Can Petroleum Aid development?

The companies’ claim that they bought the block from the state, not Malabu, is disingenuous, says Mr Mayne of Global Witness. It is also contradicted by Nigeria’s attorney-general, Mohammed Bello Adoke, who told a parliamentary committee last July that the companies “agreed to pay Malabu”, with the government acting as an “obligor” and “facilitator.”

The EFCC’s report states: “Investigations conducted so far reveal a cloudy scene associated with fraudulent dealings. A prima facie case of conspiracy, breach of trust, theft anmd [sic] money laundering can be established against some real and artificial persons.” Officially, the EFCC’s investigation is still open, but a source familiar with it says that its sleuths have been discouraged by higher-ups from moving forward. However, other countries’ fraudbusters have taken an interest. At least one of the parties involved in the oil-block sale has been contacted by America’s Department of Justice.

The saga is a striking example of an ethical dilemma that is growing more acute for international oil companies. They are desperate to replace their shrinking reserves with new finds, but many of the most attractive fields are in unstable or poorly governed places.

Mr Hughes argues that when foreign companies turn a blind eye to questionable aspects of a deal, it can sometimes benefit developing countries with natural resources. The publicly traded oil majors are, on balance, a force for good, raising overall standards of behaviour by trying to operate as cleanly as possible in most circumstances, he says; better that than leaving the field to less scrupulous operators.

Global Witness prefers to see the OPL245 affair as “a lesson in corruption” that demonstrates how important it is for rich-world governments to press on with transparency initiatives

As part of a deal to spare the company a damaging criminal conviction in that case, Shell agreed to what was, in effect, a probation order, by giving an undertaking to the US Department of Justice to tighten up its internal controls in order to stay in compliance with America's tough anti-corruption laws.

Matthew Page worked for the US State Department in Nigeria for 15 years. He told the BBC: "At a time when Shell should have been cautious having just settled a previous case, rather than walk away from a deal with clear corruption risks, they doubled down."

Fortunately, sociologist Michael Schwartz, an old-time TomDispatch regular, is back after a long absence to remind us of The One Fact in Iraq, the one we should never forget. Tom

Under the seething ocean of Sunni discontent lies a factor that is being ignored. The insurgents are not only in a struggle against what they see as oppression by a largely Shiite government in Baghdad and its security forces, but also over who will control and benefit from what Maliki -- speaking for most of his constituents -- told the Wall Street Journal is Iraq’s “national patrimony.”

When, in 2009, the Obama administration first began withdrawing U.S. combat troops, Iraqis everywhere -- but especially in Sunni areas -- faced up to 60% unemployment, sporadic electrical service, poisoned water systems, episodic education, a dysfunctional medical system, and a lack of viable public or private transportation. Few Westerners remember that, in 2010, Maliki based his election campaign on a promise to remedy these problems by -- that figure again -- increasing oil production to six million barrels per day.

none of this oil wealth trickled down to the grassroots, especially in Sunni areas of the country where signs of reconstruction, economic development, restored services, or jobs were hard to discern. Instead, the vast new revenues disappeared into the recesses of a government ranked by Transparency International as the seventh most corrupt on the planet.

In a rare moment of ironic insight, Time magazine concluded its coverage of the F-16 purchase with this comment: “The good news is the deal will likely keep Lockheed’s F-16 plant in Fort Worth running perhaps a year longer. The bad news is that only 70% of Iraqis have access to clean water, and only 25% have clean sanitation.”

With conditions worsening, Sunni communities only became more insistent, supplementing their petitions and demonstrations with sit-ins at government offices, road blockades, and Tahrir Square-type occupations of public spaces. Maliki’s responses also escalated to arresting the political messengers, dispersing demonstrations, and, in a key moment in 2013, “killing dozens” of protestors when his “security forces opened fire on a Sunni protest camp.” This repression and the continued frustration of local demands helped regenerate the insurgencies that had been the backbone of the Sunni resistance during the American occupation. Once lethal violence began to be applied by government forces, guerrilla attacks became common in the areas north and west of Baghdad that the U.S. occupiers had labeled “the Sunni triangle.”

Bassey noted, for instance, that although the PIB is a good first step, the document as packaged, is not as strong as it ought to be. According to him, the PIB does not have stringent pro-people and pro-environment provisions, as the country, despite the PIB, will still be having illegal routine gas flaring. He blamed the delay in passing the bill on what he described as ‘toxic politics’ and pressure from the IOCs who have openly said they would not accept laws that curb their excessive profits as well as wrong perception by some legislators that provision of funds for communities mean more money to the oil-bearing states.

Nnimmo argued that although, the PIB makes the offer of money to oil-bearing communities on one hand, it takes it away on the other. “The PIB criminalises communities when it says that if oil facilities are tampered with then the communities, local government areas, and states would pay. Communities are not the policemen of oil facilities. The PIB speaks the old language of subsisting laws that free IOCs of responsibility where facilities are interfered with by third parties. That has made the claim of sabotage the favourite refrain of the oil companies even before incidents are investigated. The PIB fell into the same anti-people trap,” he explained.

Bassey insisted that what Nigeria needs to do right now is to “massively increase oil revenues by halting oil theft. We are not talking about poor villagers scooping crude oil in buckets and jerry cans. Those also need to be stopped. We are talking about the industrial-scale oil theft going on in the oil sector. The official figure bandied by the Ministry of Finance as well as the National Assembly is that 400,000 barrels of crude oil are stolen everyday,” he said As for local operators, Bassey and other experts and stakeholders said the ability of local operators to hold their own would depend, to a very large extent, on better collaboration, better host community management, proper valuation and raising smart financing. They also require huge investment in knowledge, research and development (R&D).

Mutiu Sunmonu, Managing Director of SPDC, said the divestment of his company’s assets was a deliberate measure to encourage indigenous participation in the upstream oil and gas industry. His words: “We want to create a new set of indigenous players in Nigeria’s oil and gas industry within the next 10 to 20 years from now, while the IOCs concentrate on more difficult issues and also allow us focus on material oil and gas fields.” The divestments are seen by some industry watchers as representing the single largest opportunity for Nigerian operators with the requisite expertise and capital to emerge as major upstream players.

Donziger and the "named plaintiffs" in the litigation against Chevron have filed a petition with the Second Circuit Court of Appeals to have Judge Kaplan removed from the case for bias. In an extraordinary move, the appellate court has set oral argument on the issue for September 26th. If Kaplan gets tossed, Chevron’s strategy would suffer a devastating setback.

And the reality is that we don’t really know what Chevron is doing behind the scenes. Kroll has admitted compiling “20 to 30” reports on Donziger, who along with his family has been followed around Manhattan and put under surveillance by unknown plainclothes operatives.

Yet Idku remains defiant, even in the face of the Egyptian Liquefied Natural Gas  Project, a massive natural gas liquefaction facility on the nearby beach. The oil operations are run by two joint ventures Rashpetco and Burullus, whose shareholders include the British BG, Malaysian PETRONAS, French Gaz de France,  and the Egyptian state companies EGAS and EGPC .

Unfortunately, BP has not given up completely. Instead of recognising that it's not wanted, the company has moved to a new location futher east along the coast. Now the struggle moves to Mtubas  in Kafr elSheikh, the new proposed site for BP’s gas plant.

To day, these demands remain unmet. So when British Petroleum eyed Idku for an onshore natural gas processing plant, the community took matters into its own hand: it mobilized to stand up against the proposed project. Roads were blocked, a sit-in occupied the construction site, BP's office was raided and popular assemblies took place in the street. The organised local campaigning and resistance by the Idku community managed to halt BP’s plans.

The movement for transparency is a big help. But that question doesn’t address the question of the division of profit between the country and the company and what is a just and right distribution of profits. To me this isn’t just a movie about Africa, or what is going to happen in Ghana, it is also a movie about how New York and Texas are connected to these places.

It is interesting when you think about the movie, when you think about what makes someone big, it’s money and it’s reputation. Both of those things, they get mentioned over and over again. And they are linked but they are not the same thing.