The Niger Delta oil and gas industry has played a key role in supplying hydrocarbons to the global economy, but host communities have paid a heavy price. There has been widespread oil pollution, while the industry has also given rise to oil sector-related crime, such as oil theft, illegal refining, the sabotage of oil facilities, piracy, and the kidnapping of oil workers.
Petrocrime has deterred further investment, resulting in a fall in Nigerian oil production from 2.5 million barrels a day (b/d) in 2011 to a low point of one million b/d in mid-2022, cutting the country’s export revenues. Throughout all of this, it is the people of the Niger Delta who have been most impacted.
Soil and water contamination from oil pollution severely curtails crop cultivation and fishing. Crops produced on polluted land can contain high levels of chromium, lead and mercury, while local farmers report lower yam and cassava harvests.
It also makes water undrinkable. Rather than using contaminated boreholes, many families are forced to buy drinking water, a huge financial strain in an area where 43% of the population lives in poverty, according to the Global Impact Project in 2017. Finally, Delta pollution is linked to higher incidences of specific illnesses, including cancer and respiratory and cardiovascular diseases.
The amount of oil spilt in the Niger Delta since the industry began in 1958 is unknown, but a United Nations estimate of at least 13 million barrels is widely quoted, while the problem of gas pollution is often ignored. Some oil reserves have associated natural gas. Where there is no commercial outlet for this gas, it can be burnt off – or flared – driving climate change, pumping pollutants into the air and creating acid rain. In 2022, Al Jazeera reported that the average life expectancy in the Niger Delta was 41, 10 years lower than the national average.
A 2011 UN Environment Programme report highlighted the pollution levels in Ogoniland, finding levels of benzene – a carcinogen – 900 times above the World Health Organization’s maximum recommended level. This prompted the Nigerian government to create a dedicated clean-up organisation, the Hydrocarbon Pollution Remediation Project, which is part-funded by the oil companies. However, a BBC investigation in February this year revealed that clean-up operations in the area failed to solve the problem.
Protests against oil pollution and the lack of development in the Niger Delta began in the 1980s. Nine protest leaders in Ogoniland, including renowned writer Ken Saro-Wiwa, were arrested and executed in 1995 as the military regime sought to suppress local opposition.
The situation did not improve when Nigeria returned to civilian rule in 1999, with a minority of campaigners taking direct action against the industry, sabotaging pipelines and other infrastructure. Some forms of protest appear to have morphed into criminal gangs, which created a secondary problem for local people. These gangs engaged in oil theft, also known locally as bunkering, and there is some overlap between the militants and the petro-gangs.
Pipelines can be attacked to provide gangs with an opportunity to fit illicit spur pipelines to steal oil, or attacks can be motivated by a desire to drive the oil companies out of the region. Pipelines are also targeted in retaliation for efforts by the oil companies and security services to stem the theft. The volume of oil stolen is difficult to calculate and varies over time, but averages about 150,000-200,000 b/d. Although the oil gangs are widely believed to operate with the cooperation of elements of the army, the navy, the police and local leaders, most people in the region do not benefit from the illicit trade.
Oil and gas exports account for 90% of Nigeria’s foreign exchange earnings; indeed, the main source of income in the rest of the economy is tapping into oil revenues in one form or another. Oil generates about 65% of the federal government’s income, while many companies work as contractors for the industry, and corrupt politicians have simply siphoned off oil revenues for personal use.
With few other economic opportunities in the Delta, it is no surprise that some local people have adopted the same strategy by simply taking the oil themselves. The oil industry does provide employment for local people, but although oil companies offer some training schemes for more highly skilled positions, most jobs are relatively low-paid positions, such as security and catering.
Some of the stolen oil is taken offshore by barge and loaded onto tankers for global distribution, but some is also refined illegally in thousands of artisanal small-scale refineries hidden in remote parts of the delta. These local refineries employ crude technology operated by local people who are often paid very low sums for what is dangerous work.
In one terrible accident in April 2022, more than 100 people were killed because of an explosion at an illegal refinery in Imo State, where two big cauldrons were used to refine stolen oil into diesel and kerosene. Those involved in illegal refining often say they have few other job opportunities. Military offensives to identify and destroy illicit facilities often hit the headlines, but it is debatable whether this helps in the fight against organised crime or merely criminalises the poor.
Some local communities have taken advantage of oil pools created by pipeline leaks, sabotage, or illegal bunkering gangs to take tiny quantities of oil. In these cases, oil is taken in buckets and other small containers for use as cooking fuel or even unrefined as vehicle fuel. These pools are obviously extremely dangerous.
The poor security situation, including the threat of kidnapping, deters investment in other parts of the Niger Delta economy. Oil companies generally have budgets to invest in development projects. Still, local people complain about a lack of transparency and influence over how the money is spent, with much of it distributed through local leaders. The Niger Delta is one of the prime examples of the resource curse, whereby natural resource production results in socio-economic exclusion rather than development.
Army and naval forces have periodically launched offensives against the Niger Delta militants, resulting in civilian deaths and the destruction of property. The federal government adopted a different approach in 2009 when it launched a militant amnesty that allowed gang members to hand in their weapons and benefit from training and job opportunities, without any risk of prosecution. Yet neither approach improved the security situation.
Some measures have been implemented to ensure that producing areas benefit most from natural resources. States that host natural resource production are allocated 13% of all federal revenues from the sector. Four Niger Delta states, Akwa Ibom, Bayelsa, Delta and Rivers, receive 90% of this 13% oil derivation fund in compensation for the negative impacts of oil production.
The Niger Delta Development Commission administers that 13%, which added up to $40 billion between 2000 and 2020, but countless reports in the Nigerian press talk of inflated contracts and abandoned projects. The lack of socio-economic benefits means that relations between the Niger Delta communities and the federal and state governments are generally poor.
There have been repeated legal actions against oil companies for failing to clean up major pollution incidents. Shell’s local production unit, Shell Petroleum Development Company (SPDC), which has historically been Nigeria’s biggest oil producer, has been subject to claims relating to Ogoniland. It argues that it does clean up its spills, but that much oil pollution is caused by petrocriminal gangs involved in oil theft, sabotage and illegal refining. It also says that remediation work is sometimes difficult because of ongoing criminal operations in spill areas.
UK-based law firm Leigh Day has represented tens of thousands of Niger Delta inhabitants in separate civil cases in the High Court in London against the oil companies involved. In one case in January 2015, Shell agreed to pay $84 million in compensation for the impact of pollution on the community of Bodo, part of Ogoniland, in Rivers State.
Rather than paying all the money to local leaders, the law firm arranged for $3,300 each to be given to 15,600 fishermen and ensured they had bank accounts to receive the payment. This year, Leigh Day is pursuing legal action against SPDC on behalf of 50,000 inhabitants of two other Ogoniland communities for pollution caused between 1989 and 2020.
This unstable situation, which has persisted for more than 25 years, has prompted international oil companies such as Eni and Exxon Mobil to sell assets in the region. Most recently, in March this year, Shell sold its 30% stake in the SPDC consortium to a consortium of African companies called Renaissance Africa. Shell now intends to focus on offshore oil and onshore gas in Nigeria. SPDC has now been renamed Renaissance Africa Energy Company.
Whether this process is a good thing for the Niger Delta communities remains to be seen, as there is no guarantee that African-owned companies will be able to manage onshore assets with lower levels of environmental damage, petrocrime and local opposition. Successive Nigerian governments have set targets to reinvigorate the oil industry, most recently in June this year when President Bola Ahmed Tinubu set a target of boosting oil production to three million b/d by 2030, while many in the sector believe even higher output is technically possible based on remaining national reserves of 37.28 billion barrels as of January 2025.
However, such ambitions are unlikely to be realised without the implementation of integrated solutions to the Niger Delta’s deep-seated underdevelopment, environmental problems, and organised criminal problems. Until then, the region’s local communities will bear the brunt of this deadly combination.
Dr Neil Alexander Ford has been a freelance consultant and journalist on African affairs for more than two decades. He covers a wide range of topics from international relations and organised crime to cross-border trade and renewable energy. Consultancy clients include international organisations, law firms and financial services companies, and he has acted as an expert witness in Africa-related legal cases. He has a PhD on East Africa’s international boundaries, ranging over the effect on regional economies; cross-border political disputes; and the impact of the boundaries on local communities, such as the Maasai.
