The Politics of Oil Extraction in Nigeria

1. The Politics of Oil Extraction in Nigeria Omolade Adunbi, PhD Assistant Professor The University of Michigan Ann Arbor oadunbi@umich.edu

2. Introduction • Nigeria gained independence from Britain on October 1st 1960. • Before independence, Nigeria operated an agrarian economy based on cash crop products such as cocoa, peanuts, and palm oil. • Oil was discovered in commercial quantities at Oloibiri in the Niger Delta in 1956 with commercial exploitation starting in 1958 with 5100 bpd. • There are 606 oil fields in the Niger Delta with 355 onshore and 251 offshore. • Daily production is at 2.5 million bpd with 45% of this coming to the United States. • Today, oil contributes over 90% to total revenue earnings of the government.

3. Key Actors in the Oil Industry • ExxonMobil Producing, • Shell Petroleum Development Company, • ChevronTexaco • Agip • ConocoPhillips, • Ashland, • Pan-Ocean • TotalFinaElf • China National Offshore Oil Corporation ( a new player) • India Oil Company Ltd ( a new player) • StatOil

4. Structure of Oil Governance • Oil economy governed through a joint venture between the Nigerian state and the oil corporations. For example: • The joint venture operated by Shell, accounts for more than 40% of Nigeria’s oil production at 899,000 bpd, with Nigeria National Petroleum Corporation owning 55%, Shell 30%, andTotalFinaElf10%, and operates largely onshore. • ExxonMobil, operating mainly offshore in the shallow waters of AkwaIbom (Qua Iboe), produces over 632,000 bpd, with NNPC’s stake at 60% and ExxonMobil’s at 40%. • The venture managed by Chevron, largely offshore inEscravos, produces approximately 400,000 bpd, with NNPC owning 60% and Chevron 40%. • Nigerian Agip Oil produces 150,000 bpd, mostly from onshore fields with NNPC’s acquisition at 60%, Agip’s 20%, and ConocoPhillips Petroleum’s at 20%.

5. Why Is oil important to Nation-States? • Oil extraction could help create a nation-state with two bodies: Political body (citizens) and natural body (the subsoil). • project a nation-state into the international capitalist system where natural resource money confirms for the state and the elite a nation on the path of ‘modernization’. • Transforms the state to a national landlord that rents out territories to corporations. • Centralizes the state and turns the state into an authoritarian enclave

6. Why Oil (Contd) • Oil transformed to be the only official state business and the politics of its management will become the business of politics • Distribution of rents create local market of elite consumers of mostly imported products. This would include importation of instruments of coercion. • Oil does not only produce wealth for the nation but also has the capacity to produce a particular culture that redefines citizenship (e.g. blackness/Africanness, sites for cultural production, FESTAC and Annual Abuja carnival) • Oil policy will be made synonymous with nationalistic economic policy that seeks to defend the nation’s subsoil. • The functions of the state become administrative and calculating organ that works for transnational capital. • Provision of social services and basic needs of citizens take the back seat. State’s allegiance to transnational capital remains sacrosanct while remaining unresponsive to increase in social inequalities.

7. What oil represents for Corporations • Corporations get operating licenses from the state to exploit oil resources. • Corporations imagine a world driven by capital through a supposed lens of ‘modernization’. • A form of modernization that is inscribed in neo-liberal reforms that transfer the wealth of an enclave into another. • Corporations’ activities produce an effect that alienates societies/communities where oil resources are located. • Corporations tend to depoliticize oil extraction. Thus, divorcing the environment from politics becomes a way of disavowing responsibility from social effects of resource extraction. • Corporations seek to reconfigure the ‘material, political and symbolic’ meanings of territory, nationhood and sovereignty. The state becomes a site where nature is made into a commodity that benefits corporations and the state but pauperizes the people who live where the commodities are located. • Profit sharing arrangements with the state position corporations as the business wing of the state.

8. What Oil Means to Environmental Groups • Environmental Groups engage in spectacular accumulation through: • Images of panoramic landscapes where exotic people and animals are used to communicate urgent problems in desperate need of the timely solutions that these organizations claim to uniquely qualified to offer • Present an audience of supporters with compelling virtual opportunities (problems) to be solved • Resources needed to solve the problem through a process of gift-given as a necessary instrument. • Symbolically connecting the past with the present in ways that create historical continuity. For example, presenting the environment as an Eden in the past that has been transformed to hell in the present by corporations. • Challenging the legitimacy of the nation-state over ownership of natural resources. For example, reiterating processes of communal ownership over state instituted legal regimes.

9. What Oil Means to Communities • Denial of Access to communal land • Some citizens of oil producing communities would be transformed into surveillance contractors for foreign oil firms. • Oil fields, flow stations, and pipelines become sites of conflict between and among communities • Community members become object for political manipulation, suffering economic deprivation with capacity to produce alternate governance/self-governing individuals and communities.