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Shell wins over village with cash and liquor cash

Inside Nigeria: Only a trickle of the country's oil wealth is reaching the people of the Niger Delta

Port Harcourt

In the 19th century, explorers and colonisers won over the natives of the Niger Delta with gifts of colourful beads and fine cloth. Today the goodwill of the indigenous communities comes a little more expensive - but not that much more when you consider that Shell is earning more than half a million dollars a day from the region.

All it took for the world's largest oil company to convince the chiefs of the tiny Sangama settlement in southern Nigeria to accept an oil rig on their doorstep was ready cash and hard liquor.

"Two and a half weeks ago when we moved in here, the local people erected a barrier of canoes and palm fronds across the channel so we couldn't tow the rig to the well-head," says Mojeed Alli, Shell's senior drilling engineer on the Searex 12 oil platform. "It was very annoying because we'd discussed everything with the chiefs on the local council. They'd asked for money, community help and drinks and we'd agreed."

Shell has been condemned worldwide - and faces the prospect of a prolonged boycott - because of its involvement in Nigeria and its perceived support for the Nigerian regime. Ken Saro-Wiwa, the Nigerian writer who was hanged despite international protests last month, had consistently campaigned against Shell's presence in his native Ogoniland, a little further north.

The chiefs of Bonny Council had, more precisely, requested 130,000 naira (about pounds 1,000), assistance in repairing a dilapidated school building, a dozen bottles of Remy Martin cognac and a dozen bottles of Gordon's Dry Gin. According to Shell, their demands were met. Everything seemed to be going swimmingly. The company even paid a courtesy visit to Sangama's head man, Chief John Jumbo, the day before the huge rig was due to be installed. As a goodwill gift, Shell offered him another 10,000 naira and a bottle of Gordon's Dry Gin. He gratefully accepted.

But when the day came, dozens of canoes were lined up across the channel, blocking it.

"There were about 100 people ahead of us," recalls Mojeed Alli. "If we'd pressed ahead we would have risked killing them. So we took a boat and went to get Chief Jumbo who was in Port Harcourt. It was too late to move the rig into position by the time he'd sorted things out. But they removed the barricade at dawn the following day and we were able to go ahead with the operation." It cost Shell promises of 35 jobs and another 50,000 naira to clinch the deal.

"To be honest, we're just paying them to work at home, cleaning up the village or whatever," admits Mojeed Alli. "We have a full complement of about 100 expatriates and Nigerians on the rig. It would be too dangerous to have any locals here. Anyway, the rig will be moved to another location in a couple of months."

From a Shell helicopter, Sangama can be seen as a straggle of small buildings and huts nestling amid the marshy wastes of the Niger Delta.

Fishing peoples have lived in the Niger Delta for centuries, their settlements perched on the edge of snaking rivers and creeks of brackish, brown water. The region's inhabitants would have lived the same undisturbed lives as their forefathers had not oil been discovered beneath the ground nearly four decades ago.

The advent of the oil industry has brought little real wealth to villages such as Sangama. Nor has it brought any jobs. What money has been paid out to the chiefs by way of inducement or compensation rarely reaches the ordinary people.

"A few chiefs use the money they get to develop their communities," says an oil worker on Searex 12 as a fisherman paddled his dug-out canoe in the channel below. "But a lot of the chiefs keep the money for themselves. Though they always buy a cow or a goat which they sacrifice to appease the water gods."

Whether or not Shell feels capable of satisfying the local gods, it is going all-out to placate the Delta's human inhabitants. In recent years the Anglo-Dutch conglomerate has launched a major community aid programme in order to win local acceptance.

This programme - currently worth more than $20m per annum - has been given new impetus by the execution of Saro-Wiwa and eight other activists. His environmental and political campaign in the Ogoni region resulted in economic defeat for Shell, forcing it to pull out of Ogoniland. Determined that this should not happen again, Shell has put its public relations machine into overdrive.

"We are building classroom blocks, paying science teachers and offering scholarships," explains Precious Omuku, public affairs manager of Shell's eastern division in Nigeria. "We are also investing in health and agriculture."

In the village of Aminigboko, a marble plaque proclaims that Shell has funded a classroom block at the local secondary school. It is one of 20 blocks they now erect per year.

"Shell does help the community and we're grateful for that because the government isn't doing much to provide facilities," says one teacher. "But the company doesn't give much employment. We have more than 1,000 pupils but I know of only one whose parents are employed by Shell."

Aminigboko also boasts a new community hospital, one of 11 which Shell has built in Rivers State. It is well maintained and fully staffed.

"We work closely with Shell," says the village chief, Denton Agbala. "They put more money into this community than they did in Ogoniland. We are grateful, but then we're simply laymen. We accept what they give us. But we don't know how much profit they're making from the oil under our land."

About 14 per cent of Shell's global oil production comes from the Niger Delta: nearly one million barrels a day. Operating as a joint venture partner with the Nigerian government and two other European oil companies, Shell receives a share of some 70 cents per barrel. For every $16 barrel of oil sold, the Nigerian government gets more than $11 by way of taxes and royalties.

How much of this profit is contributed by the oil wells around villages such as Sangama and Aminigboko is difficult to compute. An infinitesimal percentage of total production would afford untold wealth in such subsistence communities.

Local inhabitants would like a share of the revenue, or at least some jobs in the industry.