Energy Special: Oil in troubled waters

By Michael Peel

Financial Times

Published: March 26 2005

In the mangrove swamps of Nigeria’s oil-producing Rivers State, the Niger Delta People’s Volunteer Force was in restless repose. A fighter worked out with dumbbells while others lounged on mattresses in front of a large outbuilding. One young man was reading, aloud in English, from a copy of Macbeth.

Their leader, Alhaji Mujahid Dokubo-Asari, was preparing to take me to a swamp facility where he claimed to refine oil taken from a pipeline operated by Royal Dutch/Shell, the energy multinational. (Asari says this is not stealing; it is the Nigerian government that is stealing.) He had just changed out of a black tracksuit into a bright orange jumpsuit with the Shell logo on the back. He put on a white hard hat belonging to Willbros, the oil services company. “Do I look fine?” he asked, running his hands over his ample stomach.

On this, the third of four occasions I visited Asari, he had not yet quite become the symbol of a Robin Hood-like quest by the poor for a share of the nation’s oil wealth that he claims to be today. But he was fast gaining notoriety: his critics, outside government as well as within, saw him as a gangster rather than a political revolutionary. Either way, his rising profile says much about the way the Delta is being choked by a violent and corrupt web of relationships between oil multinationals, government officials, smugglers, ethnic fighters and local communities. I wanted to find out whether he was a true challenge to the inequities - perhaps even the existence - of Nigeria’s multinational-operated oil regime. The country already provides about 10 per cent of US oil imports, while Britain expects to source a similar proportion of its energy needs from the Delta by 2010.

The more than $300bn of revenues earned by Nigeria from Delta oil since independence in 1960 has in substantial part been stolen and squandered by generals and civilian governments, leaving its people among the poorest in the world. In September last year, Asari threatened to launch an offensive called “Operation Locust Feast” unless government troops backed off from the area in which he operated and the authorities began talks about oil-resource control. He denounced oil companies and said he could not be responsible for the safety of foreign nationals working in the area. This helped push the price of oil on the world markets through $50 a barrel for the first time. Shell evacuated over 200 staff. Nigeria’s government invited Asari to Abuja, the capital, where he and another militia leader agreed to make peace and disarm. The Rivers State government claimed it later collected over a thousand weapons from the militias, but many Deltans still see the whole process as an emergency arrangement aimed at reassuring oil markets, rather than a serious attempt to end the region’s conflict.

Asari was cultivating media interest before the deal, so a colleague and I accepted an invitation to meet his men early one morning at a jetty about an hour and a half’s drive from the oil city of Port Harcourt. They eventually arrived by speedboat and moored, half-hidden behind the end of the jetty. We quickly climbed aboard. A machine gun and three Kalashnikov rifles lay behind benches on the floor: one of the youths apologised as he passed the machine gun over my head. The men were swigging gin, which blew in my face in a fine spray as we picked up speed. They said sorry again; then one of them fired two shots in the air.

The camp, reached after an exhilarating high-speed ride through a series of branching waterways, was full of the signs of expansion. A new accommodation block was being built and boat engines were being repaired by the waterside. Asari told us there was no shortage of willing expert helpers who support his idea of an independent nation for his Ijaw people, although none was around that day. “Doctors have been coming twice a week, we have people volunteering, we have lawyers,” he said.

The struggle of the Ijaw people is a defining feature of Nigeria’s post-colonial politics, which have been dominated by dictatorship, corruption and infrastructural collapse. The country was created by British colonial order in 1914, binding together people from hundreds of ethnic groups who speak hundreds of different languages. The Ijaw, the Delta’s largest ethnic group, have in effect been disenfranchised by modern political boundary-setting: being a widely dispersed people concentrated around the Delta’s coastline and rivers, their communities form parts of many states, rather than a single homogeneous zone. In the Delta, a long-running conflict over the distribution of local government posts between the Ijaw and the Itsekiri peoples is thought to have killed hundreds of people in the past few years, and even led, in 2003, to a temporary shutdown of more than a third of the nation’s oil output.

The political context is critical to understanding why even Ijaw campaigners who disapprove strongly of Asari’s violent and self-promoting methods say they have a certain regard for him. “Emotionally speaking, he has a heart for his people,” says Dimieari Von Kemedi, a respected activist who, though Ijaw, runs a multi-ethnic non-governmental group called Our Niger Delta. “How he goes about searching out what he thinks is in the best interest of his people is a completely different matter.”

As Asari sat at his makeshift patio table, periodically answering two mobile phones that played drum ‘n’ bass ring tones, the difference in sophistication between him and his men was obvious. He speaks excellent English and is one of only a handful of Muslims in a community that, despite including many Christians, is steeped in the worship of Egbesu, an Ijaw god widely believed to protect its worshippers from being harmed by bullets. Asari, who has just turned 40, has had a life of some privilege, as he himself admits. The descendant of a slave trader and the son of a judge, he says he dropped out of university and travelled the world, finding himself attracted by the revolutionary spirit of Islam, to which he converted in 1988. He spoke of a “wonderful year” in Libya, where he said he met Charles Taylor, Liberia’s warlord former president. Asari also said Osama bin Laden was one of his heroes, although in the past he has denied links with al-Qaeda and said he disagrees with bin Laden’s methods.

The force’s training area was a short walk from the main camp, past a small shrine to Egbesu containing empty spirits bottles. Four men were smoking hash under a wooden shelter next to a patch of open ground. I knew from a rota posted on the walls of the main building that the fighters were supposed to spend six hours a day training, so I asked if there was anything going on that afternoon. One of the men replied that there was, but said they were resting for “one hour, two hours”. The marijuana was to give them strength to work and fight, added Blessing Iblubor, another fighter. “That’s why we want to take it always,” he said.

The anti-government feeling shared by Asari, his men and huge numbers of ordinary Nigerians was crystallised by President Olusegun Obasanjo’s controversial re-election in 2003. Many Nigerians believe that rich nations, eager to project an image of progress in the country and to secure both oil supplies and the position of the Christian and generally pro-western Obasanjo, all but ignored widespread ballot-rigging and intimidation of opposition supporters and their leaders, including the runner-up, Muhammadu Buhari, a Muslim northerner. Jack Straw, Britain’s foreign secretary, proclaimed the elections “a landmark in the advancement of Nigeria’s democracy”.

The elections in Rivers State, where Obasanjo officially won almost 93 per cent of the vote, were among the worst anywhere. In a day spent travelling in and around Port Harcourt, I did not see a single person cast their vote legitimately. Instead, I saw ballot-box stuffing and intimidation of electors by ruling-party agents, and heard accounts of voting materials being stolen by armed thugs. In the Ogoni region, I watched as returning officers leafed through a sheaf of results sheets recording 100 per cent turn-outs and 100 per cent votes for the president. In Port Harcourt, a group of young men identified by locals as ruling- party supporters tried to persuade me that a large street protest complaining about the non-distribution of ballot boxes was being staged by people who were mentally disturbed.

Rivers State officials have attempted to discredit Asari by portraying him as a corrupt oil thief. He admits he takes oil, but says he sells it to local people for subsidised prices or gives it away free, rather than selling it for large profits or trading it for weapons with tankers offshore. Many people doubt this: one oil executive raged to me that Asari should have been locked up when he came to Abuja, rather than being received by senior government officials. A confidential report commissioned by Shell concluded that between 275,000 and 685,000 barrels were stolen on average each day, generating between $1.5bn and $4bn annually for the thieves, although Shell’s official figures put the volumes mostly in the 40,000- to 100,000-barrels-a-day range. Oil theft is widely thought to be done with high-level official complicity: two rear-admirals were sacked in January after a court martial found them guilty of involvement in the disappearance, in 2003, of an impounded tanker that had been shipping stolen oil from the Delta.

The Shell report, by WAC Global Services, a group of conflict management specialists, says earnings from oil theft have made it possible for militias to buy thousands of weapons, including former Soviet-type small arms, rocket launchers and possibly short-range missiles. Unrest in the Delta could force the company out of onshore production by 2008 unless it was prepared to violate its business principles, the report concludes. “It is clear that [Shell] is part of Niger Delta conflict dynamics and that its social licence to operate is fast eroding,” the report says. “Whereas some groups argue that [Shell] consciously fuels conflict as part of a ‘corporate conspiracy’, the...links result rather from a quick-fix, reactive and divisive approach to community engagement expressed through different areas of policy, practice and corporate culture.”

Late in the afternoon, we finally leave Asari’s camp for the refinery. The weather is bad and we spend the first part of the hour-long speedboat ride crouched with heads down, trying to stay out of the rain. Asari had said we would probably see a military base and barges belonging to oil thieves out on the river, but we come across only a few fishermen in canoes. Beyond a stretch of blackened mangroves - burnt by a fire at the refinery, Asari says - we arrive at a gap in the vegetation across which some fallen trees lie. A thin green pipe is just visible above the waterline. Asari says that this is where his men tap the oil, but that unfortunately we cannot go further and see the refinery because the tide is high and the route blocked. It seems surprising that an Ijaw man apparently so conscious of his roots and environment should be caught out by the ebb and flow of the Delta’s waters.

On the way back, we pass Shell facilities where two huge orange plumes of burning gas - Nigeria’s oil industry is thought to be the world’s most polluting flarer of waste gas - illuminate the overcast sky. Another Shell facility, with the company’s distinctive yellow and black railings, stands apparently deserted, a ladder leading conveniently down to the water. There appears to be nothing to stop us climbing up ourselves, emulating the gangs and community protesters who periodically occupy facilities and disrupt production all over the Delta. We make a final stop at the nearby community and Asari stronghold of Sangama. We leave our soaked-through footwear at the doors of the neat, tiled front room of the community chief’s house, where some of the chairs are so new they are still encased in their plastic covers. A large and loud television is showing an action film starring Sylvester Stallone. Boma Briggs, a community leader, explains that oil production has brought nothing except pollution, making it harder to catch fish. The area lacks clean drinking water, network electricity, and school and medical facilities, he adds. “We resettled in 1999, and since then there has not been any government support or oil company here.”

Briggs talks about the problems of conflict and security in the area, explaining that local fishermen voluntarily pay protection money to community leaders. The cash is put into an account administered by a local commander, who gives donations to those in need. At the back of the room Briggs shows us evidence of some of the proceeds from the arrangement: four Panasonic television boxes and one for a JVC sound system. “All these are gifts,” he explains. “’Thank you for your good security work.’”

As we leave, dusk is approaching and members of a crowd - dozens of people - are chanting, smoking and drinking in boisterous appreciation of Asari. Clutching his blue Beretta pistol, Asari sings a motivational Ijaw song to the gathering, which replies in kind. We speed back to land in disorderly convoy, the drivers demonstrating their skills with sharp, fast turns that more than once threaten to capsize us. One or two of the fighters whoop, enjoying their power and freedom on the deserted waterway: one boat flies a skull and crossbones flag; another is guarded by a machine gun manned by a fighter in ripped leather jacket and black beret.

Before we part, I ask Asari what will happen to his organisation now. He replies that, “One small mistake can bring everything down. Like all revolutionary movements, such mistakes can be very expensive,” he says. “It can lead to the deaths of so many people. So we are trying to prevent that.”

Four months elapse before my next encounter with Asari, which takes place just before Christmas in Port Harcourt. I wait with some of the former militia members in the courtyard outside a law firm’s office. Much has changed since we last met: the peace deal means Asari and his fighters have come out of the bush and are supposed to be reintegrating into urban life.

Now many of the men are restless and bored, complaining that they have no work. One sleeps on the bonnet of a car, while others ask for money for food.

As dusk approaches, Asari sweeps in, wearing white robes that have a preternatural appearance in the fading light. Addressing the young men from under the mess of power and telephone lines that hangs precariously over the courtyard, he calls out a list of names of people to come forward and stand in a line. In the background, one of his assistants gives out one or two gifts, including at least one Swiss-made Calvin Klein watch. The men picked will work for Asari’s security company. One of those chosen looks ecstatic: he makes a thumbs-up sign to someone in the crowd and gestures to his eyes as if to say, “Can you believe what you are seeing?” Afterwards, Asari hands out cash to some of those not chosen. “Money, money, money,” one of them says aloud in his excitement.

As it is now dark, Asari asks if we can do our interview in the back of his Lincoln luxury four-wheel drive. He tells me later that he owns seven vehicles: the Lincoln, four Mercedes and two buses. As a secret police officer detailed by the government to stay with Asari sits silently in the Lincoln’s back seat, the erstwhile militia leader says he is not happy with the authorities. Many of his bases, including the one we visited, have been damaged or destroyed by the security forces, he says. He is angry at what he says is official failure to address broader issues, including demands for greater control of oil wealth and self-determination for the Ijaw. These issues are touched on in the peace deal, although no specific commitments are made about addressing them. Asari insists his struggle will be peaceful from now on, and is likely to focus on “civil disobedience, [oil-production] stoppages, demonstrations, boycotts and so on”. He is intrigued by a shutdown of at least 100,000 barrels a day of Shell and ChevronTexaco production in the Kula community near Port Harcourt. He claims his group is not involved, but he quotes it as an example of what can be done. “It’s part of the design by the communities to assert themselves and take what belongs to them,” he says.

Three days later, I am sitting near the top of Shell’s high-rise office in Lagos, the commercial capital. This building, with its commanding views of sub-Saharan Africa’s biggest city, is the base for Chris Finlayson, Shell’s chief executive for exploration and production in Africa. Shell accounts for almost half of Nigeria’s oil output and the country accounts for about 10 per cent of the company’s production. Among other things, Finlayson, too, is preoccupied with the Kula shutdown. Far from wanting to avoid discussing an awkward issue, he volunteers his thoughts on it: he says he has some sympathy with the community, who feel they have been “well behaved” but have yet to see a development project they were promised by government. “We need to be in a position where we reward communities that display good relationships and good interactions, and don’t take them for granted,” he says. “I think there is a good wake-up call to everybody in the industry and government there: that we don’t over-focus on communities that are giving us problems.”

His words sound conciliatory, but many activists would see them as part of a familiar pattern. The oil industry in Nigeria has gone through cycles of investment in community projects, followed by heavy public criticism, corporate contrition and reform. The companies say they are happy to spend on development, but add that they can be held responsible neither for the lack of infrastructure nor the behaviour of the authorities towards their own people, even though members of the country’s often brutal security forces guard oil multinational facilities. In the most widely known Nigerian case of the junction between oil and political repression, Ken Saro-Wiwa and eight other Ogoni activists were executed in 1995 by the then military dictatorship. Shell shut down its wells in Ogoni, which is about an hour’s drive from Port Harcourt, more than 11 years ago. It has never reopened them.

In January this year, Shell launched its latest, revamped Delta-wide community-relations policy. Finlayson says the changes are supposed to take account of criticisms over unfulfilled projects and potentially divisive practices such as making direct cash payments to communities whose “leaders” may be unrepresentative or who may have poor and resentful neighbours. The flow of large numbers of banknotes - Nigeria’s biggest bill is worth less than $4 - is widely seen as encouraging corrupt and collusive relationships between favoured Deltans and oil company managers. Finlayson admits the company has experienced “significant” staff corruption in “the challenging areas of interface with community where there has been, shall we say, a lot of money going around”. Shell is in talks with the Nigerian government about the implementation of a programme based on the Extractive Industries Transparency Initiative, a British government-backed plan for increased disclosure of payments made by natural resource companies to the countries in which they operate.

Shell’s past approach has had its shortcomings, Finlayson says, although he disagrees with the WAC report’s conclusion that the company could be forced to choose between working in the Delta and having to admit publicly that it cannot take the Delta’s oil without breaking its business principles. “We believe we can make sure that things do not continue in a downward spiral by changing the way we interact with the communities,” he says. “What we disagreed with was the sense of inevitability in the report.”

The Nigerian government has just relaunched its Niger Delta Development Commission, a body that is jointly funded by the authorities and the oil companies, but which has been criticised as ineffective and corrupt. At the time of the peace deal with Asari, President Obasanjo condemned “undue militancy” in the Delta, although he admitted the region’s people had legitimate grievances and he criticised local officials for failing to bring development. “The obvious assessment so far is that not much impact has been made on the lives and living standards of most ordinary people of the Niger Delta,” he said.

Which captures well the significance of the enigmatic figure of Asari, who has skilfully played up his principles, and played down his violent opportunism, to acquire an aura of power and influence. In the words of one activist who has worked on Delta conflict issues for many years, and who asked not to be named for fear of security-force harassment, the best way to evaluate Asari is as a sign of what the Delta is becoming in the absence of fundamental change. “Asari is an example of what can happen in the next year or two,” the activist says. “If a real leader comes through, he will be able to do what Asari is pumping himself up to do, and then some. Because the guns are out there.”