The Oil and the Glory

Shell infiltrated the Nigerian government — but was it worth the trouble?

One of the latest WikiLeaks scoops is that Royal Dutch/Shell managed to infiltrate employees into every important Nigerian ministry, and obtain regular inside intelligence on government doings, as my colleague Beth Dickinson wrote late last night. My question is, if Shell is so capable and has Nigeria so well wired, why does it continue to ...

DAVE CLARK/AFP/Getty Images
DAVE CLARK/AFP/Getty Images

One of the latest WikiLeaks scoops is that Royal Dutch/Shell managed to infiltrate employees into every important Nigerian ministry, and obtain regular inside intelligence on government doings, as my colleague Beth Dickinson wrote late last night. My question is, if Shell is so capable and has Nigeria so well wired, why does it continue to be the main target of attack by local militants?

This is a company that three weeks ago yet again declared force majeure to protect itself against lawsuits for non-delivery of some 125,000 barrels a day of oil because of militant attacks on its pipeline network in the country. It could take until next month to repair the Escravos-Warri pipeline, the company says.

All in all, Shell produced 629,000 barrels of oil a day last year, which sounds like a lot until you consider that its facilities are capable of producing more than 1 million barrels a day. Much of that difference is accounted for by massive attacks on its installations. In 2008, Shell also had a bad year, with militants attacking and shutting down its flagship 200,000-barrel-a day Bonga oil platform. Two years before that, Shell threatened to pull out of the Niger Delta entirely after a spate of attacks on its installations resulted in numerous deaths and kidnappings.

This is not meant to be snarky. But is the Nigerian government all that important in this case? Given the stakes, one does wonder if Shell is putting as much effort into infiltrating the Movement for the Emancipation of the Niger Delta, the group responsible for much of the mayhem. A five-year-old story by Michael Peel, the Financial Times‘ former Nigeria correspondent, reported that militants and others were stealing somewhere between 275,000 barrels a day and 685,000 barrels a day of oil from Shell and other pipelines, at the time worth between $1.5 billion and $4 billion a year. They were spending much of that money on weapons — which in their business counts as reinvestment into future attacks.

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