Drill, Baby, Spill – and Burn
Chevron's Jan. 16 offshore gas rig explosion, which killed two expatriate workers, was a surreal disaster that showed vividly the extreme risks that Chevron takes to get a barrel of oil.
The natural gas seeping to the surface burned for four months – with the ocean surface literally on fire, many miles from the coast – before finally being extinguished in May. This Dante-esque scenario has become a national scandal. The government's National Oil Spill Detection and Response Agency demanded in early May that Chevron pay an administrative fine of $3 billion.
This would be an unprecedented step for Nigeria, which has long turned a blind eye to abuses committed by Chevron and other oil companies. But President Goodyear Jonathan, elected in 2011 with a reputation as a defender of his native Niger Delta, appears to be making some effort to stand up for his people. Whether he will continue to do so – and whether the courts will back up the government's $3 billion demand – remains to be seen.
The Nigerian Oil Ministry currently is in the process of deciding whether and how to renew Chevron's 20-year operating licenses. Small details about royalties, taxes and other regulations will make a difference of billions of dollars. Will Chevron keep getting a sweetheart deal, or will the Nigerian government finally do justice? Chevron has been proved guilty in Ecuador, but not yet in Nigeria.
Long History of Abuses
For more than five decades, Chevron has drilled onshore and offshore Nigeria, generating billions of dollars in profits for the company and for corrupt government officials.
Since the 1960s, the people and communities living near the shores of Africa's richest oil boom have become poorer, have shorter life expectancies, have little or no access to clean water, and have virtually no control over their own affairs.
Internationally recognized as one of the world's "biodiversity hotspots," the Niger Delta hosts many threatened species unique to the world and one of Africa's largest mangrove forest ecosystems. Chevron's operations threaten all this with releases of toxic airborne and waterborne petroleum by-products through leaks, waste discharges and the practice of gas flaring. This increases the risk of premature deaths, child respiratory illnesses, asthma and cancer.
Chevron's Assets in Nigeria
Chevron is the third largest oil producer in Nigeria, and invests US $3 billion in the country annually.
Under a joint venture with the Nigerian National Petroleum Corporation, the company operates and holds a 40 percent interest in 13 concessions that cover some 2.2 million acres in the Niger Delta region. Chevron's deepwater interests in Nigeria include the Agbami Field and the Usan project. The company is also involved in natural gas projects in the western Niger Delta and Escravos, and the largest shareholder in the West African Gas Pipeline.
In 2011, the company's net daily production in Nigeria averaged 232,000 barrels of crude oil, 142 million cubic feet of natural gas, and 4,000 barrels of liquefied petroleum gas.