An archetypal example of an oil state and primary exporting country, Nigeria is the largest oil exporter in Africa and the world’s tenth largest oil producer (Pyagbara 2007: 1). As of 2010, crude oil and petroleum gas accounted for approximately 80% of the country’s overall exports, totaling over $50.3 billion in revenues the next year (Pyagbara 2007: 2). Despite maintaining a lucrative resource that could arguably catalyze momentum towards economic development, poverty plagues Nigeria and continues to rise despite efforts to forge positive, developmental changes. In fact, areas showing the largest amounts of oil like the Niger Delta happen to be the country’s most economically marginalized region. A significant impetus of these tumultuous changes has been multinational oil corporations like Shell that have been extracting oil in Nigeria since 1956. This paper seeks to examine Nigerian development in the face of oil extraction and how MNCs such as Shell have played a role in the country’s development. I will argue that MNCs, specifically Shell, have had an adverse effect on development within Nigeria as a result of oil extraction and the establishment of dependency on oil, both of which are amplified by the deep-rooted intrastate issues present despite MNC intervention.
Development in the Context of Oil: Fiscal, Social, and Ecological Damage Multinational oil corporations such as ExxonMobil and Shell share a long history of oil extraction in Nigeria. Royal Dutch Shell and
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Situated along the coast of the Gulf of Guinea is a region about the size of South Carolina that offers a land full of sweet, light crude oil, known as the Niger Delta (Delta). The Delta sits within the country of Nigeria in West Africa and is in a constant state of crisis, underpinned by a multitude of key issues. Those issues include severe poverty, soil and water contamination, high infant mortality rates, low life expectancy, depletion of natural resources, corruption, and armed militia groups. These issues have one thing in common: oil.
The documentary Big Men chronicles the story of foreign involvement and corruption in the oil and gas industry in West Africa. It juxtaposes an old oil exporter, Nigeria, and a new discoverer of oil, Ghana and highlights their connections to outside foreign investors as well as multinational corporations. The overarching theme of this documentary is to reveal the exploitation of natural resources by outsiders and centralized governments at the expense of the local populations. This paper will first discuss the two countries of interest and will then discuss the U.S. Company Kosmos and the significance of foreign involvement in African economies.
The oil age has become an age of inequality. The discovery of oil has brought the wealth of a few people, and has brought misery to most people. Many oil rich countries suffer from the distortion of the economic development, the financial instability, the increasing gap between the rich and the poor, the serious
Much of the Delta’s violence stems from the decision of government officials to allocate most of the profits from the Deltas oil production to the few ethnic majorities in power. However, the difference between rich and poor in a society is not enough to generate violent conflict within a region. It takes something much more in-depth and personal to generate the level of violence the Niger Delta is experiencing. Therefore, looking at conflict from a vertical inequality perspective, meaning from the lowest socioeconomic groups to Nigeria as a whole, does not do justice for this scenario. Horizontal inequalities is what can be used to explain the degree and ferocity of violence that is generated from the unequal distribution of goods and bads associated with oil production among religion, race, or language (Ostby, G. 2008). This horizontal inequality means that
South Sudan’s economic development, as measured by the country’s ability to promote economic growth, contrasts drastically with that of its political realm. By and far, South Sudan’s economic growth has seen rapid development, led by the extraction and commercialization of it’s oil reserves. Of key importance, one must note that the intricacies of South Sudan’s ability to extract oil is highly associated with the easing of military tensions. And indeed, with the recent “lifting of threats by the Sudanese president, Omar al-Bashir, to shut down the South Sudan oil flow…in Juba,” (“SOUTH SUDAN: Oil Production Up,” 2013) GDP has increased, indicating a (theoretical) increase in overall standard of living ("Top Growers," 2013.) Although the adoption of foreign technologies and investments has widely been acted as a means of realizing the full gains of oil extraction, the SPLM have proceeded with extreme caution in developing South Sudan’s oil industry (Bream, Boxell & England, 2005). The underlying logical remains that the SPLM recognized corporate exploitation and corruption faced by other developing nations that signed contracts over their natural resources, often leading to increased domestic poverty and foreign ownership of domestic economies. In this sense, the South Sudanese economy should see healthy economic growth, as it controls its own markets and has agency over its own economic growth. However, South Sudan’s economic growth has seen considerable limitations as a
In 1994, Equatorial Guinea was one of the most impoverished countries in Africa. During that time, the country had an incredibly low life expectancy of just 46 years, and the inhabitants were forced to survive on only $1 a day. Then, in 1995, they discovered a natural resource that would have the potential to change their economic well-being and quality of life forever. In this year, Equatorial Guinea discovered an immense amount of oil right off the coast of the country. Just nine years after this finding, all major US oil companies, notably Exxon-Mobile, Marathon Oil, and Amerada Hess, were drilling for oil in this once poverty-stricken country. After this notable discovery, Equatorial Guinea was generating $4 billion in revenue per year solely from the oil drilling industry. However, the inexperienced leaders that governed the country entered into a contract where they agreed to give 80%
In 1958, oil was first discovered in Nigeria. The discovery has led to the transition from agriculture-based economy to that of oil economy. One would believe that a country that produces a numerous amount of oil used to support the world with energy would have improved domestic infrastructures and economic development. Unfortunately, this is not the case in Nigeria. Nigeria has suffered since the discovery of oil and is still suffering till this day. Not only has it created conflicts between other nations and Nigeria but it has also divided the country into groups, which has fueled civil wars and tension between the government and the people. This is why the topic is a geopolitical event but before trying to understand how it is geopolitical, one should understand what geopolitics is.
Nigeria has been a country in political turmoil for a long time. The country was created in 1914 under British colonial rule and at that time it was considered a protectorate. It was not until 1960 that Nigeria received independence from the United Kingdom. One of Nigeria's problems politically is that it has over three hundred different ethnic groups. The three largest of these are the Hausa-Fulani, Igbo, and Yoruba. At the time of the independence of Nigeria it was split up into three states with each state being under the control of one of the major ethnic groups. The natural resources of the other 297 ethnic groups were exploited for the major three groups,
Most children in the Niger delta have little or no education, due to lack of funds from their parents who have lost their lands and have no jobs because of limited opportunities. The Niger delta government and the oil companies have refused to look into the situation; instead they favor their close relations neglecting the masses. Corruption in the Niger delta has led some youths in taking drastic measure in order to put food on their table. For example, Ikechukwu Efe an indigene of the Niger delta said that some of his friends created their own “oil refinery”, which is made up of crude oil in metal barrels with controlled heat from fire woods. This is a dangerous process in refining crude oil but the degree of poverty in the state left his friends with no choice. If only the government of the Niger delta have created jobs with the wealth of the state Ikechukwu’s friend would not have to put their lives in danger. Until corruption is put to an abrupt the people of the Niger delta will continue to live in poverty.
"You produce the oil from our lands, but we get no benefit from it. Look around, does this look like an oil-producing community? Does this look like Saudi Arabia?" . This angry riposte, from Vinkaviks Ekariko at a meeting between chiefs of a local community in Nigeria 's now volatile Niger Delta region and officials of a Multinational Oil Corporation , reflects Amao’s view that, home jurisdictions in vulnerable areas are generally perceived to be powerless when it comes to the operations of large organisations particularly multinational corporations(MNCs) situated in their area . According to Mujih, MNCs operate on a large scale throughout the world producing both constructive and damaging consequences . He proffers the promotion of economic growth as a constructive consequence of their operations; while on the negative side, he accuses MNCs, particularly those in the extractive industries of colluding with the governments of their host countries, to inflict human rights abuses, damage the environment and consequently, destroying the way of life of local communities .
In 2003, construction ended on a pipeline project more commonly referred to as the CCPP (Chad Cameroon Petroleum Development and Pipeline Project). The main actors in this project - besides the World Bank - consisted of a triumvirate of oil companies with Exxon-Mobil at the helm, along with Petronas Malaysia & ChevronTexaco. The project was under many watchful eyes in the global political theater as it hoped to prove as a model for other developing countries. It also sought to break the spell of the “resource curse” which “it is generally known, is that countries rich in natural resources, specially oil, tend to suffer from lower living standards, slower growth rates and higher incidence of conflict than their resource-poor counterparts.” (Auty, 1997)
The Niger Delta has been a source of illicit international business deals (like the trans-Atlantic slave trade), as far back as the 15th century. Today a new form of syndicated criminal proclivity is threatening the very foundations of Nigeria’s petroleum industry, and by extension, the Nigerian economy, as well as putting tremendous pressure on Chief (General) Olusegun Obasanjo. That problem is the "illegal bunkering" of crude oil and/or its derivatives.
The petroleum sector began to add significant role and shape to the Nigerian economy and the political arena and destiny of the country in the early 1060s. However, when Nigeria became an independent nation in 1st October 1960, Shell – BP began to give out its acreage and its exploration licenses were converted in to prospecting licenses that allowed development and production ( Bamberg, 2000; Vassilion, 2009). Following the increase dominance of the Nigerian