests of stockholders and tends to view the interests of its other stakeholders such as customers, employees, and the community. Crises of deception occur when management conceals or misrepresents information about itself and its products in its dealing with consumers and others. Some crises are caused not only by skewed values and deception but deliberate amorality and illegality. This is referred to as Crises of Management
Misconduct. Workplace Violence occurs when an employee or former employee commits violence against other employees on organizational grounds.
Rumours are false information about an organization or its products which creates crisis that hurts the organization’s reputation. Sample is linking the organization to radical groups or stories that their products are contaminated. Rumours are difficult to combat, even with accurate information (Newson
& Carrell, 2001). Lattimore et el (2009) maintained that as with real crisis, rumour can have sever impacts on organizations. When faced with rumour a corporate communicator rarely has any statistical data available to guide decision making. They suggested that the best defence is a good offence, and
Offiah E.I 29 some practical ways of managing rumour include: Strive to increase and maintain trust and credibility;
Keep audiences regularly informed through a variety of communication channels; Tailor each message to the audience receiving it so there’s less likelihood of it being misunderstood; Establish an ongoing rumour hotline and other two-way communication channels to seek questions and concerns from key publics and use written communication to answer the questions posed; and Monitor possible effects of rumours so early intervention can be enacted if necessary.
Public relations practitioners manage crisis communication by having a crisis plan that spell out how the entire organization will respond. When a crisis occurs, a written and rehearsed communication plan will speed up response time by having all the background information available and by having all crises response duties pre-assigned (Tench & Yeomans, 2006).
2.3.2 Models and Theories Associated with Crisis Management
PR Transfer Process Model: The model represents typical issues which confronts the PR practitioners in their job. Their aim is to convert the five negative attitudes into positive ones. Jefkins
(1998) maintained that the principal Public Relations objective is to create understanding, and this understanding is created by knowledge. In hostile situation, the PR manager should find out the extent of the enmity, the form it takes, why it exist, and how it can be resolved so that he can win the people’s sympathy. Prejudice can be as a result of parental, educational, religious, environmental, social or cultural influences, or just plain misunderstanding. Leonn Festinger’s theory of cognitive dissonance’ can be applied to convert the attitude of prejudice to acceptance. At first, people tend to have conservative attitudes to new ideas. They tend to resist such new ideas or change, especially when they do not have full understanding. But once they become converted to accept a new idea, they become enthusiastic supporters and would reject the old idea which we regard as prejudice. Jefkins (1998) maintained that apathy is the worst enemy of understanding. People are sometimes wrapped up in their own interests and unconcerned about other matters. Disinterest can be the product of selfishness, laziness, lack of imagination, or as a result of the subject not having been presented in an interesting and convincing manner. Therefore, in this situation the PR manager should stimulate interest.
Offiah E.I 30
The Frank Jefkins’ Public Relations transfer process model.
Negative Situation Positive Situation Hostility Sympathy Prejudice Acceptance Apathy Interest Ignorance Knowledge Crisis/War Peace/Harmony PR transfer process model Jefkins & Yadin (1998: 41): as expanded by Nwosu (1996) cited in
Anyamikegh (2009).
In today’s busy world no one can know and understand everything. It is very easy to imagine that other people are as familiar with a subject as we are ourselves, but such an assumption is often false and dangerous. Ignorance is widespread in our busy world in which various information are competing against the other. Therefore, we must try to rent a space in people’s minds and memories through knowledge of full information. The transfer process model is expanded by Nwosu to include the conversion of extreme situations of crisis or war, such as we had in Niger Delta, to peace and harmony (Anyamikegh, 2009).
Crisis Management Model: Successfully diffusing a crisis requires an understanding of how to handle a crisis – before it occurs. Gonzalez-Herrero and Pratt created a four-phase crisis management model process that includes: issues management, planning-prevention, the crisis, and post-crisis
(Gonzalez-Herrero and Pratt, 1995). The art is to define what the crisis specifically is or could be, and what has caused it or could cause it.
Management Crisis Planning: No corporation looks forward to facing a situation that causes a significant disruption to their business, especially one that stimulates extensive media coverage. Public scrutiny can result in a negative financial, political, legal and government impact. Crisis management planning deals with providing the best response to a crisis (12Manage.com cited in Wikipedia, 2010d).
Offiah E.I 31
Contingency Planning: Preparing contingency plans in advance, as part of a crisis management plan, is the first step to ensuring an organization is appropriately prepared for a crisis. Crisis management teams can rehearse a crisis plan by developing a simulated scenario to use as a drill. The plan should clearly stipulate that the only people to speak publicly about the crisis are the designated persons, such as the company spokesperson or crisis team members. The first hours after a crisis breaks are the most crucial, so working with speed and efficiency is important, and the plan should indicate how quickly each function should be performed. When preparing to offer a statement externally as well as internally, information should be accurate. Providing incorrect or manipulated information has a tendency to backfire and will greatly exacerbate the situation. The contingency plan should contain information and guidance that will help decision makers to consider not only the short-term consequences, but also the long-term effects of every decision (12Manage.com cited in Wikipedia,
2010d).
Business Continuity Planning: In a situation where a crisis will undoubtedly cause a significant disruption to an organization, a business continuity plan can help minimize the disruption. First, one must identify the critical functions and processes that are necessary to keep the organization running.
Then each critical function and or/process must have its own contingency plan in the event that one of the functions/processes ceases or fails. Testing these contingency plans by rehearsing the required actions in a simulation will allow for all involved to become more sensitive and aware of the possibility of a crisis. As a result, in the event of an actual crisis, the team members will act more quickly and effectively.
Structural-Functional Systems Theory: Infante et el (1997) opined that providing information to an organization in a time of crisis is critical to effective crisis management. Structural-functional systems theory addresses the intricacies of information networks and levels of command making up organizational communication. The structural-functional theory identifies information flow in organizations as "networks" made up of members and "links". Information in organizations flow in patterns called networks.
Offiah E.I 32
Diffusion of Innovation Theory: Another theory that can be applied to the sharing of information is
Diffusion of Innovation Theory. Developed by Everett Rogers, the theory describes how innovation is disseminated and communicated through certain channels over a period of time. Diffusion of innovation in communication occurs when an individual communicates a new idea to one or several others. At its most elementary form, the process involves: (1) an innovation, (2) an individual or other unit of adoption that has knowledge of or experience with using the innovation, (3) another individual or other unit that does not yet have knowledge of the innovation, and (4) a communication channel connecting the two units. A communication channel is the means by which messages get from one individual to another (Wikipedia, 2010d).
Apologies Theory: Coombs (2007) stated that there has been debate about the role of apologies in crisis management, and some argue that apology opens an organization up for possible legal consequences. "However some evidence indicates that compensation and sympathy, two less expensive strategies, are as effective as an apology in shaping people’s perceptions of the organization taking responsibility for the crisis because these strategies focus on the victims’ needs. The sympathy response expresses concern for victims while compensation offers victims something to offset the suffering."
2.3.3 Effects of Crisis: Tench & Yomans (2006) noted six critical cost implication of crisis to an organization: (1) Financial cost involved in withdrawing products, cleaning up after an industrial accident etc; (2) Management is distracted during crisis as the teams are preoccupied in handling the crisis as long as it lasts; (3) Employees concerns and fears - naturally employees will be concerned about their own prospect, welfare, jobs and financial security. The public relations practitioner of the organization should try to communicate with these internal publics. The employees are informed and reassured of their job safety; (4) Political backlash: Crisis may drag in government regulating authorities who may come up with certain adverse regulatory or political measure/pressure on the affected organization; (5) Legal actions: Crisis breads litigations and injury or other compensation claims can make huge financial demands; and (6) Customer reactions, drop market confidence and reputation.
Offiah E.I 33
One of the foremost recognized studies conducted on the impact of a catastrophe on the stock value of an organization was completed by Dr Rory Knight and Dr Deborah Pretty (1995) at Templeton
College, University of Oxford. The research was commissioned by the Sedgewick Group. This study undertook a detailed analysis of the stock price (post impact) of organizations that had experienced catastrophes. The study identified organizations that recovered and even exceeded pre-catastrophe stock price, (Recoverers), and those that did not recover on stock price, (Non-recoverers). The average cumulative impact on shareholder value for the recoverers was 5% plus on their original stock value.
So the net impact on shareholder value by this stage was actually positive. The non-recoverers remained more or less unchanged between days 5 and 50 after the catastrophe, but suffered a net negative cumulative impact of almost 15% on their stock price up to one year afterwards. One of the key conclusions of this study is that "Effective management of the consequences of catastrophes would appear to be a more significant factor than whether catastrophe insurance hedges the economic impact of the catastrophe". While there are technical elements to this report it is highly recommended to those who wish to engage their senior management in the value of crisis management (Wikipedia, 2010d).
2.3.4 Public Sector Crisis Management
Wikipedia (2010d) maintained that corporate organizations are not the only community that is vulnerable to the perils of a crisis, whether a school shooting, a public health crisis or a terrorist attack that leaves the public seeking comfort in the calm, steady leadership of an elected official, no sector of society is immune to crisis. In response to that reality, crisis management policies, strategies and practices have been developed and adapted across multiple disciplines.
Schools and Crisis Management: In the wake of the school cultism and shootings on college campuses, educational institutions at all levels are now focused on crisis management the trend that is gradually growing in Nigeria. A national study conducted by the University of Arkansas for Medical
Sciences (UAMS) and Arkansas Children’s Hospital Research Institute (ACHRI) has shown that many public school districts have important deficiencies in their emergency and disaster plans (The School
Violence Resource Centre, 2003 cited in Wikipedia, 2010d). In response the Resource Centre has organized a comprehensive set of resources to aid schools is the development of crisis management
Offiah E.I 34 plans. Crisis management plans cover a wide variety of incidents including bomb threats, child abuse, natural disasters, suicide, drug abuse and gang activities – just to list a few. In a similar fashion the plans aim to address all audiences in need of information including parents, the media and law enforcement officials.
Government and Crisis Management: Historically, government at all levels – local, state, and national – has played a large role in crisis management. Indeed, many political philosophers have considered this to be one of the primary roles of government. Emergency services, such as fire and police departments at the local, state, and national levels and the military at the federal level, often play integral roles in crisis situations (Wikipedia, 2010d). For instance, in attempt to help coordinate communication during the response phase of a crisis, the U.S. Federal Emergency Management
Agency (FEMA) within the Department of Homeland Security administers the National Response Plan
(NRP). This plan is intended to integrate public and private response by providing a common language and outlining a chain-of-command when multiple parties are mobilized. It is based on the premise that incidences should be handled at the lowest organizational level possible. The NRP recognizes the private sector as a key partner in domestic incident management, particularly in the area of critical infrastructure protection and restoration.
The National Response Plan is a companion to the National Incidence Management System that acts as a more general template for incident management regardless of cause, size, or complexity. Federal
Emergency Management Agency offers free web-based training on the National Response Plan through the Emergency Management Institute. Common Alerting Protocol (CAP) is a relatively recent mechanism that facilitates crisis communication across different mediums and systems. Common
Alerting Protocol helps create a consistent emergency alert format to reach geographically and linguistically diverse audiences through both audio and visual mediums (Wikipedia, 2010d).
Elected Officials and Crisis Management: Historically, politics and crisis go hand-in-hand. In describing crisis, President Abraham Lincoln said, “We live in the midst of alarms, anxiety beclouds the future; we expect some new disaster with each newspaper we read.” Crisis management has
Offiah E.I 35 become a defining feature of contemporary governance. In times of crisis, communities and members of organizations expect their public leaders to minimize the impact of the crisis at hand, while critics and bureaucratic competitors try to seize the moment to blame incumbent rulers and their policies. In this extreme environment, policy makers must somehow establish a sense of normality, and foster collective learning from the crisis experience (Boin et el, 2005 cited in Wikipedia, 2010d).
Boin et el (2005) advised that in the face of crisis, leaders must deal with the strategic challenges they face, the political risks and opportunities they encounter, the errors they make, the pitfalls they need to avoid, and the paths away from crisis they may pursue. The necessity for management is even more significant with the advent of a 24-hour news cycle and an increasingly internet-savvy audience with ever-changing technology at its fingertips (Boin et el, 2005 cited in Wikipedia, 2010d). Public leaders have a special responsibility to help safeguard society from the adverse consequences of crisis. Experts in crisis management note that leaders who take this responsibility seriously would have to concern themselves with all crisis phases: the incubation stage, the onset, and the aftermath. Crisis leadership then involves five critical tasks: sense making, decision making, meaning making, terminating, and learning (Boin et el, 2005). A brief description of the five facets of crisis leadership according to
Hellsloot (2007) includes: (1) Sense making may be considered as the classical situation assessment step in decision making; (2) Decision making is both the act of coming to a decision as the implementation of that decision; (3) Meaning making refers to crisis management as political communication; (4) Terminating a crisis is only possible if the public leader correctly handles the accountability question; and (5) Learning, refers to the actual learning from a crisis is limited. The authors noted that a crisis often opens a window of opportunity for reform for better or for worse.
2.4 Amnesty Approach to Niger Delta Crisis
Imuetinyan F. (2010) maintained that in the past decade, the Niger Delta region of Nigeria was noted for its restiveness as different militant groups carried out damaging attacks on oil installations and created a general attitude of hostilities, both to the natives and non-natives, thereby causing violent activities in the region. He observed that the attacks since December, 2005 included a spate of kidnappings, shut down of oil production, sabotage of oil facilities, illegal bunkering, vandalism of oil
Offiah E.I 36 pipelines, clashes with Joint Military Task Force (a special unit of Nigerian Armed Forces specially established to check violence) and various attacks on contractors and even innocent people. In spite of all the hostilities recorded in the area, President Umaru Musa Yar’Adua, in realizing his presidential mandate of bringing lasting peace, progress and meaningful development to the area, on Thursday,
June 26th 2009, proclaimed an unconditional amnesty to all Niger Delta militants in the creeks as well as those facing prosecution in the law courts.
Amnesty is a form of official general pardon, especially for those who have committed political crimes. It is also a period during which crimes can be admitted or illegal weapons handed in without prosecution. Since freedom fighting is involved in the Niger Delta crisis, the Federal Government seems to regard the crimes of the militants as political in order to apply the amnesty clause. Amnesty offers a prosecution-free period. Amoda (2009) observed that the relationship assumed by government between it and the Niger Delta militants was juridical; the militants were pardoned instead of being punished. But the situation in the Nigger Delta was that of war between the Federal
Government and the militants who were fighting the war of resource control, or a liberation war; or a protest war waged for effecting remedies for the exploitation of the Niger Delta indigenes resulting in the ruinous condition of their society and the peoples' subsistence economy. Amoda (2009) opined that
Amnesty is not the making of peace between warring parties. Peace made by warring parties brings to an end the relation of war between warring parties. Amnesty is therefore not a peace agreement. It cannot lead to peace agreement except parties, the Government and the militants were to acknowledge that the Niger Delta Region had been a zone of war waged by the militants against the Federal
Republic of Nigeria (Amoda, 2009).
Imuetinyan (2010) states that the proclamation of the President, Umaru Musa Yar’ Adua followed the ratification of the amnesty terms by the Council of State, while the details of the amnesty package were worked out by the Presidential Panel on Amnesty and Disarmament of militants in the Niger
Delta, headed by Major General Godwin Abbe, the Minister of Defence. Essentially, the presidential panel recommended that the president’s proclamation should give the militants a period not exceeding
75 days but not less than 60 days within which to renounce militancy and subscribe to the oath of
Offiah E.I 37 renunciation. The ex-militants responded positively and surrendered different calibres and types of arms and ammunitions. According to the chief coordinator, Federal Government’s Inter-Agency
Coordinating Committee on Amnesty, Air Vice Marshall Ararile, a total of 8,299 militants registered to embrace the amnesty. He revealed that a total of 4,869 militants surrendered from Bayelsa state,
1,061 from Delta, 1,047 from Rivers, 750 from Ondo, 250 from Edo, 162 from Akwa Ibom and 160 from Imo state, respectively (Imuetinyan, 2010). Records tendered by Air Vice Mmarshall Ararile also indicated that arms surrendered included 287,445 different types of ammunitions, with about 2,760 assorted arms, 18 gunboats, 763 dynamites, 1,090 dynamite caps, 3,155 magazines and other accessories like RPG charger, 1 bullet proof jacket, walkie talkies, dynamite cables, cartridges, knives and AK 47 bayonets. A breakdown of the submission showed that 82,406 ammunitions were received from Rivers state, 52,958 from Delta, 139,877 from Bayelsa, 9,748 from Cross River, 9,725 from
Ondo, 959 from Akwa Ibom as well as 722 from Edo state (Imuetinyan, 2010).
The reasonableness of the post amnesty plans of the Federal Government got more relevance when the
Federal Executive Council [FEC] also recently approved about N200 billion for the execution of 44 projects in the nine states that made up the Niger Delta. The projects which will involve the construction of bridges, roads, hospitals, the provision of portable water and environmental impact assessment will be jointly executed by the Niger Delta Development Commission and the Petroleum
Technology Development Fund [PTDF] (Imuetinyan, 2010). According to Imuetinyan, a breakdown of the projects to be executed indicated that Abia would get four projects valued at N9 billion, Akwa
Ibom, four projects valued at N10.2 billion, Bayelsa, six projects at N2.9billion, Cross rivers, three projects at N6.6 billion, and Delta, six projects at N50billion. Other states are, Edo with three projects at N7 billion, Imo, four projects valued at N56 billion, Ondo, three projects at N22.5 billion and Rivers with eleven projects at N35.6billion. Also indicated in the project is a N14.9 billion contract for the development of the newly established Federal Polytechnic of Oil and Gas sited in Bayelsa.
According to Daily Sun News (2010), the Federal Government recently extended its campaign for enduring peace in the restive Niger Delta region with the rehabilitation training programme for ex- militants. About 20192 ex-militants received career guidance and skill acquisition at the National
Offiah E.I 38
Youth Service Orientation Camp, Obubra, in Cross River State. The programme, which was organised by the Amnesty Committee set up by the Federal Government had course facilitators made up of consultants and conflict resolution experts from the Road Island University, United States and Herbert
Lurtini Non-Violence Centre in South Africa.
According to Audio Nigeria news (2010), the exercise designed to prepare the ex-militants for integration into the society was expected to end in December 2010. Findings revealed that the ex- militants were trained in batches of 2,000. Each of the batches spent two weeks in the camp, during which transformation training as well as guidance and counselling were held for them (ex-militants) with a view to determining their career plans. The 20,192 ex-militants were those registered as at 4th
October, 2009 when the amnesty granted them by the late President Umaru Yar’Adua lapsed. The second stage, which entailed demobilisation, reintegration and rehabilitation of the former militants, was consequently inaugurated by the Federal Government. But the non-release of funds to the committee headed by the Presidential Adviser on Niger Delta, Mr. Timi Alaibe, delayed the take-off of the post-amnesty stage. However, the funds were later released to the Alaibe committee on the orders of President Goodluck Jonathan (Audio Nigeria news, 2010).
According to Butty (2010), Timi Alaibe, presidential advisor on Niger Delta said the amnesty program was successful in that, since its introduction, it had led to the reduction of violence and an increase in the production of oil from the Niger Delta. Immediately after the amnesty declaration and the retrieval of arms, there was reduction of violence activities in the Niger Delta. There was also drastic reduction in oil theft and subsequent increase in the production of oil from about 700 barrels per day to about 2.3 million barrels per day. Some of the construction work that was stopped during the period of the crisis were also started. Also, there was general restoration of confidence and business activities.
Despite all this effort the government was making to ensure peace in the Niger Delta, Waled (2010) observed that men of the Joint Military Task Force (JTF) on 1st December 2010 invaded Ayakoromo village, the country home of “General” John Togo, wanted leader of the Niger-Delta Liberation Force
(NDLF). Daily Sun learnt that more than 50 people were killed in the military operations that
Offiah E.I 39 commenced on 1st December, Daily Sun source in Ayakoromo community maintained that there was a shootout between the JTF and John Togo boys on 1st December. The JTF dislodged the ex-militants with its superior arms as they employed both aerial and land attacks during the operation. Reactions had continued to trail the attack with the member representing Burutu Constituency I in the Delta State
House of Assembly, Hon. Frank Enekorogha, the Ijaw Monitoring Group (IMG) and the traditional ruler of Ayakoromo community, His Royal Majesty Pere Bigborogha II (JP), Pere of Ngilebiri Mein
Kingdom describing it as uncalled for. They maintained that JTF mobilizing all the armed forces to bombard innocent villages in the name of looking for less than 20 militants clearly shows that JTF was only playing to the gallery to convince the oil companies and other sponsors to retain them in the region. The leaders said it was unfair for JTF, which responsibility is to protect lives and property, to carry out the onslaught on Ayakoromo, a peaceful community.
According to Waled (2010), the leaders of this community demanded the world to ask JTF how arms returned to militants and how did less than 20 young men regroup after accepting amnesty without the knowledge of military intelligence or State Security Service SSS? What is the work of the intelligence arm of the JTF? Are Ijaw villagers suffering like the Iraqis because JTF wants to prove a point for the
Federal Government and oil companies to continue to spend over $500 millions every year to maintain them instead of using such money to develop the region and bring permanent peace to our homeland?
In line with the above questions, Sahara reporters obtained a secret report by the Nigerian Army implicating National Security Adviser, Gen Andrew Azazi (rtd), former Governors James Ibori and
DSP Alamieyeseigha, and former Director-General of the State Security Service, Lt. Col Kayode Are
(rtd) in the massive diversion and sale of Nigerian army weaponry to Niger Delta militants. Sahara
Reporters obtained the intelligence report a few days after the State Security Services intercepted 13 container loads of arms being imported into Nigeria through the Lagos port. The 35-page report, which is dated November 2007, is the product of an intensive investigation by the headquarters of the
Nigerian Army Intelligence Corps following a tip-off by a soldier and a red flag by the SSS that army weapons were flowing from an ordinance depots in Kaduna and Jaji to militants (Gadogado, 2010).
Offiah E.I 40
Gadogado (2010) maintained that Sonny Bowei Okah, a brother to Henry Okah, the leader of the
Movement for the Emancipation of the Niger Delta, who was facing terrorism charges in South Africa, was portrayed in the report as a central character in the deals. Also mentioned in the document were
Major Gen R.O. Adekhegba, a former Director of the Directorate of Military Intelligence, Henry Okah himself, Major S.A. Akubo, a serving army officer, and ten soldiers who worked with the Nigerian
Army Ordinance Corps. Azazi, who was chief of army staff at that time, Adekhegba, former army intelligence chief, and Are, the then SSS director, reportedly covered up the matter; Ibori and
Alamieyeseigha were named as having financed the arms deals (Gadogado, 2010).
2.5 Petroleum Industry in Nigeria
Wikipedia (2010e) states that the petroleum industry in Nigeria is the largest industry and main generator of GDP in the West African nation which is also the continent's most populous. Since the
British discovered oil in the Niger Delta in the late 1950s, the oil industry has been marred by political and economic strife largely due to a long history of corrupt military regimes and complicity of multinational corporations, notably Royal Dutch Shell. Despite this, it was not until the early 1990s that the situation was given international attention, particularly following the murder by the Nigerian state of playwright and activist Ken Saro-Wiwa, provoking the immediate suspension of Nigeria from the Commonwealth of Nations. Nigeria was identified by the international community and the firms in operation there as a major concern with regards to human rights and environmental degradation. The
Nigerian government, oil corporations, and oil-dependent Western countries had been criticized as too slow to implement reforms aimed at aiding a desperately under-developed area and remediating the unsustainable environmental degradation that petroleum extraction had wrought in the Niger Delta.
2.5.1 Petroleum Production and Exploration: Wikipedia (2010e) further states that as of 2000, oil and gas exports accounted for more than 98% of export earnings and about 83% of federal government revenue, as well as generating more than 40% of its GDP. It also provides 95% of foreign exchange earnings, and about 65% of government budgetary revenues. Nigeria's proven oil reserves are estimated by the U.S. United States Energy Information Administration (EIA) at between 16 and 22 billion barrels (3.5×109 m3), but other sources claim there could be as much as 35.3 billion barrels
Offiah E.I 41
(5.61×109 m3). Its reserves make Nigeria the tenth most petroleum-rich nation, and by the far the most affluent in Africa. In mid-2001 its crude oil production was averaging around 2.2 million barrels
(350,000 m³) per day. Nearly all of the country's primary reserves are concentrated in and around the delta of the Niger River, but off-shore rigs are also prominent in the well-endowed coastal region.
Nigeria is one of the few major oil-producing nations still capable of increasing its oil output. Unlike most of the other OPEC countries, Nigeria was not projected to exceed peak production until at least
2009. The reason for Nigeria's relative unproductivity was primarily OPEC regulations on production to regulate prices on the international market. But in the past decade, production has been disrupted intermittently by the protests of the Niger Delta's inhabitants, who felt they were being exploited
(Wikipedia, 2010e).
Nigeria has a total of 159 oil fields and 1481 wells in operation according to the Ministry of Petroleum
Resources as quoted in Wikipedia (2010e). The most productive region of the nation is the coastal
Niger Delta Basin in the Niger Delta or "South-south" region which encompasses 78 of the 159 oil fields. Most of Nigeria's oil fields are small and scattered, and as of 1990, these small unproductive fields accounted for 62.1% of all Nigerian production. This contrasts with the sixteen largest fields which produced 37.9% of Nigeria's petroleum at that time. As a result of the numerous small fields, an extensive and well-developed pipeline network was engineered to transport the crude.
Nigeria's petroleum is classified mostly as "light" or "sweet", as the oil is largely free of sulphur.
Nigeria is the largest producer of sweet oil in OPEC. This sweet oil is similar in composition to petroleum extracted from the North Sea. This crude oil is known as "Bonny light". Names of other
Nigerian crudes, all of which are named according to export terminal, are Qua Ibo, Escravos blend,
Brass river, Forcados, and Pennington Anfan. The U.S. remains the largest importer of Nigeria's crude oil, accounting for 40% of the country's total oil exports. Nigeria provides about 10% of overall U.S. oil imports and ranks as the fifth-largest source for oil imports in the U.S. (Wikipedia, 2010e).
There are six petroleum exportation terminals in the country. Shell owns two, while Mobil, Chevron,
Texaco, and Agip own one each. Shell also owns the Forcados Terminal, which is capable of storing
Offiah E.I 42
13 million barrels (2,100,000 m3) of crude oil in conjunction with the nearby Bonny Terminal. Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State, while Chevron owns the
Escravos Terminal located in Delta State and has a storage capacity of 3.6 million barrels (570,000 m3). Agip operates the Brass Terminal in Brass, a town 113 km southwest of Port Harcourt and has a storage capacity of 3,558,000 barrels (565,700 m3). Texaco operates the Pennington Terminal
(Wikipedia, 2010e).
2.5.2 Offshore - Deepwater Drilling: Oil companies in Africa investigate offshore production as an alternative area of production. Deepwater production mainly involves underwater drilling that exists
400 m or more below the surface of the water. By expanding to deep water drilling the possible sources for finding new oil reserves is expanded. Through the introduction of deep water drilling 50% more oil is extracted than before the new forms of retrieving the oil (McLennan & Stewart, 2005).
Angola and Nigeria are the largest oil producers in Africa. In Nigeria, the deepwater sector still has a large avenue to expand and develop. The amount of oil extracted from Nigeria was expected to expand from 15,000 bbl/d (2,400 m3/d) in 2003 to 1.27 Mbbl/d (202,000 m3/d) in 2010. Deepwater drilling for oil is especially attractive to oil companies because the Nigerian government has very little share in these activities and it is more difficult for the government to regulate the offshore activities of the companies. Also, the deepwater extraction plants are less disturbed by local militant attacks, seizures due to civil conflicts, and sabotage. These advancements offer more resources and alternatives to extract the oil from the Niger Delta, with hopefully less conflict than the operations on land
(McLennan & Stewart, 2005).
2.5.3 Natural Gas: According to Wikipedia (2010e) natural gas reserves were well over 100 trillion ft³ (2,800 km³), the gas reserves were three times as substantial as the crude oil reserves. The biggest natural gas initiative is the Nigerian Liquified Natural Gas Company, which is operated jointly by several companies and the state. It began exploration and production in 1999. Chevron is also attempting to create the Escravos Gas Utilization project which will be capable of producing 160 million standard ft³ of gas per day. There is also a gas pipeline, known as the West African Gas
Pipeline, in the works but has encountered numerous setbacks. The pipeline would allow for
Offiah E.I 43 transportation of natural gas to Benin, Ghana, Togo, and Cote d'Ivoire. The majority of Nigeria's natural gas is flared off and it is estimated that Nigeria loses 18.2 million USD daily from the loss of the flared gas.
2.5.4 Downstream: Wikipedia (2010e) states that Nigeria's total petroleum refining capacity is
445,000 barrels per day (70,700 m3/d), however, only 240,000 bbl/d (38,000 m3/d) was allotted during the 1990s. Subsequently crude oil production for refineries was reduced further to as little as 75,000 bbl/d (11,900 m3/d) during the regime of Sanni Abacha. There are four major oil refineries: the Warri
Refinery and Petrochemical Plant which can process 125 million barrels (19,900,000 m3) of crude per day, the New Port Harcourt Refinery which can produce 150 million barrels per day (24,000,000 m3/d) (there is also an 'Old' Port Harcourt Refinery with negligible production), as well as the now defunct Kaduna Refinery. The Port Harcourt and Warri Refineries both operate at only 30% capacity.
It is estimated that demand and consumption of petroleum in Nigeria grows at a rate of 12.8% annually
(NigeriaBusinessInfo.com cited in Wikipedia (2010e). However, petroleum products are unavailable to most Nigerians and are quite costly, because almost all of the oil extracted by the multinational oil companies is refined overseas, while only a limited quantity is supplied to Nigerians themselves.
2.5.5 Oil Companies Engaged in Oil Drilling in Nigeria: All petroleum production and exploration is taken under the auspices of joint ventures between foreign multi-national corporations and the
Nigerian federal government. This joint venture manifests itself as the Nigerian National Petroleum
Corporation, a nationalized state corporation. All companies operating in Nigeria obey government operational rules and naming conventions (companies operating in Nigeria must legally be sub-entities of the main corporation, often incorporating "Nigeria" into its name). Joint ventures account for approximately 95 percent of all crude oil output, while local independent companies operating in marginal fields account for the remaining 5 percent. Additionally, the Nigerian constitution states that all minerals, oil, and gas legally belong to the federal government. Six companies are operating in
Nigeria and are listed with their countries of origin. They include Shell Petroleum Development
Company of Nigeria Limited (SPDC) of Royal Dutch Shell (British/Dutch), usually known simply as
Offiah E.I 44
Shell Nigeria is a joint venture operated by Shell which accounts for fifty percent of Nigerian's total oil production (899,000 bbl/d (142,900 m3/d) in 1997) from more than eighty oil fields.
The joint venture is composed of NNPC (55%), Shell (30%), TotalFinaElf (10%) and Agip (5%) and operates largely onshore on dry land or in the mangrove swamp in the Niger Delta. "The company has more than 100 producing oil fields, and a network of more than 6,000 kilometres of pipelines, flowing through 87 flow stations. SPDC operates 2 coastal oil export terminals". The Shell joint venture produces about 50 percent of Nigeria's total crude. Shell Nigeria owns concessions on four companies, they are Shell Petroleum Development Company (SPDC), Shell Nigeria Exploration and Production
Company (SNEPCO), Shell Nigeria Gas (SNG), Shell Nigeria Oil Products (SNOP), as well as holding a major stake in Nigeria Liquefied Natural Gas (NLNG). Shell formerly operated alongside
British Petroleum as Shell-BP, but BP has since sold all of its Nigerian concessions. Most of Shell's operations in Nigeria are conducted through the Shell Petroleum Development Company (SPDC).
Chevron Nigeria Limited (CNL) of Chevron (American) is a joint venture between NNPC (60%) and
Chevron (40%). It has in the past been the second largest producer (approximately 400,000 bbl/d
(64,000 m3/d)), with fields located in the Warri region west of the Niger river and offshore in shallow water. It is reported to aim to increase production to 600,000 bbl/d (95,000 m3/d). Mobil Producing
Nigeria Unlimited (MPNU) of the Exxon-Mobil (American) is a joint venture between the NNPC
(60%) and Exxon-Mobil (40%). The company operates in shallow water off Akwa Ibom state in the south-eastern delta and averaged production of 632,000 bbl/d (100,500 m3/d) in 1997, making it the second largest producer, as against 543,000 pbd in 1996. Mobil also holds a 50% interest in a
Production Sharing Contract for a deep water block further offshore, and is reported to plan to increase output to 900,000 bbl/d (143,000 m3/d) by 2000. Oil industry sources indicated that Mobil is likely to overtake Shell as the largest producer in Nigeria within the next five years, if current trends continue, mainly due to its offshore base allowing it refuge from the conflict Shell had experienced onshore. It is headquartered in Eket and operates in Nigeria under the subsidiary of Mobil Producing Nigeria
(MPN).
Offiah E.I 45
Nigerian Agip Oil Company Limited (NAOC) of Agip (Italian) is a joint venture operated by Agip and owned by the NNPC (60%), Agip (20%) and Conoco Phillips (20%) produces 150,000 bbl/d
(24,000 m3/d) mostly from small onshore fields. Total Petroleum Nigeria Limited (TPNL) of Total
(French) is a joint venture between NNPC (60%) and Elf (now Total) produced approximately 125,000 bbl/d (19,900 m3/d) during 1997, both on and offshore. Elf and Mobil are in dispute over operational control of an offshore field with a production capacity of 90,000 bbl/d (14,000 m3/d). NNPC-Texaco-
Chevron Joint Venture (formerly Texaco Overseas Petroleum Company of Nigeria Unlimited) is a joint venture operated by Texaco and owned by NNPC (60%), Texaco (20%) and Chevron (20%) currently produces about 60,000 bbl/d (9,500 m3/d) from five offshore fields (Human Rights Watch,
1999).
2.5.6 Impact of Oil Industry on the Environment
The Niger Delta comprises 70,000 km² of wetlands formed primarily by sediment deposition. Home to
20 million people and 40 different ethnic groups, this floodplain makes up 7.5% of Nigeria's total land mass. It is the largest wetland and maintains the third-largest drainage area in Africa. The Delta's environment can be broken down into four ecological zones: coastal barrier islands, mangrove swamp forests, freshwater swamps, and lowland rainforests. This incredibly well-endowed ecosystem, which contains one of the highest concentrations of biodiversity on the planet, in addition to supporting the abundant flora and fauna, arable terrain that can sustain a wide variety of crops, economic trees, and more species of freshwater fish than any ecosystem in West Africa. The region could experience a loss of 40% of its inhabitable terrain in the next thirty years because of extensive dam construction in the region. The carelessness of the oil industry had also precipitated this situation, which can perhaps be best encapsulated by a 1983 report issued by the NNPC in 1983, long perform popular unrest surfaced:
We witnessed the slow poisoning of the waters of this country and the destruction of vegetation and agricultural land by oil spills which occur during petroleum operations. But since the inception of the oil industry in Nigeria, more than twenty-five years ago, there had been no concerned and effective effort on the part of the government, let alone the oil operators, to control environmental problems associated with the industry (Greenpeace, 2001).
Offiah E.I 46
2.5.7 Oil Spills: Oil spills in Nigeria occur due to a number of causes which include corrosion of pipelines and tankers (accounts for 50% of all spills), sabotage (28%), and oil production operations
(21%), with 1% of the spills being accounted for by inadequate or non-functional production equipment. The largest contributor to the oil spill total, corrosion of pipes and tanks, was the rupturing or leaking of production infrastructures that were described as, "very old and lack regular inspection and maintenance" (The Association for Environmental Health and Sciences, cited in Wikipedia,
2010e). A reason that corrosion accounts for such a high percentage of all spills is that as a result of the small size of the oilfields in the Niger Delta, there is an extensive network of pipelines between the fields, as well as numerous small networks of flow lines—the narrow diameter pipes that carry oil from wellheads to flow stations—allowing many opportunities for leaks. In onshore areas, most pipelines and flow lines are laid above ground. Pipelines, which have an estimated life span of about fifteen years, were old and susceptible to corrosion. Many of the pipelines were as old as twenty to twenty-five years (Human Rights Watch, 1999). Even Shell admits that "most of the facilities were constructed between the 1960s and early 1980s to the then prevailing standards. Shell Petroleum and
Development Company would not build them that way today" (Wikipedia, 2010e). Shell operates the
Bonny Terminal in Rivers State, which has reportedly been in operation for forty years without a maintenance overhaul; its original lifespan was supposed to be twenty five years
(NigeriaBusinessInfo.com cited in Wikipedia, 2010e).
Sabotage is performed primarily through what is known as "bunkering”, whereby the saboteur attempts to tap the pipeline, and in the process of extraction sometimes the pipeline is damaged or destroyed. Oil extracted in this manner can often be sold for cash compensation. The Nigerian
National Petroleum Corporation places the quantity of oil jettisoned into the environment yearly at
2,500 cubic meters with an average of 300 individual spills annually (Human Rights Watch, 1999).
However, because this amount does not take into account "minor" spills, the World Bank argues that the true quantity of oil spilled into the environment could be as much as ten times the officially claimed amount (Moffat & Lindén, cited in Wikipedia, 2010e). Among the largest individual spills include the blowout of a Texaco offshore station which in 1980 dumped an estimated 400 million
Offiah E.I 47 barrels (64,000,000 m3) of crude into the Gulf of Guinea and Shell's Forcados Terminal tank failure which produced a spillage estimated at 580 million barrels (92,000,000 m3) (The Association for
Environmental Health and Sciences, cited in Wikipedia, 2010e). One source projects that the total amount oil in barrels spilled between 1960 and 1997 is upwards of 100 million barrels (16,000,000 m3) (Moffat & Lindén cited in Wikipedia, 2010e).
Oil spillage has a major impact on the ecosystem into which it is released. Immense tracts of the mangrove forests, which are especially susceptible to oil (this is mainly because it is stored in the soil and re-released annually with inundation), have been destroyed. An estimated 5-10% of Nigerian mangrove ecosystems have been wiped out either by settlement or oil. The rainforest which previously occupied some 7,400 km² of land has disappeared as well (Human Rights Watch, 1999).
Spills in populated areas often spread out over a wide area, taking out crops and aquacultures through contamination of the groundwater and soils. Though the consumption of dissolved oxygen by bacteria feeding on the spilled hydrocarbons also contributes to the death of fishes. In agricultural communities, often a year's supply of food can be destroyed by only a minor leak, debilitating the farmers and their families who depend on the land for their livelihood. Drinking water is also frequently contaminated, and sheens of oil are visible in many localized bodies of water. If the drinking water is contaminated, even if no immediate health effects are apparent, the numerous hydrocarbons and chemicals present in oil are highly carcinogenic. Although, people often do manifest sickness following consumption of polluted water. Offshore spills, which are usually much greater in scale, contaminate coastal environments and cause a decline in local fishing production. The decline in ecologic sustainability parallels the increase in oil production since operations began four decades ago. Furthermore, operating companies such as Shell have made public proposals for increasing production significantly in the near future which, because of the careless nature of oil operations in the Delta, will cause the environment to grow increasingly uninhabitable (Wikipedia, 2010e).
Offiah E.I 48
2.5.8 Natural Gas Flaring: Nigeria flares more natural gas associated with oil extraction than any other country on the planet, with estimates suggesting that of the 3.5 billion cubic feet (99,000,000 m3) of associated gas (AG) produced annually, 2.5 billion cubic feet (71,000,000 m3), or about 70% is wasted via flaring. This equals about 25% of the UK's total natural gas consumption, and is the equivalent to 40% of the entire African continent's gas consumption in 2001. All statistical data associated with gas flaring is notoriously unreliable, but AG wasted during flaring is estimated to cost
Nigeria US $2.5 billion on a yearly basis (Friends of the Earth, cited in Wikipedia, 2010e).
Wikipedia (2010e) maintained that the reason for this practice, which is generally agreed worldwide to be wasteful both economically and environmentally, is that in order to maximize production of crude oil, the associated gas accompanying it is often burned off. Even though companies operating in
Nigeria also harvest natural gas for commercial purposes, they prefer to extract natural gas from deposits where it is found in isolation, this isolated gas is known as non-associated gas. This occurs because it is costly to separate commercially viable associated gas from the oil. Therefore the AG found with oil is often burned off in order to increase crude production.
Historically, gas flaring began simultaneously with oil extraction in the 1960s by Shell-BP. Although, the British government subsequently acknowledged that the flaring was unacceptable, it was allowed to continue without any real efforts to change infrastructure and prevent the waste of the gas. This is in contrast to Britain's policies on gas flaring in their own territory, where gas flaring has been reduced to a minimum. In fact, in western Europe 99% of associated gas is used or re-injected into the ground.
Gas flaring is generally discouraged and condemned by the international community, as it contributes greatly to climate change. This ironically can display its most devastating effects in developing countries like Nigeria, and particularly in the semi-arid Sahel regions of sub-Saharan Africa. The Niger
Delta's low-lying plains are also quite vulnerable as they lie only a few meters above sea-level
(Wikipedia, 2010e).
Offiah E.I 49
Gas flaring in Nigeria is also highly inefficient and releases large amounts methane, which has very high global warming potential. The methane is accompanied by the other major greenhouse gas, carbon dioxide, of which Nigeria was estimated to have emitted more than 34.38 million tons in 2002, accounting for about 50% of all industrial emissions in the country and 30% of the total CO2 emissions. As flaring in the west has been minimized, in Nigeria it has grown proportionally with oil production (Climate Justice Programme and Environmental Rights Action/Friends of the Earth
Nigeria, cited in Wikipedia, 2010ea). The volume of associated gas produced and therefore burnt off, is directly linked to the amount of oil produced. So even though the percentage of gas flared from 92% in 1981 has fallen to around 70%, the overall amount of flared gas has increased from 2.1 billion cubic feet (59,000,000 m3) to 2.5 billion cubic feet (71,000,000 m3) (Wikipedia, 2010e).
It seems that the international community, the Nigerian government, and the oil corporations are all in agreement that gas flaring has a negative impact and needs to be stopped. However, in reality, efforts at stemming gas flaring have been slow to be implemented. The practice of gas flaring as it has been allowed since oil production began under British, has become set in stone, and would be costly to overhaul to reduce flaring. As a result, little is done by oil companies. This is in spite of the fact that gas flaring in Nigeria has technically been illegal since 1984 under section 3 of the "Associated Gas
Reinjection Act". However, none of the regulations stipulated by this document have ever been made public (Wikipedia, 2010e).
Gas flares can have potentially harmful effects on the health and livelihood of the communities in their vicinity, as they release a variety of poisonous chemicals. Just some of combustion by-products include nitrogen dioxides, sulphur dioxide, volatile organic compounds like benzene, toluene, xylene and hydrogen sulphide, as well as carcinogens like benzapyrene and dioxin. Humans exposed to such substances can suffer from a variety of respiratory problems, which have been reported amongst many children in the Delta but have apparently gone uninvestigated. These chemicals can aggravate asthma, cause breathing difficulties and pain, as well as chronic bronchitis. Of particular note is that the chemical benzene, which is known to be emitted from gas flares in undocumented quantities, is well researched as being a causative agent for leukaemia and other blood-related diseases. A study done by
Offiah E.I 50
Climate Justice estimates that exposure to benzene would result in eight new cases of cancer yearly in
Bayelsa State alone (Climate Justice Programme and Environmental Rights Action/Friends of the
Earth Nigeria, cited in Wikipedia, 2010e).
Often gas flares are located close to local communities, and regularly lack adequate fencing or protection for villagers who may risk nearing the tremendous heat of the flare in order to carry out their daily activities. Many of these communities claim that nearby flares cause acid rain which corrodes their homes and other local structures, many of which have metal roofing. However, whether or not the flares contribute to acid rain is debatable, as some independent studies conducted have found that the sulphur dioxide and nitrous oxide content of most flares was insufficient to establish a link between flaring and acid rain. Other studies from U.S. Energy Information Administration (EIA) report that gas flaring is, "major contributor to air pollution and acid rain". Flares which are often older and inefficient are rarely relocated away from villages, and are known to coat the land and communities in the area with soot and damage adjacent vegetation. Almost no vegetation can grow in the area directly surrounding the flare due to the tremendous heat it produces (Human Rights Watch,
1999). In November 2005 a judgment by, "the Federal High Court of Nigeria ordered that gas flaring must stop in a Niger Delta community as it violates guaranteed constitutional rights to life and dignity.
In a case brought against the Shell Petroleum Development Company of Nigeria (Shell), Justice C. V.
Nwokorie ruled in Benin City that the damaging and wasteful practice of flaring cannot lawfully continue." (Wikipedia, 2010e).
2.5.9 Impacts on Mangrove Forests: Vegetation in the Niger River Delta consists of extensive mangrove forests, brackish swamp forests, and rainforests. The large expanses of mangrove forests are estimated to cover approximately 5,000 to 8,580 km² of land (Nwilo & Olusegun, 2007). Mangroves remain very important to the indigenous people of Nigeria as well as to the various organisms that inhabit these ecosystems (Wikipedia, 2010f). Human impact from poor land management upstream coupled with the constant pollution of petroleum has caused five to ten percent of these mangrove forests to disappear. The volatile, quickly penetrating, and viscous properties of petroleum have wiped out large areas of vegetation. When spills occur close to and within the drainage basin, the hydrologic
Offiah E.I 51 force of both the river and tides force spilled petroleum to move up into areas of vegetation
(Wikipedia, 2010f).
Mangrove forests are included in a highly complex trophic system. If oil directly affects any organism within an ecosystem, it can indirectly affect a host of other organisms. These floral communities rely on nutrient cycling, clean water, sunlight, and proper substrates. With ideal conditions they offer habitat structure, and input of energy via photosynthesis to the organisms they interact with. The effects of petroleum spills on mangroves are known to acidify the soils, halt cellular respiration, and starve roots of vital oxygen (Limson, 2007).
An area of mangroves that has been destroyed by petroleum may be susceptible to other problems.
These areas may not be suitable for any native plant growth until bacteria and microorganisms can remediate the conditions. A particular species of mangrove, Rhizophora racemosa lives higher in the delta system. As the soils supporting R. racemosa become too toxic, a non-native invasive species of palm, Nypa fruticans, quickly colonizes the area. This invasive species has a shallower root system that destabilizes the banks along the waterways, further impacting sediment distribution lower in the delta system. N. fruticans also impedes navigation and decreases overall biodiversity. In places where
N. fruticans has invaded, communities are investigating how the palm can be used by local people
(Nigerian Conservation Foundation, 1996 cited in Wikipedia, 2010f).
According to Wikipedia (2010f) the loss of mangrove forests is not only degrading life for plants and animals, but for humans as well. These systems are highly valued by the indigenous people living in the affected areas. Mangrove forests have been a major source of wood for local people. They also are important to a variety of species vital to subsistence practices for local indigenous groups, who unfortunately see little to none of the economic benefits of petroleum. Mangroves also provide essential habitat for rare and endangered species like the manatee and pygmy hippopotamus. Poor policy decisions regarding the allocation of petroleum revenue has caused political unrest in Nigeria
(Okereke et el 2007). This clash among governing bodies, oil corporations, and the people of Nigeria has resulted in sabotage to petroleum pipelines, further exacerbating the threat to mangrove forests.
Offiah E.I 52
The future for mangrove forests and other floral communities is not all negative. Local and outside groups have provided funds and labour to remediate and restore the destroyed mangrove swamps. The federal government of Nigeria established the Niger Delta Development Commission (NDDC) in 2000 which aims to suppress the environmental and ecological impacts petroleum has had in the region.
Governmental and nongovernmental organizations have also utilized technology to identify the source and movement of petroleum spills (Nwilo et el, 2007).
According to Wikipedia (2010f) the use of biological remediation has also been implemented in areas of the delta to detoxify and restore ecosystems damaged by oil spills. Bioremediation involves biological components in the remediation or cleanup of a specific site. A study conducted in Ogbogu located in one of the largest oil producing regions of Nigeria has utilized two plant species to clean up spills. The first stage of cleanup involves Hibiscus cannabinus, a plant species indigenous to West
Africa. H. cannabinus is an annual herbaceous plant originally used for pulp production. This species has high rates of absorbency and can be laid down on top of the water to absorb oil. The oil saturated plant material is then removed and sent to a safe location where the hydrocarbons can be broken down and detoxified by microorganisms. The second stage of bioremediation involves a plant known as
Vetiveria zizanioides, a perennial grass species. V. zizanioides has a deep fibrous root network that can both tolerate chemicals in the soil and can also detoxify soils through time requiring little maintenance.
The people of Ogbogu hope to use these methods of bioremediation to improve the quality of drinking water, soil conditions, and the health of their surrounding environment (Limson, 2007).
Within the Imo State of Nigeria, a study was conducted in the city of Egbema to determine the microfloral communities present at the site of an oil spill. These microorganisms have the ability to break down the oil, decreasing the toxic conditions. This is recognized as another method of bioremediation and scientists are trying to determine whether the properties these microorganisms possess can be utilized for the cleanup of future spills (Okereke et el, 2007). However bleak this situation may seem for the Niger Delta region there are clearly alternatives that can be implemented to save it from future contamination. Satellite imagery combined with the use of Geographical
Information Systems (GIS) can be put to work to quickly identify and track spilled oil. To hasten the
Offiah E.I 53 cleanup of spills, regional cleanup sites along the problem areas could help contain spills more quickly. To make these tasks feasible more funding must be provided by the stakeholders of the oil industry. Nongovernmental organizations will keep fighting the damaging effects of oil, but will not win the battle alone (Nwilo et el, 2007).
2.5.10 Impacts on Fisheries: The fishing industry is an essential part of Nigeria’s sustainability because it provides much needed protein and nutrients for people, but with the higher demand on fishing, fish populations are declining as they are being depleted faster than they are able to restore their number. Fishing needs to be limited along the Niger River and aquacultures should be created to provide for the growing demand on the fishing industry. Aquaculture allows for fish to be farmed for production and provide more jobs for the local people of Nigeria (Wikipedia, 2010f).
Overfishing is not the only impact on marine communities. Climate change, habitat loss, and pollution are all added pressures to these important ecosystems. The banks of the Niger River are desirable and ideal locations for people to settle. The river provides water for drinking, bathing, cleaning, and fishing for both the dinner table and trading to make a profit. As the people have settled along the shores of the rivers and coasts, marine and terrestrial habitats are being lost and ecosystems are being drastically changed. The shoreline along the Niger River is important in maintaining the temperature of the water because the slightest change in water temperature can be fatal to certain marine species. Trees and shrubs provide shade and habitat for marine species, while reducing fluctuation in water temperature
(Molles, 2005).
The Niger River is an important ecosystem that needs to be protected, for it is home to 36 families and nearly 250 species of fish, of which 20 are endemic, meaning they are found nowhere else on Earth
(World Wildlife Fund, 2006). With the loss of habitat and the climate getting warmer, every prevention of temperature increase is necessary to maintain some of the marine environments. Other than restoring habitat, pollution can also be reduced. Problems such as pesticides from agricultural fields could be reduced if a natural pesticide was used, or the fields were moved farther away from the local waterways. Oil pollution can be lowered as well; if spills were reduced then habitat and
Offiah E.I 54 environmental impacts could be minimized. By limiting the devastation caused by disturbances to the marine environment, such as pollution, overfishing, and habitat loss, the productivity and biodiversity of the marine ecosystems would increase (Wikipedia, 2010f).
2.5.11 Impact of Oil Industry on Human Rights: Repression of protest and government corruption is one of the greatest threats facing the people of the Niger Delta. The Nigerian government has total control over property rights and they have the authority to seize any property for use by the oil companies. A majority of every dollar that comes out of the ground in the delta goes to the government of Nigeria. As a result of the enormous amounts of sweet light crude that comes out of the delta every day Nigeria has the second largest GDP in Sub-Saharan Africa (Boele et el, 2001). But despite the wealth flowing into the nation from oil revenues many of Nigeria’s socio-economic factors are worse at present than they were 30 years ago (Carter, 2007). According to the World Bank, most of
Nigeria’s oil wealth gets siphoned off by 1% of the population (Junger, 2007). Corruption in the government is rampant, in fact since 1960 it is estimated that 300 to 400 billion dollars has been stolen by corrupt government officials (Junger, 2007). The corruption is found at the highest levels as well.
For example a former inspector general of the national police was accused of stealing 52 million dollars. He was sentenced to six years in prison for a lesser charge (Junger, 2007).
The situation is very bad and the people have engaged in protests. The problem is many of these protest have been met with unmitigated violence. One example of this occurred in February 2005.
There was a protest at Chevrons Escravos oil terminal in which soldiers opened fire on the protestors.
One man was killed and 30 others were injured. The soldiers claim that the protestors were armed, a claim the protestors deny (Amnesty International, 2006). Another, more extreme example happened in
1994. The Nigerian military moved into a region called Ogoniland in force. They razed 30 villages, arrested hundreds of protestors, and killed an estimated 2,000 people (Junger, 2007).
One of the protestors they arrested as earlier noted was a man named Ken Saro-Wiwa. Ken Saro-Wiwa was a Nigerian TV producer, writer and social activist. In 1990 he founded the Movement for the
Survival of the Ogoni People (MOSOP). Ken wrote and spoke out about the rampant corruption in the
Offiah E.I 55
Nigerian government and he condemned Shell and British Petroleum. He was arrested by the Nigerian
Government and imprisoned for 17 months. Then in a show trial Ken and eight others were condemned to death. He and the others were hung in 1995 and he was buried in an unmarked common grave (Books and Writers, 2003).
2.5.12 Poverty and Chronic Underdevelopment: The people of the delta states live in extreme poverty even in the face of great material wealth found in the waters by their homes. According to
Amnesty International (2006) 70% of the six million people in the Niger River Delta live off of less than 1$ US per day. For many people this means finding work in a labour market, which is in many instances hostile to them. Much of the labour in the past has been imported. To a growing degree the labour force for the oil companies is more and more coming from Nigeria. But discrimination is rampant and for the most part, local people were discriminated against (Boele et el, 2001). This leads to a situation where the men in the community have to search for temporary employment. This has two negative effects on the community. First it takes the men out of the community as they go in search of work. The second is the nature of temporary employment sets up unsustainable spending habits (Boele et el, 2001). They earn some money and spend it thinking it will be easy to earn more, when in many cases this does not turn out to be the case.
As the government officials siphon off all the money generated from oil sales the infrastructure suffers.
Most of the villages do not have electricity or even running water (Egan, 1999). They do not have good access to schools or medical clinics. For many, even clean drinking water is difficult to come by
(Junger, 2007). The deterioration of the infrastructure in the delta states is so severe it is even a problem in the more urban areas. One example of this is the airport at Port Harcourt. Part of a fence was not properly maintained and an Air France flight hit a herd of cattle on the runway. The airport was closed and is still not open (Junger, 2007).
The leadership of the Niger Delta region are responsible for most of the underdevelopment in the region. There is large scale corruption amongst the elected leaders especially governors and the leaders have helped sponsor the militants groups kidnapping innocent people and sabotaging efforts by the
Offiah E.I 56 federal government for any infrastructure development. Indicted corrupt leaders were also cheered by some of the Niger Delta people (Wikipedia, 2010e).
2.6 Oil History and Politics: Wikipedia (2010e) observed that prior to Nigeria’s official amalgamation into a singular nation by the military forces of the British Empire in 1914, the territory of Nigeria was a loose collection of autonomous states, villages, and ethnic communities. Many of these established themselves as pillars of art, trade, and politics in West Africa as late as the 1800s; four of these cultural entities, the Hausa-Fulani, the Igbo, the Yoruba and the Efik grew extremely prominent in the region before the arrival of foreigners, dictated British colonial policies, and dominate national politics in Nigeria to this day. The modern Hausa and Fulani societies in northern Nigeria are the cultural successors of the Sokoto Caliphate, a theocratic state founded by Muslim reformer empire- maker Uthman dan Fodio in 1817. Geographically isolated in the north, the Caliphate was governed by
Islamic laws as prescribed by dan Fodio's Kitab al-Farq and maintained greater links commercially and culturally to North Africa and the Arab states than to West Africa and the Atlantic.
By contrast, the Yoruba, the Igbo and the Efik in the south had regularly experienced contact with
Europeans since at least the 1500s. A minority of southerners converted to Christianity even prior to the establishment of permanent British control; the majority followed traditional indigenous religions, worshipping myriad deities with vast domains spanning both cosmic and terrestrial spheres. Coastal
Nigerians established thriving trade both regionally and abroad, fashioning the coast into a hub for products like palm oil, a good sought after by rapidly industrializing Europe, while also serving as key source for the slave trade prior to its international banning (the region came to be known as the Slave
Coast as a result).
According to Wikipedia (2010e), the Niger Delta region, which is roughly synonymous with the Niger
Delta province in location and the contemporary heart of the petroleum industry, is and was a zone of dense cultural diversity and is currently inhabited by roughly forty ethnic groups speaking an estimated
250 dialects. Some of the more relevant ethnic groups in the western part of the Niger Delta region include the Ijaw, Itsekiri, and Ogoni. The Ijaw, the fourth most populous tribe in Nigeria and by far the
Offiah E.I 57 largest in the Delta region, lived during late medieval times in small fishing villages within the inlets of the delta; however by the sixteenth century, as the slave trade grew in importance, Ijaw port cities like Bonny and Brass developed into major trading states which served as major exporters of fish and other goods regionally. Other states such as those of Itsekiri domain of Warri sprang up at this time as well.
The eastern Niger Delta region has the Efik people (Annang / Efik / Ibibio who are all related with a common language and ancestors were all referred to as Efik or Calabar people in early Nigerian history). Their capital city at Calabar served as the major trading and shipping center during the pre- colonial and colonial period. Calabar also served first capital of Nigeria and the point of entry of
Western religion and Western education into south-eastern Nigeria. The combined population of the
Ibibio, Annang and Efik people is the fourth largest language group in Nigeria.
2.6.1 The Colonial Legacy (1800s-1960s): Even before the consolidation of British control over all of present day Nigeria's borders in 1914 from the protectorates of Southern and Northern Nigeria,
British forces had begun imposing drastic political and economic policies on the Nigerian people which would lead to important consequences in the future. Originally this was done primarily through the government-owned Royal Niger Company. The company was crucial in securing most of Nigeria's major ports and monopolized coastal trade; this resulted in the severing of ties which linked the area to the flourishing West African regional trade network, in favour of the exportation of cheap natural resources and cash crops to industrializing nations. Most of the population eventually abandoned food production for such market-dependent crops (peanuts and cotton in the north, palm oil in the east, and cocoa in the west). From the beginning divide and rule tactics were employed by both traders and administrators by highlighting ethno-religious differences and playing groups against one another.
After the 1914, the north was permitted a system of indirect rule under authoritarian leaders, while in the south the British exercised control directly (Okonta & Douglas, 2001).
Offiah E.I 58
Interest in Nigerian oil originated in 1914 with an ordinance making any oil and mineral under
Nigerian soil legal property of the Crown. By 1938 the colonial government had granted the state- sponsored company, Shell (then known as Shell D'Arcy) monopoly over exploration of all minerals and petroleum throughout the entire colony (Okonta & Douglas, 2001). Commercially viable oil was discovered by Shell roughly 90 km west of the soon-to-be oil capital of Port Harcourt at Oloibiri (now in Bayelsa State) in 1956; initially a 50-50 profit sharing system was implemented between the company and the government. Until the late 1950s concessions on production and exploration continued to be the exclusive domain of the company, then known as Shell-British Petroleum.
However, other firms became interested and by the early 1960s Mobil, Texaco, and Gulf had purchased concessions (Wikipedia, 2010e).
In October 1960 Nigeria gained full independence from Britain with the British monarch continuing to preside as Head of State, but the country quickly altered its relationship with its former colonizers by declaring Nigeria a republic of three federated states (the Eastern, Western and Northern Regions). But the flaring of ethnic tensions assured that this new republic would be short-lived, as on January 15,
1966, a small group of army officers consisting mostly south-eastern Igbos, staged a successful coup d'etat against the civilian government. This federal military government which assumed power under
General Aguiyi-Ironsi, was unable to quiet ethnic tensions or produce a constitution acceptable to all sections of the country. In fact, its efforts to abolish the federal structure exacerbated the growing unrest and led to another coup, led by largely northern officers in July of the same year. This second coup established the regime of Major General Yakubu Gowon. Subsequently, the massacre of thousands of Igbos in the north prompted hundreds of thousands to return to the southeast, where increasingly strong Igbo secessionist sentiment emerged under the leadership of the Igbo military governor Lieutenant Colonel Chukwuemeka Odumegwu Ojukwu (Wikipedia, 2010e).
With tensions stoked between the Eastern region and Gowon's federal government, on 4–5 January
1967, in compliance with Ojukwu's desire to meet for talks only on neutral soil, a summit attended by
Gowon, Ojukwu and other members of the Supreme Military Council was held at Aburi in Ghana, the stated purpose of which was to resolve all outstanding conflicts and establish Nigeria as a
Offiah E.I 59 confederation of regions. The outcome of this summit was the Aburi Accord, the differing interpretations of which would soon cause Ojukwu to declare Biafran independence and plunge
Nigeria into civil war.
2.6.2 Implications and Causes of Civil War (1966-1970): Igbo secessionism arose in part from political isolation during the years following independence, as the Eastern Region increasingly found itself having to compete against both the Yoruba-dominated west and Hausa-dominated north.
However, since the southeast encompassed most of the petroleum-rich Niger Delta, the prospect emerged of the Eastern Region gaining self-sufficiency and increasing prosperity. The exclusion of easterners from power caused many in the east to fear that oil revenues would be used to benefit areas in the north and west rather than their own. The desire to accrue profits from oil revenues combined with ethnic tensions acted as a catalyst for the Igbo-spearheaded secession. Additionally, despite his denials in later years, it appears that Ojukwu's insistence on secession at the time was heavily influenced by his knowledge of the extent of the area's oil reserves (Wikipedia, 2010e).
On top of scores of deaths, the war had a largely negative impact on the oil industry. Strife caused production of crude to drop significantly, particularly in Biafra. Total crude output decreased from 420 million barrels per day (67,000,000 m3/d) in 1966 at the start of the war, to only 140,000 bbl/d (22,000 m3/d) in 1968. Shell alone saw a drop from 367,000 bbl/d (58,300 m3/d) in 1966, to 43,000 in 1968.
And in addition to concerns about production, oil companies began experiencing uncertainty as to the future of their investments depending on who prevailed in the war. This led to relations between oil companies and the federal government becoming strained, with the government at one point accusing the oil company Safrap (now Total Fina Elf, but Elf until 1974) of favouring Biafra and enlisting the aid of France for the Biafran cause. Shell, the other major holder of concessions in the southeast, was concerned but placated and limited politically by Britain's staunch support of the Nigerian government in the war effort (Wikipedia, 2010e).
Offiah E.I 60
Despite oil's prominent role in national affairs, up to this time, the Nigerian federal government had only limited involvement in the oil industry, and the government confined its financial involvement in the oil industry to taxes and royalties on the oil companies. The companies were subsequently able to set their own price on the petroleum they extracted, and dominated petroleum to such a point that laws governing the oil sector were having a negative effect on Nigerian interests. However, event during the conflict with Biafra would force changes to the relationship between federal government and the petroleum industry. Gowon's military government instituted the 1969 Petroleum Decree which dismantled the existing revenue allocation system that had divided revenue from oil taxes equally between federal and state government, instead favouring an allocation formula in which the federal government controlled the dispensation of revenues to the states (Wikipedia, 2010e).
After the loss of 300,000 lives, the war concluded in 1970 and resulted in a victory for the Nigerian state, as the secessionist regions were subsequently brought back into the Nigerian fold. However, the former Eastern Region had been split into two new states, Rivers and South-Eastern (now Cross River) in order to discourage lingering ideas of independence. Following the war, Delta peoples and their lands, with their vast petroleum reserves came to be seen by many in the Nigerian government as colonies of sorts. As a result these groups, notably the Igbo, have to an extent been marginalized in
Nigerian politics since this time, whilst Nigeria's long line of military rulers have reaped immense profits from their land. Indeed, Nigeria has not had an Igbo head of state since the war ended
(Wikipedia, 2010e).
2.6.3 Industry Nationalization (1970-1979): In May 1971 the Nigerian federal government, then under the control of General Yakubu Gowon, nationalized the oil industry by creating the Nigerian
National Oil Corporation via a decree. Following the war with Biafra, the government felt it necessary to secure and gain more control over the oil industry. Nationalization of the oil sector was also precipitated by Nigeria's desire to join OPEC, which required that member states acquire 51% stake and become increasingly involved in the oil sector. Although the Nigerian government had maintained involvement in the industry prior to 1971, this was accomplished mainly through business deals on concessions of the foreign firms in operation. The creation of the Nigerian National Oil Corporation
Offiah E.I 61 made government participation in the industry legally binding. The federal government would continue to consolidate its oil involvement throughout the next several decades (Wikipedia, 2010e).
However, it was during the years of Gowan and his successors Murtala Mohammed and Olusegun
Obasanjo known officially as the Heads of the Federal Military Government of Nigeria, who ruled amidst the oil boom of the 1970s that the political economy of petroleum in Nigeria truly became characterized by endemic patronage and corruption by the political elites, which plagues the nation to this day. At both state and federal government levels, power and wealth had typically been monopolized by select lobby groups who maintain a strong tendency to 'look after their own' by financially rewarding their political supporters. At the state or community level this means that interest groups in power will reward and protect their own; this is typically based on ethnic/tribal or religious affiliation of the interest group. The heavy patronage based on tribal affiliation had always fuelled ethnic unrest and violence throughout Nigeria, but particularly in the Niger Delta states, where the stakes for control of the immense oil resources are very high. At the federal level, political elites have utilized patronage to consolidate power for the ruling government, not only by rewarding their political friends in the federal government, but also by paying off major interest groups at the state or tribal level in order to elicit their cooperation. Inevitably these financial favours were distributed unequally and inefficiently, resulting in concentration of wealth and power in the hands of a small minority (The
Political Economy of Oil cited in Wikipedia, 2010e).
Nigeria was ranked by the Corruption Perceptions Index as 121, out of a total 180 countries, and one of Sub Saharan Africa's least corrupt states. Following the Nigerian National Oil Corporation's genesis, the Nigerian government persisted in garnering control over oil revenues, in 1972 it declared that all property not currently owned by a foreign entity is legally the property of the government, which gained jurisdiction of the sale and allocation of concessions to foreign investment. The military regime oversaw the implementation of a number of other important milestones related to oil: in 1974 participation in oil industry by government increases to 55 percent. In 1975 decree 6 increases federal government share in oil sector to 80%, with only 20% going to states. In 1976 first exploration and development venture by Nigerian National Oil Corporation undertaken and drills to uncover
Offiah E.I 62 commercial quantities of petroleum off-shore. In 1978 perhaps most importantly, the federal government created the Land Use Act which vested control over state lands in control of military governors appointed by the federal military regime, and eventually led to Section 40(3) of the 1979 constitution which declared all minerals, oil, natural gas, and natural resources found within the bounds of Nigeria to be legal property of the Nigerian federal government (Okonta & Douglas, 2001).
Also in 1979, in an effort to establish further control over the industry, the government merges and restructures the Nigerian National Oil Corporation and the Ministry of Petroleum to form the Nigerian
National Petroleum Corporation, an entity which would exert more power over the allocation and sale of concessions than the Nigerian National Oil Corporation. By 1979, the Nigerian National Petroleum
Corporation had also gained 60 percent participation in the oil industry (Wikipedia, 2010e).
2.6.4 Attempted democracy and debt (1979-1983): Despite the vast revenues accrued by Gowon and his heirs, the junta still managed to succumb to the demands of the civilian population, and in 1979 military head of state Olusegun Obasanjo handed over power to elected National Party of Nigeria
(NPN) candidate Shehu Shagari. This event coincided with the declaration of Nigeria's Second
Republic. At this juncture, the oil producing states of the Niger Delta were accounting for 82% of all federal government revenue but the population of these areas received very little compensation and demands for adequate reimbursement for the black gold extracted from their land could be heard at this time. Overall, petroleum accounted for 96% of all government external revenue but a mere 27% of the nation's GDP. However, the conversion to democracy would not improve the situation (Wikipedia,
2010e).
A 1982 Revenue Act implemented by the Shagari government was eventually modified by yet another military regime in 1984 via Decree 36 which reduced government share of oil revenue from 80% to
55%. 32.5% go to states and 10% to local governments (Human Rights Watch, 1999). The remaining
1.5% was earmarked as a special fund to develop oil producing areas, however, it was during the
Shagari regime that corruption in Nigerian governance reached its zenith and capital flight out of
Nigeria peaked, while the oil-producing peoples continued to receive little to no share of the oil profits.
Offiah E.I 63
Additionally, 1980 saw oil-generated revenues attain an all-time climax of US $24.9 billion but
Nigeria still managed an international debt of $9 billion (Wikipedia, 2010e).
Shagari's NPN government was viewed by the majority of Nigerians as incorrigibly corrupt by the time the national elections of 1983 came about. Shagari and his subordinates steadily transformed
Nigeria into a police state where Nigerian military and police forces were permitted to utilise force quite liberally in order to control the civilian population. Such repressive measures were employed to ensure victory in the forthcoming elections, and this outcome was achieved largely through the bankrupting of the federal government's treasury (Soyinka, Wole in Wikipedia, 2010e).
Another disturbing trend had also been gaining steam in Nigeria since the early 1970s: a steep drop in agricultural production correlating roughly with the rise in federal revenues from petroleum extraction.
Whereas previously Nigeria had been the world's lead exporter of cocoa, production of this cash crop dropped by 43%, while productivity in other important income generators like rubber (29%), groundnuts (64%), and cotton (65%) plummeted as well between 1972 and 1983 (Okonta & Douglas).
The decline in agricultural production was not limited to cash crops amid the oil boom, and national output of staple foodstuffs fell. This situation contrasts to Nigeria in 1960 just after independence, when despite British underdevelopment, the nation was more or less self-sufficient in terms of food supply, while crops made up 97% of all revenue from exports. The drop in production was so substantial that by the early 1980s the NPN government was forced to implement a now notorious import license scheme which essentially involved Nigeria, for the first time in its history, importing basic food items. However, as Nigerian activist and Nobel Laureate Wole Soyinka asserts, "the import license scam that was used by the party as a reward and enticement for party loyalists and would-be supporters cost the nation billions of dollars...while food production in the country virtually ceased"(Wikipedia, 2010e).
Offiah E.I 64
2.6.5 Return to Military Rule and Electoral Abortion (1983-1993): For these reasons, seizure of power by General Muhammadu Buhari a short time after the NPN government was fraudulently re- elected was initially perceived as a positive development by civilians. Buhari charged out of the gate in
December 1983, declaring himself Head of the Supreme Military Council of Nigeria, he condemned the civilian government's blatant corruption and instituted programs supposedly designed to eliminate the disease of corruption. However, these measures were largely transparent and the looting of federal coffers by Nigeria's rulers continued largely unabated "as Shagari's officers - both within party and government - left the country, came in and out as they pleased, while Burahi's tribunal sentence opposition figures to spells of between a hundred and three hundred years in prison for every dubious kind of crime"(Okonta & Douglas, 2001). The Buhari government neglected to punish even Shagari himself, a consistent trend in Nigerian's long line of dictariorial rulers, who almost universally been spared any kind of justice (Soyinka, Wole cited in Wikipedia, 2010e).
In 1985, another general, this time General Ibrahim Babangida, stole power and again alleged that his predecessors were corrupt violators of human rights and promised to rectify the situation, committing to a return to democracy by 1990. Nigeria had been saddled with a crushingly large international debt at this point. This was because, despite over 101 billion US dollars having been generated by the oil industry between 1958 and 1983, nearly all of these funds had been siphoned into the private bank accounts and the state sponsored pet projects maintained by the succession of Nigerian governmental elites (Okonta & Douglas, 2001).
Immediately prior to Babangida's rise to power, which was viewed by some as having been orchestrated by international oil and banking interests, the International Monetary Fund was exerting increasingly acute pressure on the Nigerian government to repay its massive debts, of which 44% of all federal revenue was already servicing (Okonta & Douglas, 2001). Therefore, it was unsurprising when
Babangida implemented the IMF's Structural Adjustment Program in October 1986 in order to facilitate debt repayment. The SAP was extremely controversial while it was in effect between 1986 and 1988. While it did permit Nigerian exports to become more competitive internationally and spurred a degree of economic growth, the SAP also incurred a dramatic drop in real wages for the
Offiah E.I 65 majority of Nigerians. This, combined with major cuts to important public services, incited public unrest so extreme that Babangida's Armed Forces Ruling Council was obliged to partially reverse the
SAP initiatives and return to inflationary economic policies. Babangida's rule also oversaw the annihilation of the Nigerian economic middle class, and Nigeria's entry to the Organization of the
Islamic Conference, despite Muslims accounting for less than 50% of the Nigerian populace
(Wikipedia, 2010e).
The 1980s military juntas conducted several attempted re-organisations of the Nigerian National
Petroleum Corporation (NNPC) to increase its efficiency. However, according to most sources by the early 1990s the NNPC was characterized by chronic inefficiency and waste. Red tape and poor organization were standard, with the NNPC being divided into several sub-entities, each fulfilling a particular function. This is despite the NNPC's growing participation in the industry, including development and exploration of numerous off-shore wells. As a result, the functionality of the industry was dependent on foreign corporations, not the NNPC (NigeriaBusinessInfo.com cited in Wikipedia,
2010e).
The sudden jump in oil prices caused by the First Gulf War in 1990 and 1991, as most researchers confirm, was at best squandered. The Babangida junta had been widely accused of "mismanaging" the oil windfall from the Gulf War price jump, which accounted for about $12.5 billion in revenues.
Another alleges that the federal government siphoned off about $12.2 billion between 1988 and 1994 into private accounts or expenditures, "clandestinely undertaken while the country was openly reeling with a crushing external debt" (Okonta & Douglas, 2001).
Under these circumstances, Babangida eventually allowed for nationwide elections on June 12, 1993.
These elections were declared universally free and fair (at least in comparison to past elections) by all major international election monitors, and the eventual winner of the presidential race was the Chief
M.K.O. Abiola of the Social Democratic Party (SDP). However, the military regime cynically pronounced the election, in which fourteen million Nigerians participated, to be null and void due to
"electoral irregularities". The Nigerian people took to the streets in large numbers to protest the
Offiah E.I 66 election's annulment. As civil unrest continued, Babangida was forced to cede power to the caretaker government of Ernest Shonekan (Wikipedia, 2010e).
2.6.6 The Environment of Crisis in Ogoniland (1992-1995): Shonekan's interim government would be short-lived, as on date, Babangida's former Chief of Army Staff and Minister of Defence
Sani Abacha overthrew the caretaker regime and installed himself as Head of State. Popular opposition to the junta was widespread and public demonstrations were taking place on a regular basis.
Immediately upon taking power, Abacha commenced the brutal repression of these subversive elements which would make his tenure notorious on a global basis.
Throughout the early 1990s such popular unrest grew steadily, particularly in the Niger Delta region, where various ethnic groups began demanding compensation for years of ecological damage as well as control over their land's oil resources. This unrest manifested itself at the outset as peaceful activist organisations that united their members on the basis of ethnicity. One of the most prominent of these organisations to emerge in the region was the Movement for the Survival of the Ogoni People
(MOSOP). The group declared that the Ogoni people, a small minority in Rivers state of Nigeria, were slowly being annihilated as the arable terrain of their homeland (known as Ogoniland) was degraded by pollution from oil production by Chevron and primarily Shell.
The current conflict in the Niger Delta arose in the early 1990s over tensions between the foreign oil corporations and a number of the Niger Delta's minority ethnic groups who felt they were being exploited, particularly the Ogoni and the Ijaw. Ethnic and political unrest has continued throughout the
1990s and persists as of 2009 despite the conversion to democracy and the election of the Obasanjo government in 1999. Competition for oil wealth has fuelled violence between innumerable ethnic groups, causing the militarization of nearly the entire region by ethnic militia groups as well as
Nigerian military and police forces (notably the Nigerian Mobile Police). Victims of crimes were fearful of seeking justice for crimes committed against them because of growing impunity from prosecution for individuals responsible for serious human rights abuses, which had created a devastating cycle of increasing conflict and violence. The regional and ethnic conflicts were so
Offiah E.I 67 numerous that fully detailing each is impossible and impractical. However, there have been a number of major confrontations that deserve elaboration (Wikipedia, 2008).
Nigeria, after nearly four decades of oil production, had by the early 1980s become almost completely dependent on petroleum extraction economically, generating 25% of its GDP (this has since raised to
40% as of 2000). Despite the vast wealth created by petroleum, the benefits have been slow to trickle down to the majority of the population, who since the 1960s have increasingly been forced to abandon their traditional agricultural practices. Annual production of both cash and food crops dropped significantly in the latter decades of 20th century, cocoa production dropped by 43% (Nigeria was the world's largest cocoa exporter in 1960), rubber dropped by 29%, cotton by 65%, and groundnuts by
64% (Okonta & Douglas, 2001). In spite of the large number of skilled, well-paid Nigerians who have been employed by the oil corporations, the majority of Nigerians and most especially the people of the
Niger Delta states and the far north have become poorer since the 1960s (Wikipedia, 2008).
The Delta region has a steadily growing population estimated to be over 30 million people as of 2005, accounting for more than 23% of Nigeria's total population. The population density is also among the highest in the world with 265 people per kilometre-squared according to Niger Delta Development
Commission report. This population is expanding at a rapid 3% per year and the oil capital, Port
Harcourt, along with other large towns are growing quickly. Poverty and urbanization in Nigeria are on the rise, and official corruption is considered a fact of life. The resultant scenario is one in which there is urbanization but no accompanying economic growth to provide jobs. This has led to a section of the growing populace assisting in destroying the ecosystem that they require to sustain themselves
(Okonta & Douglas, 2001).
Ogoniland is a 404-square-mile (1,050 km2) region in the southeast of the Niger Delta basin.
Economically viable petroleum was discovered in Ogoniland in 1957, just one year after the discovery of Nigeria's first commercial petroleum deposit, with Royal Dutch Shell and Chevron Corporation setting up shop throughout the next two decades. The Ogoni people, a minority ethnic group of about half a million people who call Ogoniland home, and other ethnic groups in the region attest that during
Offiah E.I 68 this time, the government began forcing them to abandon their land to oil companies without consultation, and offering negligible compensation. This was further supported by a 1979 constitutional addition which afforded the federal government full ownership and rights to all Nigerian territory and also decided that all compensation for land would "be based on the value of the crops on the land at the time of its acquisition, not on the value of the land itself." The Nigerian government could now distribute the land to oil companies as it deemed fit (Human Rights Watch, 1999).
The 1970s and 1980s saw the government's empty promises of benefits for the Niger Delta peoples fall through, with the Ogoni growing increasing dissatisfied and their environmental, social, and economic apparatus rapidly deteriorating. The Movement for the Survival of the Ogoni People (MOSOP) was formed in 1992. MOSOP, spearheaded by Ogoni playwright and author Ken Saro-Wiwa, became the major campaigning organization representing the Ogoni people in their struggle for ethnic and environmental rights. Its primary targets, and at times adversaries, have been the Nigerian government and Royal Dutch Shell (Wikipedia, 2008).
Beginning in December 1992, the conflict between Ogonis and the oil infrastructure escalated to a level of greater seriousness and intensity on both sides. Both parties began carrying out acts of violence and MOSOP issued an ultimatum to the oil companies (Shell, Chevron, and the Nigerian
National Petroleum Corporation) which demanded some $10 billion in accumulated royalties, damages and compensation, and "immediate stoppage of environmental degradation", and negotiations for mutual agreement on all future drilling (Wikipedia, 2008).
The Ogonis threatened to embark on mass action to disrupt their operation if the companies failed to comply. By this act, the Ogoni shifted the focus of their actions from an unresponsive federal government to the oil companies engaged in their own region. The rationale for this assignment of responsibility was the benefits accrued by the oil companies from extracting the natural wealth of the
Ogoni homeland, and neglect from central government. The government responded by banning public gatherings and declaring that disturbances of oil production were acts of treason. Subsequently, oil
Offiah E.I 69 extraction from the territory slowed down to a trickle of 10,000 barrels per day (1,600 m3/d) (.5% of the national total).
Military repression escalated in May 1994. On May 21, soldiers and mobile policemen appeared in most Ogoni villages. On that day, four Ogoni chiefs (all on the conservative side of a schism within
MOSOP over strategy) were brutally murdered. Saro-Wiwa, head of the opposing faction, had been denied entry to Ogoniland on the day of the murders, but he was detained in connection with the killings. The occupying forces, led by Major Paul Okuntimo of Rivers State Internal Security, claimed to be 'searching for those directly responsible for the killings of the four Ogonis.' However, witnesses said that they engaged in terror operations against the general Ogoni population. Amnesty International characterized the policy as deliberate terrorism. By mid-June, the security forces had razed 30 villages, detained 600 people and killed at least 40. This figure eventually rose to 2,000 civilian deaths and the displacement of around 100,000 internal refugees (Haller et el, 2000).
In the same May 1994, nine activists from the movement who were known as 'The Ogoni Nine', among them were outspoken author and playwright Ken Saro-Wiwa, Saturday Dobee, Nordu Eawo,
Daniel Gbooko, Paul Levera, Felix Nuate, Baribor Bera, Barinem Kiobel, and John Kpuine
(Tripathi,2005). These men were arrested and accused of incitement to murder following the deaths of four Ogoni elders. Saro-Wiwa and his comrades denied the charges, but were imprisoned for over a year before being found guilty and sentenced to death by a specially convened tribunal, hand-selected by General Sani Abacha, on 10 November 1995. The activists were denied due process and upon being found guilty, were hanged by the Nigerian state.
Nearly all of the defendants' lawyers resigned in protest against the trial's cynical rigging by the
Abacha regime. The resignations left the defendants to their own means against the tribunal, which continued to bring witnesses to testify against Saro-Wiwa and his peers. Many of these supposed witnesses later admitted that they had been bribed by the Nigerian government to support the criminal allegations. At least two witnesses who testified that Saro-Wiwa was involved in the murders of the
Ogoni elders later recanted, stating that they had been bribed with money and offers of jobs with Shell
Offiah E.I 70 to give false testimony – in the presence of Shell’s lawyer. Shell claimed it asked the Nigerian government for clemency towards those found guilty, but its request was refused. However, Shell admitted having given money to the Nigerian military, who brutally tried to silence the voices which claimed justice." Saro-Wiwa had previously been a critic of the Royal Dutch Shell oil corporation
(Greenpeace, 2001).
The executions were met with an immediate international response. The trial was widely criticised by human rights organisations and the governments of other states, who condemned the Nigerian government's long history of detaining their critics, mainly pro-democracy and other political activists.
The Commonwealth of Nations, which had also pleaded for clemency, suspended Nigeria's membership in response. The United States, the United Kingdom, and the EU all implemented sanctions, but not on petroleum which is the Nigeria's main export product.
As of 2006, the situation in Ogoniland had eased significantly, assisted by the transition to democratic rule in 1999. However, no attempts were made by the government or an international body to bring about justice by investigating and prosecuting those involved in the violence and property destruction that had occurred in Ogoniland, (Human Rights Watch, 2002), although a class action lawsuit were brought against Shell by individual plaintiffs in the US (Corporate Social Responsibility News, 2002).
2.6.7 Ijaw-Itsekiri conflicts (1997): Wikipedia (2008) further maintained that the late 1990s saw an increase in the number and severity of clashes between militants of the Ijaw ethnic group, the largest in the entire Delta region with a population of over 7 million, and those of Itsekiri origin whose number is only about 450,000. The conflict between the two groups has been particularly intense in the major town of Warri. While the Ijaw and the Itsekiri have lived alongside each other for centuries, for the most part harmoniously, the Itsekiri were first to make contact with European traders, as early as the
16th century, and they were more aggressive both in seeking Western education and in using the knowledge acquired to press their commercial advantages; until the arrival of Sir George Goldie's
National Africa Company (later renamed the Royal Niger Company) in 1879, Itsekiri chieftains monopolized trade with Europeans in the Western Niger region. Despite the loss of their monopoly,
Offiah E.I 71 the advantages already held by the Itsekiri ensured that they continued to enjoy a superior position to that held by the Ijaw, breeding in the latter a sense of resentment at what they felt to be colonial favouritism towards the Itsekiri.
Wikipedia (2008) maintained that the departure of the British at independence did not lead, as might have been expected, to a decrease in tensions between the Ijaw and the Itsekiri. With the discovery of large petroleum reserves in the Niger Delta region in the late 1950s, a new bone of contention was introduced, as the ability to claim ownership of a given piece of land now promised to yield immense benefits in terms of jobs and infrastructural benefits to be provided by the petroleum companies.
Despite this new factor, rivalry between the Ijaw and the Itsekiri did not actually escalate to the level of violent conflict between the two groups until the late 1990s, when the death of General Sani Abacha in 1997 led to a re-emergence of local politics.
The issue of local government ward allocation proved particularly contentious, as the Ijaw felt that the way in which electoral wards were allocated ensures that their superior numbers would not be reflected in the number of wards controlled by politicians of Ijaw ethnicity. Control of the city of Warri, the largest metropolitan area in Delta State and therefore a prime source of political patronage, had been an especially fiercely contested prize. This gave birth to heated disputes among the Ijaw, the Itsekiri and the Urhobo about which of the three groups are "truly" indigenous to the Warri region, with the underlying presumption being that the "real" indigenes should have control of the levers of power, regardless of the fact that all three groups enjoy ostensibly equal political rights in their places of residence (Wikipedia, 2008).
2.6.8 Ijaw Unrest (1998-1999): The December 1998 All Ijaw Youths Conference crystallized the
Ijaws' struggle for petroleum resource control with the formation of the Ijaw Youth Council (IYC) and the issuing of the Kaiama Declaration. In it, long-held Ijaw concerns about the loss of control of their homeland and their own lives to the oil companies were joined with a commitment to direct action. In the declaration, and in a letter to the companies, the Ijaws called for oil companies to suspend operations and withdraw from Ijaw territory. The Ijaw Youth Council pledged “to struggle peacefully
Offiah E.I 72 for freedom, self-determination and ecological justice,” and prepared a campaign of celebration, prayer, and direct action, Operation Climate Change, which was to begin in December 28, 1998
(Wikipedia, 2008).
In December 1998, two warships and about15,000 Nigerian troops occupied Bayelsa and Delta states as the Ijaw Youth Congress (IYC) mobilized for Operation Climate Change. Soldiers entering the
Bayelsa state capital of Yenagoa announced they had come to attack the youths trying to stop the oil companies. On the morning of December 30, two thousand young people processed through Yenagoa, dressed in black, singing and dancing. Soldiers opened fire with rifles, machine guns, and tear gas, killing at least three protesters and arresting twenty-five more. After a march demanding the release of those detained was turned back by soldiers, three more protesters were shot dead including Nwashuku
Okeri and Ghadafi Ezeifile. The military declared a state of emergency throughout Bayelsa state, imposed a dusk-to-dawn curfew, and banned meetings. At military roadblocks, local residents were severely beaten or detained. At night, soldiers invaded private homes, terrorizing residents with beatings and women and girls with rape (Wikipedia, 2008).
On January 4, 1999 about one hundred soldiers from the military base at Chevron’s Escravos facility attacked Opia and Ikiyan, two Ijaw communities in Delta State. Bright Pablogba, the traditional leader of Ikiyan, who came to the river to negotiate with the soldiers, was shot along with a seven-year-old girl and possibly dozens of others. Of the approximately 1,000 people living in the two villages, four people were found dead and sixty-two were missing months after the attack. The same soldiers set the villages ablaze, destroyed canoes and fishing equipment, killed livestock, and destroyed churches and religious shrines.
Nonetheless, Operation Climate Change continued, and disrupted Nigerian oil supplies through much of 1999 by turning off valves through Ijaw territory. In the context of high conflict between the Ijaw and the Nigerian Federal Government (and its police and army), the military carried out the Odi massacre, killing scores if not hundreds of Ijaws. Subsequent actions by Ijaws against the oil industry
Offiah E.I 73 included both renewed efforts at nonviolent action and attacks on oil installations and foreign oil workers (Wikipedia, 2008).
2.6.9 The Emergence of Armed Groups in The Delta Region (2000-2004): The ethnic unrest and conflicts of the late 1990s (such as those between the Ijaw and Itsekiri), coupled with a spike in the availability of small arms and other weapons, led increasingly to the militarization of the Delta. By this time, local and state officials had become involved by offering financial support to those paramilitary groups they believed would attempt to enforce their own political agenda. Conflagrations have been concentrated primarily in Delta and Rivers States (Wikipedia, 2008).
Prior to 2003, the epicentre of regional violence was Warri. However, after the violent convergence of the largest military groups in the region, the Niger Delta People's Volunteer Force (NDPVF) led by
Mujahid Dokubo-Asari and the Niger Delta Vigilante (NDV) led by Ateke Tom (both of which were comprised primarily of Ijaws), conflict became focused on Port Harcourt and outlying towns. The two groups dwarf a plethora of smaller militias supposedly numbering more than one hundred. The
Nigerian government classifies these groups as "cults", many of which began as local university fraternities. The groups have adopted names largely based on Western culture, some of which include
Icelanders, Greenlanders, KKK, and Vultures. All of the groups were constituted mostly by disaffected young men from Warri, Port Harcourt, and their sub-urban areas. Although the smaller groups were autonomous from within, they had formed alliances with and were largely controlled from above by either Asari and his Niger Delta People's Volunteer Force or Tom's Niger Delta Vigilante who provided military support and instruction (Wikipedia, 2008).
The Niger Delta People's Volunteer Force which was founded by Asari, a former president of the Ijaw
Youth Council, in 2003 after he "retreated into the bush" to form the group with the explicit goal of acquiring control of regional petroleum resources. The Niger Delta People's Volunteer Force attempted to control such resources primarily through oil "bunkering", a process in which an oil pipeline is tapped and the oil extracted onto a barge. Oil corporations and the Nigerian state point out that bunkering is illegal; militants justify bunkering, saying they were being exploited and had not received
Offiah E.I 74 adequate profits from the profitable but ecologically destructive oil industry. Bunkered oil can be sold for profit, usually to destinations in West Africa, but also abroad. Bunkering is a fairly common practice in the Delta but in this case the militia groups were the primary perpetrators (Human Rights
Watch, 2005).
The intense confrontation between the Niger Delta People's Volunteer Force and Niger Delta Vigilante seems to have been brought about by Asari’s political falling out with the NDPVF’s financial supporter Peter Odili, governor of Rivers State following the April 2003 local and state elections. After
Asari publicly criticized the election process as fraudulent, the Odili government withdrew its financial support from the Niger Delta People's Volunteer Force and began to support Tom’s Niger Delta
Vigilante, effectively launching a paramilitary campaign against the Niger Delta People's Volunteer
Force. Subsequent violence occurred chiefly in riverine villages southeast and southwest of Port
Harcourt, with the two groups fighting for control of bunkering routes. The conflagrations spurred violent acts against the local population, resulting in numerous deaths and widespread displacement.
Daily civilian life was disrupted, forcing schools and economic activity to shut down and resulting in widespread property destruction (Wikipedia, 2008).
The state campaign against the Niger Delta People's Volunteer Force emboldened Asari who began publicly articulating populist, anti-government views and attempted to frame the conflict in terms of pan-Ijaw nationalism and "self-determination." Consequently the state government felt the escalated the campaign against him by bringing in police, army, and navy forces that began occupation of the
Port Harcourt in June 2004. The government forces collaborated with the Niger Delta Vigilante during the summer, and were seen protecting Niger Delta Vigilante militiamen from attacks by the Niger
Delta People's Volunteer Force. The state forces failed to protect the civilian population from the violence and actually increased the destruction of citizens' livelihood. The Nigerian state forces were widely reported to have used the conflict as an excuse to raid homes, claiming that innocent civilians were cahoots with the Niger Delta People's Volunteer Force. Government soldiers and police obtained and destroyed civilian property by force. The Niger Delta People's Volunteer Force also accused the military of conducting air bombing campaigns against several villages, effectively reducing them to
Offiah E.I 75 rubble, because it was believed to be housing Niger Delta People's Volunteer Force soldiers. The military denies this, claiming they engaged in aerial warfare only once in a genuine effort to wipe out an Niger Delta People's Volunteer Force stronghold (Wikipedia, 2008). Innocent civilians were also killed by Niger Delta People's Volunteer Force forces firing indiscriminately in order to engage their opponents. At the end of August 2004 there were several particularly brutal battles over the Port
Harcourt waterfront; some residential slums were completely destroyed after the Niger Delta People's
Volunteer Force deliberately burning down buildings. By September 2004, the situation was rapidly approaching a violent climax which caught the attention of the international community (Human
Rights Watch, 2005).
After launching a mission to wipe out Niger Delta People's Volunteer Force, approved by President
Olusegun Obasanjo in early September, Mujahid Dokubo-Asari declared “all-out war” with the
Nigerian state as well as the oil corporations and threatened to disrupt oil production activities through attacks on wells and pipelines. This quickly caused a major crisis the following day on September 26,
2004 as Shell evacuated 235 non-essential personnel from two oil fields, cutting oil production by
30,000 barrels per day (4,800 m3/d). On May 15, 2005, a military operation undertaken by a Joint
Task Force (JTF) began against Movement for the Emancipation of the Niger Delta militants operating in the Niger Delta region. It came in response to the kidnapping of Nigerian soldiers and foreign sailors in the Delta region. Thousands of Niger Delta residents fled their villages and hundreds of people were dead because of the offensive attack (Wikipedia, 2008).
2.7 The Creation of the Niger Delta Development Commission and Niger Delta Ministry
The emergence of armed militancy in the Niger Delta eventually precipitated active and sometimes violent confrontation with the state and oil companies, as well as the surrounding communities. As a result, oil production had been hamstringed as disgruntled youth organisations deliberately disrupt oil operations in attempts to effect change. These disruptions have been extremely costly to the Nigerian oil industry, and both the multinationals and the federal government have vested interest in permitting uninterrupted extraction operations; the Niger Delta Development Commission (NDDC) is a result of these concerns and is an attempt to satisfy the demands of the delta's restive population.
Offiah E.I 76
The Niger Delta Development Commission is a Federal Government agency established by Nigerian president, Olusegun Obasanjo in the year 2000 with the sole mandate of developing the oil-rich Niger
Delta region of southern Nigeria. Since its inauguration, the Niger Delta Development Commission has focused on the development of social and physical infrastructures, ecological/environmental remediation and human development. The Niger Delta Development Commission operates under the mandate of improving social and environmental conditions in the South-South region, which it acknowledges as horrific in its own reports. To achieve its mandate, the Niger Delta Development
Commission board identified the development of social and physical infrastructure, technology and economic revival, ecological and environmental remediation and stability, and human development as major areas of focus.
The Niger Delta Ministry was announced by Nigerian President Umaru Yar'Adua on 10 September
2008. The new ministry would have a Minister in charge of development of Niger Delta area, and a
Minister of State in charge of youth empowerment. The existing Niger Delta Development
Commission was to become a parastatal under the ministry. Yar'Adua said that the Ministry would coordinate efforts to tackle the challenges of infrastructural development, environment protection and youth empowerment in the Niger Delta (This Day, 2008).
Offiah E.I 77
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CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
This chapter describes the design of the study, area of the study, population of the study, sample of the study, sources of data, research instrument, methods of data analysis and delimitations of the Study.
3.2 Design of the Study
This study utilizes the ex post facto and historical research designs because of the type of information needed for this study. The values of historical research have been categorized by Hill & Kerber (1967) cited in Cohen et el (2007) as follow: it enables solutions to contemporary problems to be sought in the past; it throws light on present and future trends; it stresses the relative importance and the effects of the various interactions that are to be found within all cultures; it allows for the revaluation of data in relation to selected hypotheses, theories and generalizations that are presently held about the past.
3.3 Area of the Study
The study takes a look at the various oil companies operating in the Niger Delta and the quantity of crude oil they produced from 1961 to 2010 and their selling prices in US Dollar per barrel as compiled by Nigerian National Petroleum Corporation (NNPC). All petroleum production and exploration is taken under the auspices of joint ventures between foreign multi-national corporations and the
Nigerian Federal Government. This joint venture manifests itself as the Nigerian National Petroleum
Corporation, a nationalized state corporation. All companies operating in Nigeria obey government operational rules and naming conventions (companies operating in Nigeria must legally be sub-entities of the main corporation, often incorporating "Nigeria" into its name). Joint ventures account for approximately 95 percent of all crude oil output, while local independent companies operating in marginal fields account for the remaining 5 percent. Seven major companies are operating in the Niger
Delta of Nigeria and are listed in table 3.1. The Niger Delta, as defined officially by the Nigerian
Government, originally consists of present day Bayelsa, Delta and Rivers State. In the year 2000 the government expanded its definition to include Abia, Akwa-Ibom, Cross River State, Edo, Imo and
Ondo States. These are the oil producing states of Nigeria.
Offiah E.I 82
Table 3.1 shows the companies producing oil in Niger Delta and their percentage production levels.
CRUDE STREAM COMPANIES Production JOINT VENTURE COMPANIES: % 1 Shell Petroleum Development Company (SPDC) 11.54 2 MOBIL 8.79 3 CHEVRON 9.25 4 ELF 3.88 5 NAOC/PHILLIPS 4.73 6 TEXACO 0.57 7 PAN - OCEAN 0 JOINT VENTURE COMPANIES (AF): 8 SPDC 1.53 9 MOBIL 10.6 10 CHEVRON 3.6 11 TOTAL E & P 2.93 12 NAOC/PHILLIPS 0 13 TEXACO 0 14 PAN - OCEAN 0 PRODUCT SHARING COMPANIES: 15 CHEVRON 10.11 16 ADDAX 3.99 17 ESSO EXP. & PRO. NIG LTD 7.26 18 NAE 1.24 19 SNEPCO 7.93 20 SA PET/TOTAL UPSTREAM NIGERIA 6.3 SERVICE CONTRACT: 21 AENR 0.44 INDEPENDENTS/SOLE RISK: 22 NPDC/AENR 1.61 23 NPDC 0.72 24 CONSOLIDATED 0.05 25 EXPRESS PETROLEUM 0.02 26 AMNI 0.87 27 CAVENDISH PETROLEUM 0 28 ATLAS 0.02 29 CONTINENTAL OIL 0.96 30 MONI PULO 0.32 31 DUBRI 0.01 32 NIG AGIP EXPLO/ALLIED/CAMAC 0.23 MARGINAL FIELDS: 34 NIGER DELTA PET. RES. 0.2 35 PLATFORM PETROLEUM 0.05 36 MIDWESTERN OIL 0.15 37 WALTER SMITH 0.07 38 PILLAR OIL 0.02 39 MOVIDO E&P NIG LTD 0.01 TOTAL 100
Offiah E.I 83
3.4 Population of the Study
The population of the study include seven (7) major oil companies and thirty-two (32) other subsidiaries operating in the Niger Delta as contained in the NNPC monthly petroleum information, fourth quarter statistical highlights 2009. This is listed in Table 3.1 which shows the companies and their levels of production in percentages.
3.6 Sources of Data
Sources of data in this historical research is classified into two main group: Primary Sources, which are the life blood of historical research, these include items that are original to the problem under study; and Secondary sources, which may be used in the absence of, or to supplement primary data
(Cohen et el, 2007).
The primary sources of data used for this study were extracted from the records and publications of
NNPC and Central Bank of Nigeria through their website. This includes oil companies in Niger Delta, quantity of crude oil production and export with their various average yearly prices from 1961 to 2010.
While other records from literatures, journals, internet and others form the secondary sources of data.
3.7 Method of Data Analysis
The data collected for the study were analysed using descriptive and inferential statistics. Descriptive statistic used include: mean (average), standard deviation, graphs and charts. Such statistics make no inferences or predictions; they simply report what has been found, in a variety of ways (Cohen et el,
2007). The data collected for the study were analysed using descriptive and inferential statistics.
Descriptive statistic used include: tables, mean (average) standard deviation, graphs and charts.
Inferential statistics was used to test the hypotheses at 5% level of significance. The hypotheses were
ẋμ tested using one tail test (t-test), z = and α = 0.05 level of significance. /√
Offiah E.I 84
References and Bibliography
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Onwumere J.U.J. (2009). Business & Economic Research Methods. 2en Ed. Enugu: Vougasen Limited.
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CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction
In this chapter, data collected for the purpose of answering research questions and hypotheses posed in the study were presented and analyzed using statistical tools and interpreted accordingly. The findings were presented according to the research questions and hypotheses posed.
4.2 Research Questions One
What was the trend of oil production from 1961 to 2010?
The trend of crude oil production is as presented in the table 4.1, together with the graph and the chart for
Nigerian Crude Oil Production and Exports (1961 - 2010). The production was at its pick up to 841million barrels in 1979 but drooped to 450million barrels in 1983. From 1983 the oil production picked again to 919 million barrels in 2005. But due to the crises in Niger Delta the oil production dropped again to 661 million barrels in 2009 but rose to 842 million barrels in the post amnesty period, 2010 and that is an increase of 181 million barrels.
Graph For Table 4.1 Nigerian Crude Oil Production And Exports (1961 - 2010)
Nigerian Crude Oil Production and Exports (1961 - 2010) 1,000,000,000
900,000,000
800,000,000
700,000,000
600,000,000
500,000,000 Production Barrels 400,000,000 Exports 300,000,000
200,000,000
100,000,000
0 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
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Table 4.1 Nigerian Crude Oil Production and Exports (1961 - 2010)
Nigerian Crude Oil Production and Exports (1961 - 2010) Total Production Total Exports Prices Total Production Revenue Year Daily Average DailyAverage $ $ 1961 16,801,896 46,033 16,505,985 45,222 20.78 349,143,399 1962 24,623,691 67,462 24,697,969 67,666 20.54 505,770,613 1963 27,913,479 76,475 27,701,320 75,894 20.73 578,646,420 1964 43,996,895 120,210 43,431,563 118,666 20.08 883,457,652 1965 99,353,794 272,202 96,984,975 265,712 20.81 2,067,552,453 1966 152,428,168 417,611 139,549,969 382,329 20.82 3,173,554,458 1967 116,553,292 319,324 109,274,902 299,383 20.39 2,376,521,624 1968 51,907,304 141,823 52,129,858 142,431 19.9 1,032,955,350 1969 197,204,486 540,286 197,245,641 540,399 19.73 3,890,844,509 1970 395,835,825 1,084,482 383,446,359 1,050,538 19.04 7,536,714,108 1971 558,878,882 1,531,175 542,545,131 1,486,425 19.38 10,831,072,733 1972 665,283,111 1,817,713 650,640,779 1,777,707 20.78 13,824,583,047 1973 750,452,286 2,056,034 725,017,584 1,986,350 23.13 17,357,961,375 1974 823,320,724 2,255,673 795,710,044 2,180,028 41.27 33,978,446,279 1975 651,509,039 1,784,956 627,638,981 1,719,559 49.42 32,197,576,707 1976 758,058,376 2,071,198 736,822,998 2,013,178 50.19 38,046,949,891 1977 766,053,944 2,098,778 744,413,355 2,039,489 51.76 39,650,952,141 1978 692,269,111 1,896,628 667,357,065 1,828,376 49.99 34,606,532,859 1979 841,226,770 2,304,731 818,726,943 2,243,088 74.67 62,814,402,916 1980 752,223,285 2,055,255 700,138,614 1,912,947 99.11 74,552,849,776 1981 525,500,562 1,439,728 447,814,027 1,226,888 85.82 45,098,458,231 1982 470,687,221 1,289,554 366,410,179 1,003,864 71.95 33,865,945,551 1983 450,974,545 1,235,547 341,360,910 935,235 63.66 28,709,039,535 1984 507,998,997 1,387,975 400,428,085 1,094,066 60.34 30,652,659,479 1985 547,089,595 1,498,876 453,758,591 1,243,174 54.54 29,838,266,511 1986 535,296,671 1,466,566 445,673,729 1,221,024 28.7 15,363,014,458 1987 482,886,071 1,322,976 388,815,449 1,065,248 33.05 15,959,384,647 1988 490,440,000 1,340,000 406,443,000 1,110,500 27.45 13,462,578,000 1989 626,449,500 1,716,300 556,953,500 1,525,900 32.22 20,184,202,890 1990 630,245,500 1,726,700 565,750,000 1,550,000 38.57 24,308,568,935 1991 690,981,500 1,893,100 587,650,000 1,610,000 32.33 22,339,431,895 1992 716,262,000 1,957,000 580,110,000 1,585,000 29.9 21,416,233,800 1993 695,398,000 1,905,200 568,305,000 1,557,000 25.28 17,579,661,440 1994 664,628,500 1,820,900 580,350,000 1,590,000 23.02 15,299,748,070 1995 672,549,000 1,842,600 607,725,000 1,665,000 23.96 16,114,274,040 1996 681,894,600 1,863,100 620,135,000 1,694,358 28.42 19,379,444,532 1997 855,736,287 2,344,483 767,949,757 2,103,972 25.32 21,667,242,787 1998 806,443,999 2,209,436 706,265,498 1,934,974 15.93 12,846,652,904 1999 774,703,222 2,122,475 678,111,479 1,857,840 21.62 16,749,083,660 2000 828,198,163 2,262,837 714,356,161 1,951,793 34.65 28,697,066,348 2001 859,627,242 2,355,143 780,093,703 2,137,243 28.32 24,344,643,493 2002 725,859,986 1,988,658 663,326,494 1,817,333 27.62 20,048,252,813 2003 844,100,267 2,312,604 791,016,260 2,167,168 32.82 27,703,370,763 2004 911,044,764 2,489,193 871,286,594 2,380,565 43.42 39,557,563,653 2005 918,972,465 2,517,733 843,533,331 2,311,050 55.8 51,278,663,547 2006 859,050,773 2,353,564 817,388,227 2,239,420 63.02 54,137,379,714 2007 810,209,706 2,219,753 791,826,522 2,169,388 67.37 54,583,827,893 2008 768,745,932 2,106,153 724,479,796 1,984,876 92.31 70,962,936,983 2009 660,954,167 1,810,833 496,704,167 1,360,833 54.24 35,850,154,018 2010 841,933,333 2,306,667 677,683,333 1,856,667 71.57 60,257,168,643 Total 29,240,756,926 26,341,683,827 1,268,511,407,543 Average 567,976,473 513,280,011 24,165,084,779 Std Dev. σ 279,891,541 261,949,280 18,618,850,173 Pop. n 48 48 48
Source: NNPC Annual statistics and US Domestic Crude Oil Prices 1946-Present
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Chart for Table 4.1 Nigerian Crude Oil Production and Exports (1961 - 2010)
Nigerian Crude Oil Production and Exports (1961 - 2010) 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 Production 400,000,000
300,000,000 Exports 200,000,000 100,000,000 0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
4.3 Research Questions Two
What was the impact of the Niger Delta crises on oil production from 2000 to 2010?
From the data analysis it was observed that the oil production dropped by 258 million barrels between
2005 and 2009 and this equal to $18.616 billion which is equivalent to N2.792 trillion. Therefore the impact of the crises on oil production from 2000 to 2010 was that Nigeria was losing on the average,
$4.654 billion or N698.1 billion every year. But after the amnesty programme the oil production appreciated by 181 million barrels which amounts to $14.659 billion or N2.2 trillion.
Graph for Table 4.2 Nigerian Crude Oil Production and Exports (2000 - 2010)
Nigerian Crude Oil Production and Exports (2000 - 2010) 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 PRODUCTION
Barrels 400,000,000 EXPORTS 300,000,000 200,000,000 100,000,000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Table 4.2 Nigerian Crude Oil Production and Exports (2000 - 2010)
PRODUCTION EXPORTS Year Total Production (in Daily Average Total Exports Daily Average Barrels) (in Barrels) (in Barrels) Average Prices US$ (in Barrels) 2000 828,198,163 2,262,837 714,356,161 1,951,793 19 2001 859,627,242 2,355,143 780,093,703 2,137,243 19 2002 725,859,986 1,988,658 663,326,494 1,817,333 25 2003 844,100,267 2,312,604 791,016,260 2,167,168 30 2004 911,044,764 2,489,193 871,286,594 2,380,565 51 2005 918,972,465 2,517,733 843,533,331 2,311,050 55 2006 859,050,773 2,353,564 817,388,227 2,239,420 67 2007 810,209,706 2,219,753 791,826,522 2,169,388 74 2008 768,745,932 2,106,153 724,479,796 1,984,876 101 2009 660,954,167 1,810,833 496,704,167 1,360,833 64 2010 841,933,333 2,306,667 677,683,333 1,856,667 81 Source: NNPC Annual statistics and CBN statistics
Chart for Table 4.2 Nigerian Crude Oil Production and Exports (2000 - 2010)
Nigerian Crude Oil Production and Exports (2000 - 2010) 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 PRODUCTION 400,000,000 EXPORTS 300,000,000 200,000,000 100,000,000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
4.4. Research Questions Three
What was the effect of the amnesty program on improving the quantity of oil produced in the post amnesty period?
After the amnesty program, in 2010 the crude oil production appreciated by 181 million barrels and this increase amounts to $14.659 billion or N2.2 trillion. This is an indication that the amnesty program had tremendous impact on improving the quantity of crude oil produced in the Niger Delta.
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4.5. Research Questions Four
What was the quantity of oil products lost as a result of the crisis from 2003 to 2009?
From the table 4.3 the value of product loss from 2005 to 2008 as reported by NNPC is 1,631,310,000 litres. On the average Nigeria was losing 407,827,500 litres per year in the heat of the crises.
Therefore, the quantity of oil products lost as a result of the crisis from 2003 to 2009 is 7 x
407,827,500 = 2,854,792,500 litres.
Table 4.3 Product Loss
Product Loss Zone 2008 2007 2006 2005 Total PH 151,150,000 95,620,000 336,230,000 337,170,000 920,170,000 Warri 22,360,000 - 16,000,000 145,140,000 183,500,000 Mosimi 12,980,000 141,520,000 183,400,000 146,160,000 484,060,000 Kaduna 5,130,000 5,100,000 - 16,570,000 26,800,000 Gombe - - - 16,780,000 16,780,000 Total 191,620,000 242,240,000 535,630,000 661,820,000 1,631,310,000 Source: NNPC Annual statistics
Chart for Table 4.3 Product Loss
Product Loss 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 2005 1,000,000,000 2006 800,000,000 2007 600,000,000 2008 400,000,000 Total 200,000,000 - PH Warri Mosimi Kaduna Gombe Total
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Graph for Table 4.3 Product Loss
Product Loss 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 2005 1,000,000,000 2006
Litres 800,000,000 2007 600,000,000 2008 400,000,000 Total 200,000,000 - PH Warri Mosimi Kaduna Gombe Total
4.6. Research Questions Five
What was the impact of the crisis on the revenue realisable by the federal government of Nigeria from
2003 to 2009?
Going by the data given by NNPC in table 4.4 on the value of product lost in Naira we have
N110,095,000,000 for 2005 to 2008 averaging N27,523,750,000 per year and if we extrapolate it for
2003 to 2009 which is 7 years we have N192,666,250,000 as the value of product loss to the federal government of Nigeria within this crises period.
Table 4.4 Value of Product Loss in Naira
Value of Loss in Naira Zone 2008 2007 2006 2005 Total in Naira PH 12,289,000,000 6,333,000,000 21,885,000,000 20,591,000,000 61,098,000,000 Warri 1,589,000,000 - 1,052,000,000 9,854,000,000 12,495,000,000 Mosimi 681,000,000 10,634,000,000 13,709,000,000 9,251,000,000 34,275,000,000 Kaduna 35,000,000 273,000,000 - 990,000,000 1,298,000,000 Gombe - - - 929,000,000 929,000,000 Total 14,594,000,000 17,240,000,000 36,646,000,000 41,615,000,000 110,095,000,000 Source: NNPC Annual statistics
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Graph for Table 4.4 Value of Product Loss in Naira
Value of Product Loss in Naira 120,000,000,000
100,000,000,000
80,000,000,000 2008 2007 60,000,000,000
Barrels 2006 40,000,000,000 2005 20,000,000,000 Total
- PH Warri Mosimi Kaduna Gombe Total
Chart for Table 4.4 Value of Product Loss in Naira
Value of Loss in Naira 120,000,000,000
100,000,000,000
80,000,000,000 2008 2007 60,000,000,000 2006 40,000,000,000 2005
20,000,000,000 Total
- PH Warri Mosimi Kaduna Gombe Total
4.7. Research Questions Six
Where there other consequences of the crises in Niger Delta to oil business in Nigeria?
There were a lot of other issues that resulted from the oil crises in Niger Delta. First were the constant incidents of pipeline breaks. Secondly, were the issues of fire out breaks as a result of these pipeline breaks and thirdly, was the issue of loss of lives and properties as a result of this massive
Vandalization. According to NNPC report in table 4.5, from 2003 to 2008 alone, we had a total of
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13,301 incidents of pipeline breaks, on the average 2,219 incidents occur every year. Also, from 2006 to 2008 as recorded in Table 4.5 which shows the incidents of fire outbreak as a result of pipeline
Vandalization, we have a total of 82 incidents which is on the average 28 cases every year. Farm lands and rivers were damaged, agricultural and fishing activities and even drinking water were seriously affected by these pipelines Vandalization and this coursed a lot of economic hardship on the people.
This is the major environmental issues that Niger Delta people had to contend with.
Table 4.5 Pipeline Breaks
Zone 2008 2007 2006 2005 2004 2003 Total PH 557 1631 2091 1017 429 624 6349 Warri 745 306 662 769 266 104 2852 Mosimi 530 479 486 209 152 78 1934 Kaduna 129 126 176 243 122 20 816 Gombe 357 702 268 20 2 1 1350 Total 2,318 3,244 3,683 2258 971 827 13,301 Source: NNPC Annual statistics
Chart for Table 4.5 Pipeline Breaks
Pipeline Breaks 14000
12000
10000 PH
8000 Warri Mosimi 6000 Kaduna
4000 Gombe Total 2000
0 2008 2007 2006 2005 2004 2003 Total
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Graph for Table 4.5. Pipeline Breaks
Pipeline Breaks 14000
12000
10000 PH Warri 8000 Mosimi 6000 Barrels Kaduna 4000 Gombe 2000 Total 0 2008 2007 2006 2005 2004 2003 Total
Table 4.6. Fire Outbreak as a Result of Pipeline Vandalization
Fire Outbreak as a Result of Pipeline Vandalization Zone 2008 2007 2006 Total PH 4 8 30 42 Warri 6 2 0 8 Mosimi 8 4 8 20 Kaduna 4 3 1 8 Gombe 3 1 0 4 Total 25 18 39 82 Source: NNPC Annual statistics
Chart for Table 4.6. Fire Outbreak as a Result of Pipeline Vandalization
Fire Outbreak as a Result of Pipeline Vandalization 90 80 70 60 2008 50 2007 40 30 2006 20 Total 10 0 PH Warri Mosimi Kaduna Gombe Total
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Graph for Table 4.6. Fire Outbreak as a Result of Pipeline Vandalization
Fire Outbreak as a Result of Pipeline Vandalization 90 80 70 60 2008 50 2007 40 Litres 30 2006 20 Total 10 0 PH Warri Mosimi Kaduna Gombe Total
4.8. Hypotheses Testing
1. Ho1: The amnesty programme has no significant improvement on the level of crude oil exploration
after the amnesty program.
ẋ Ho1: µ ≤ ẋ z = /√
Using the data from the table 4.1 Nigerian Crude Oil Production and Exports (1961 - 2010)
Crude oil production (2010), ẋ = 841,933,333
Average production (1961-2009), µ = 567,976,473
Standard deviation (1961-2009), σ = 279,891,541
Population, n = 48
Confidence interval, α = 0.05 ,,,, z o1 = = 6.7813 ,,/√
z α = 1.645
z o1 - z α = = 6.7813 - 1.645 = 5.1363
Therefore, we reject Ho1 This implies that the amnesty programme has significant improvement on the level of crude oil exploration after the amnesty program.
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2. Ho2: The amnesty programme has no significant improvement on the level of revenue generated
from crude oil after the amnesty program.
ẋ Ho2: µ ≤ ẋ z = /√
Using the data from the Table 4.1 Nigerian crude oil production and total revenue (1961 - 2010)
Crude oil revenue (2010), ẋ = 60,257,168,643
Average revenue (1961-2009), µ =24,165,084,779
Standard deviation (1961-2009), σ =18,618,850,173
Population, n = 48
Confidence interval, α = 0.05 ,,,,,, z = = 13.43 o1 ,,,/√
z α = 1.645
z o1 - z α = = 13.43 - 1.645 = 11.785
Therefore, we reject Ho1 and we conclude by stating that the amnesty programme has significant improvement on the level of revenue generated from crude oil after the amnesty program.
, n = ,.
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References and Bibliography
Cohen L; Minion L. &Morrison (2007). Research Methods in Education. 6th Ed. London and New York: Routledge
Bowerman B.L; Connell R.T. & Hanh M.L. (2001) Business Statistics in Practice.2nd Ed. New York: MacGraw-Hill
CBN (2006-2010). Crude Oil Price (US$/Barrel), Production (mbd) and Export (mbd). Data and Statistics [Online] Available from: http://w1219.cenbank.org/Rates/ [Accessed: 19 February 2011]
NNPC (1997-2009) Annual Statistical Bulletin. [Online] Available from: http:// www.nnpcgroup.com [Accessed: 17 December 2010]
Okolo J.E. (2000). A Systematic Approach to Writing Research (Project) Report in Tertiary Institutions. Onitsha: Joevin.
Olakunori O.K. (2000). Successful Research (Theory and Practice). Enugu: Computer Egde.
Onwumere J.U.J. (2009). Business & Economic Research Methods. 2nd Ed. Enugu: Vougasen Limited.
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CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Findings
Before the amnesty programme by the Federal Government of Nigeria the crude oil production dropped by 258 million barrels between 2005 and 2009 From 919 million barrels in 2005 to 661 million barrels in 2009 due to the crises in Niger Delta and this decrease in production amounts to
$18.616 billion which is equivalent to N2.792 trillion. On the average Nigeria was losing $3.72 billion or N558.5 billion every year. Going by the official record of NNPC, the quantity of oil product lost as a result of the Niger Delta crisis from 2003 to 2009 is about 2.855 billion litres and the value of this product lost is N192.7 billion.
Other issues that resulted from the oil crises in Niger Delta include constant incidents of pipeline breaks, fire out breaks as a result of these pipeline breaks and loss of lives and properties as a result of this massive Vandalization. According to NNPC report the incident of pipeline breaks average 2,219 cases every year. Also, the incidents of fire outbreak as a result of pipeline Vandalization were 28 cases on the average every year. Farm lands and rivers were damaged, agricultural and fishing activities and even drinking water were seriously affected by these pipelines Vandalization and this coursed a lot of economic hardship on the people. This is the major environmental issues that Niger
Delta people had to contend with.
Immediately after the amnesty program in 2010, the crude oil production appreciated by 181 million barrels and this increase amounted to $14.659 billion or N 2.2 trillion. This amount is the dividend of peace in Niger Delta and is far more than N 200 billion which the government budgeted to pursue lasting peace through infrastructural development in the Niger Delta region.
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5.2 Conclusion
The amnesty programme has significant improvement on the level of crude oil exploration from Niger
Delta region and on the level of revenue generated from crude oil by the Federal Government. The amnesty programme since its introduction, had led to the reduction of violence and the subsequent increase in the production of oil from the Niger Delta. Immediately after the amnesty declaration and the retrieval of arms, there was reduction of violence activities in the Niger Delta. There was also drastic reduction in oil theft and subsequent increase in the production of oil and some of the construction works that were stopped during the period of the crisis were also started. Also, there was general restoration of confidence and business activities.
The amnesty is a right step in the right direction and should be supported and maintained by subsequent administrations. Public relations managers in the oil multinationals as well as the government, should at all times try to ensure that hostility is converted into sympathy, prejudice to acceptance, apathy to interest, ignorance to knowledge, and crisis and war situation to peace and harmony situations according to Frank Jefkins’ transfer process model.
There is no gain saying the fact that the root causes of the Delta insurgency were poor management of
Niger Delta issues before it generated into crises situation. The crises was as a result of poor community relations and corporate social responsibility which is dogged by endemic corruption and misadministration which contributed to mounting public frustration at the slow pace of change under the country’s nascent democracy. Issues like underdevelopment, slow pace of systemic reforms and the lack of jobs, electricity, water, schools, clinics, environmental damages/degradation and failure to give adequate compensation to the oil communities to a large extent, boosted support to insurgents such as MEND and other ethnic militant groups and these were issues public relation manager should have handled at onset.
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5.3 Recommendations
1. Therefore, the Nigerian government through the help of public relations experts needs to forge far-reaching reforms to administration of Niger Delta issues and its approach to revenue sharing formula should be fear enough to accommodate the Niger Delta’s interest. The oil companies have to involve credible, community-based organisations in their development efforts and Western governments to pay immediate attention to improving their own development aid. The government reforms must be sustainable if peace is to succeed in Niger Delta.
2. Transparent and participatory development schemes can foster hope and accountability in Delta communities. Development efforts led by the European Commission and other International organizations should provide models for an approach that could reverse the cycle of poverty and violence in the Niger Delta region. Government must also tackle corruption by making development initiatives more transparent. Otherwise, even dramatic increases in spending will be wasted.
3. It should be noted that the Niger Delta crisis requires a negotiated political resolution. As any attempt to use military solution would always be disastrous for residents and risky for the oil industry.
Most facilities are in the maze of creeks and rivers that are particularly vulnerable to raids by well- armed militants with intimate knowledge of the terrain.
4. Greater effort should be made to stop illegal oil “bunkering” as it accelerates the conflict and provides militant and criminal groups with funds to purchase arms.
5. Another issue that has to stop is the discreet payments oil companies make to militant leaders in return for “surveillance” and protection of pipelines and other infrastructure. This practice, frequently cloaked as community development, has fuelled conflict through competition for contracts and by providing income to groups with violent agendas. Oil companies also pay allowances to
“supernumerary police”, as well as regular duty police and soldiers deployed to protect oil installations. Security forces consider these plum postings and were alleged to use excessive force to protect company facilities and their jobs so this should stop.
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6. To encourage faster development of Niger Delta and in an effort to deflect growing public impatience, government should spend, more than ever, greater amounts on community projects. The
Oil industries should also contribute to greater extent to the development of the region and should not leave the developmental efforts to the government alone. Therefore, the oil companies should augment government’s effort by sharing the responsibility for development of the region with the government.
7. The government and the oil multinationals should use every public relations and crises management strategy to rebuild, sustain and maintain peace in the Niger Delta region as this will guarantee steady increase in oil revenue. They should engage fully the services of public relations and crises management professionals to manage the amnesty programme. These experts should ensure two way-communication and information flow between the communities and the government.
8. Amend or repeal the 1978 Land Use Act to expand the opportunity for communities to seek compensation for land through legal means and to allow a more transparent adjudication process of potential land seizures. The government should encourage exploration and production of other mineral resources throughout Nigeria.
9. The government should accelerate steps to implement poverty reduction strategies outlined in
State Economic Empowerment and Development Strategies (SEEDS) that have been developed in conjunction with Nigeria’s national umbrella anti-poverty strategy, NEEDS. The government should ensure that state allocations are spent on projects that focus on health services and safe drinking water, education, job training and transportation.
10. The oil companies should develop partnerships with non-governmental, community-based bodies with a demonstrated ability to provide skills training and capacity building for development projects, including women’s and religious groups that have played significant roles in mediating among various ethnic groups and actors in the past decade.
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11. The oil companies should encourage corporate transparency by releasing detailed, public reports of expenditures, including costs of development and payments to governments, community groups and contractors. They should also make clear to the public their community development efforts in Niger Delta through appropriate media.
12. The government should provide resources for and support an independent environmental impact assessment (EIA) of the Niger Delta and this environmental impact assessment (EIA) studies should be transparent and accessible to community groups. There should be a credible independent judicial mechanism to adjudicate compensation claims, taking steps to ensure that the credibility of such an environmental assessment is not damaged by funding from or in association with the government and energy companies, and that compensation is distributed transparently in a manner that benefits communities rather than “benefit captors” such as politicians and militant and traditional leaders. Obtain community assent before proceeding with infrastructure and other developments.
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