Chapter 899 Niger Delta

This attack on the South Mira drilling platform took place in the Niger Delta region, in the southern part of Nigeria, West Africa, covering an area of ​​36,000 square kilometers. There are lakes, swamps, and abandoned river bends everywhere. It is rich in oil resources, has a hot and humid climate, and has a population of more than 1 million. It is the fourth largest delta in the world.

As we all know, Nigeria has rich oil and gas resources, but almost all of Nigeria's oil and gas production comes from the Niger Delta, which is the twelfth largest oil and gas rich area in the world, with proven recoverable oil reserves of 4.5 billion tons, accounting for 2.2% of the world's proven oil reserves, and proven recoverable natural gas reserves of 2.7 trillion cubic meters, accounting for 1.4% of the world's proven natural gas reserves.

In Nigeria's domestic oil industry, Shell occupies an important position. For example, the South Mira drilling platform that was attacked this time was hired by Shell.

The reason is that Shell was the first company to discover and develop Nigeria's oil resources, and its oil mining activities in Nigeria can be traced back to the colonial period.

In 1937, Shell was allowed to conduct crude oil exploration in Nigeria, becoming the first oil company to enter Nigeria.

In 1956, Shell discovered oil in the Niger Delta in Nigeria and began commercial exploitation in 1958, producing 6,000 barrels per day.

With Nigeria's independence in 1960, Shell participated more deeply in Nigeria's oil field drilling, pipeline laying, refinery construction and port facility development.

At the same time, large European oil companies such as Total and Elf also entered Nigeria.

After the 1970s, Shell's business in Nigeria expanded further. Today, Shell operates more than 1,000 drilling wells, 87 flow stations and more than 6,000 kilometers of oil pipelines in the Niger Delta in Nigeria, with a daily oil production capacity of more than 1 million barrels.

Shell's position in Nigeria is not insignificant.

In the field of oil development, Shell, as the earliest developer, has long occupied a monopoly position.

Before 1979, in the Niger Delta region with the highest oil reserves, Shell's oil production exceeded half of the total regional production, exceeding the total production of 10 large oil companies such as Mobil and Elf.

In 1977, the Nigerian government established the Nigerian National Petroleum Company (NNPC), hoping to implement nationalization in the oil industry by acquiring shares.

So in 1979, the nationalized NNPC and Shell formed a joint venture company, Shell Nigeria Petroleum Development Company (SPDC).

Among them, the Nigerian National Petroleum Company (NNPC) holds 55% of the shares, Shell holds 30%, and the remaining oil companies share the remaining 15% of the shares.

In terms of shares, Shell is in an absolute dominant position compared to other foreign oil companies; in terms of management structure, although the major shareholder of Shell Nigeria Petroleum Development Company is the Nigerian National Petroleum Company, it is still an overseas subsidiary of Royal Dutch Shell, and the operator is still Shell, and all the general managers have been Shell personnel.

It can be seen that the company is still dominated by foreign capital represented by Shell.

After the establishment of the joint venture, Shell began to develop Nigeria's deepwater oil fields - 38% of the entire Niger Delta region is located on land, 21% is located on the continental shelf, and 41% is in the deep sea.

However, the Niger Delta region is not so peaceful. There are many anti-government armed forces here, the most important of which is the "Niger Delta Liberation Movement".

They often attack oil companies and kidnap hostages.

According to statistics, more than 300 foreigners have been kidnapped in this area since 2006.

The anti-government armed forces in the Niger Delta region are slightly different from those in other countries. They can be called "oil and gas parasitic" anti-government armed forces.

The emergence of anti-government armed forces in the Niger Delta region has a specific socio-economic background - the economic contradictions, ethnic contradictions, and intergenerational contradictions in this oil and gas producing area are intertwined, triggering complex conflicts between the government, companies and local people, and the failure of peaceful resistance ultimately makes the people choose to fight for their own interests in the form of armed struggle.

In 1914, the British Nigerian Colony and Protectorate Government promulgated the Mineral Act, which stipulated that all types of mineral resources belonged to local governments, and the income was naturally used for local social development.

After Nigeria's independence in 1960, successive federal governments, from the perspective of political integration and economic coordination, were committed to controlling as much oil and gas revenue as possible, and accordingly formulated a new Petroleum Act.

According to the Act, the previous principle of local autonomy was abolished, all oil and gas resources belonged to the federal government, and the oil and gas revenue of oil and gas producing areas was distributed by the federal government through the central fund.

Since then, the proportion of tax revenue available to oil and gas producing areas has dropped sharply year by year, from 100% in 1953 to 1.5% in 1984, and only increased slightly to 3% in 1992.

In other words, local governments in oil and gas producing areas benefit less directly from oil and gas revenue.

In addition, although the federal government established a development derivative fund for oil-producing areas from its oil and gas tax revenue in 1992, the fund's management organizations, the Oil and Mineral Areas Development Commission (OMPADEC) and the Niger Delta Development Commission (NDDC), are seriously corrupt and bureaucratic, and their role in promoting economic and social development in the delta region is very limited.

Since the oil and gas industry is obviously technology- and capital-intensive, it does not drive enough employment in the resource-rich areas and has limited contribution to the development of local communities. In this case, the share of benefits from oil and gas development is reduced to the minimum, which means that the delta region can neither benefit from the development of the oil and gas industry nor the start-up capital necessary for the development of other industries.

While the distribution of benefits is being reduced, the huge environmental costs generated by the development of the oil and gas industry also harm the interests of local people.

This "negative asset" is mainly reflected in soil, water and air pollution.

According to statistics, in the half century before 2013, there were more than 6,000 oil spills in the delta region, causing more than 1.5 million barrels of oil and gas to leak, polluting local soil and water sources; the random laying of a large number of oil pipelines changed the original river direction and destroyed fish spawning grounds; and the various associated gases vented and burned during oil and gas extraction caused serious pollution to the atmosphere in the region.

The Niger Delta region has become one of the most polluted areas in the world. Not only has the health of residents been damaged, but the local traditional fisheries and agriculture have also suffered a devastating blow, seriously affecting the normal life of local residents.

However, in order to ensure the continued growth of oil and gas revenues, the Nigerian federal government has long ignored the environmental problems in the delta region.

The 1969 Petroleum Act exempted oil and gas companies from their obligations in local environmental protection; the 1978 Land Use Ordinance stipulated that land that had not yet been assigned to the federal government belonged to the governor (appointed by the central government at the time). Oil and gas companies could drill wells at will without consulting local communities, and local communities lost the right to bargain with oil and gas companies and obtain environmental compensation.

Whether in the distribution of oil and gas resources or the sharing of oil and gas resources costs, the Nigerian federal government has long ignored the interests of the people in the Delta region.

This energy-rich area has therefore become the poorest place in Nigeria.

According to incomplete statistics, by the end of the 20th century, the poverty rate in this area was as high as 74.8%.

73% of people lack safe drinking water, 70% of households have electricity shortages, most community education facilities are in short supply, the enrollment rate of primary school-age children is less than 40%, and only 2% of the local population can obtain basic medical care. The average life expectancy of local residents is only 46.8 years old, and the mortality rate of children under 5 years old is as high as 20%.

By 1999, when the Abubakan military government returned power to the people, the Nigerian federal government could no longer ignore the poor socioeconomic conditions in the Delta region.

In order to quell the growing public discontent, the government increased the proportion of energy income available in the oil and gas producing areas to 13% that year, but this was still not enough to pay for the price paid by the people in the Delta region for nearly half a century, so the public generally believed that this proportion should be increased to between 25% and 50%.

The limited concessions made by the federal government still do not match the interests of the people, and dissatisfaction is widespread.

A survey in 2005 showed that more than half of the residents in the delta region believed that the federal government was the culprit that hindered local development.

Another survey in 2007 showed that as many as 36.23% of the people were dissatisfied and expressed their willingness to participate in or support armed resistance to the government.

The evolution of the anti-government armed forces in the Niger Delta region, from the initial small scale to the later organized large-scale, is also related to the political situation in Nigeria.

In 1999, the Nigerian military government returned power to the people, and Nigeria restarted the process of democratization.

However, due to the imperfection of the corresponding regulatory system, a large number of frauds occurred in Nigeria in the 2003 election.

In order to win the election, a few politicians did not hesitate to hire and arm radicals to form armed gangs loyal to them and force local community residents to vote for them.

Among them, the "Niger Delta People's Volunteer Army" was initially supported by Peter Odili, governor of Rivers State.

After the election, in order to prevent the organization from becoming too powerful, Odili supported the "Niger Delta Militia" to confront it and check and balance each other.

Finally, the Niger Delta People's Volunteer Army announced an "all-out war" with the government in September 2004, demanding that all oil and gas companies immediately stop operations and leave the delta area. At the same time, it launched a large-scale sabotage operation against oil and gas production facilities in the delta area, which had a huge impact on Nigeria and even the world crude oil market.

As the clearing operation was difficult to work, the Obasanjo government had to seek a solution through negotiations.

Finally, the "Niger Delta People's Volunteer Army" reached a ceasefire agreement with the government in October 2004.

The government promised to give amnesty and jobs to the militants, and to recover their weapons at a price of US$1,800 per piece, while the latter promised to stop confronting the government.

However, the ceasefire agreement only temporarily calmed the armed conflict in the delta area.

On the one hand, the amnesty project has failed to effectively help militants return to society, and various conflicts caused by oil and gas resource development have not been completely resolved; on the other hand, the government’s “purchase price” for weapons is much higher than the “market price”. It has played a role in helping militants upgrade their armaments.

In September 2005, Asari Dokubo, the former leader of the Niger Delta People's Volunteer Army, was arrested by the government on charges of secession, triggering a strong backlash from society.

In January 2006, the "Niger Delta Liberation Movement" was established. In the following six months, it launched nearly 20 attacks on oil and gas companies, causing more than 2 billion US dollars in economic losses (accounting for 32% of Nigeria's total oil and gas revenue that year). And led to a large-scale withdrawal of international oil and gas companies.

Since then, anti-government armed forces such as the "Niger Delta Liberation Army" and the "November 1895 Movement" have been established one after another, and they have fiercely competed with the government or each other over oil and gas resources.

By 2009, Nigeria's oil and gas exports had dropped by 38.5% compared with 2006.

As a company with significant oil and gas interests in the Niger Delta, Shell has had to ensure the safety of its oil fields in a variety of ways over the years, including regularly paying "protection fees" to these rebels, funding to upgrade government forces, hiring and Strengthen your own security capabilities, etc...

But as the attacks have intensified recently, Shell eventually hired Protector Military Services, a company based at the Colomango base, to secure some of its oil fields.

This is the origin of the previous scene. Whether it is the security personnel on the oil platform or the supporting armed helicopters, they all belong to the Protector Military Service Company.

Prior to this, Protector Military Services Company exported a large number of security personnel to London to conduct "labor export" for the G4S Group and assist in the security work of the London Olympics.

After the Olympics, most of these personnel returned to Colo - because the United States began to withdraw from Iraq and Afghanistan, correspondingly, the demand for military contractors in these places was decreasing.

This requires Protector Military Services to open up more businesses, including providing security for Nigerian oil companies.

Currently, Protector Military Services Company has built a security base in the Niger Delta region. More than 1,000 armed security personnel and corresponding weapons and equipment have been deployed here.

Although the security quotation of Protector Military Services Company is higher than that of Shell's previous security company, their strength is still very satisfactory to the other party.

At the same time, since the beginning of the Niger Delta conflict and as the security situation has continued to deteriorate, many international oil companies have intended to divest from Nigeria, including major oil companies such as Total and ENI.

United Energy Group is also internally evaluating the feasibility of taking over the oil shares of these oil companies in Nigeria. After all, the fundamental contradictions in the Niger Delta region have not yet been resolved. Even if tough methods are used to suppress the anti-government armed forces, as long as If the distribution of benefits is not recognized by the local people in the delta, the anti-government forces will still have the ground to survive.

But at least now, United Energy Group and Shell have also begun to cooperate - they have a three-way cooperation with the Colo Energy and Chemical Group, a subsidiary of the West African Group, to build a petrochemical industry base about 90 kilometers away from Kololoti Port. , investing in a refining base where part of the crude oil produced in Nigeria will be processed and sold around the world.

The total investment in this refining and chemical base exceeds 15 billion US dollars, including two refineries and a chemical plant. The current base in Kolo has become the largest petrochemical base in West Africa, and because Loti has a related petrochemical college , coupled with years of training, Colo has also been able to provide mature industrial workers and front-line technicians for these petrochemical plants.

Of course, Nigeria is not without refining bases, but Nigeria’s daily crude oil production was close to a historical high of 2.5 million barrels. However, due to old equipment, theft and vandalism, the current production is less than 2 million barrels.

Similarly, due to poor management, the four state-owned oil refineries in Nigeria have a refining capacity far below their designed capacity of 445,000 barrels per day.

Therefore, the production capacity of Nigeria's domestic refineries cannot absorb their oil production, and most of the crude oil they produce is directly exported.

Now the crude oil is transported to the petrochemical base in Colo for refining. The distance is not far and it can be said to be very convenient.