Nigeria: Crime Pays Enough To Shut Down Oil Industry

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June 4, 2007: The kidnapping of foreign oil workers has increased in the last month, despite police and military efforts to stop it. Nearly 150 have been taken so far this year, yielding at least $100,000 per captive in ransom. No one ever says anything, on the record, about ransoms. However, the money is simply too good, and has attracted some well run criminal organizations. The oil companies and kidnapping gangs have got it all organized, with negotiators showing up at the oil company headquarters, within hours of a kidnapping, proof-of-life in hand, along with ransom demands. Negotiations now usually take days, instead of weeks. The flow of ransom money has attracted more kidnappers, and attacks on foreigners working at non-oil industry firms. Six Russians were recently seized from a smelter, and all foreigners are getting nervous. Even the heavily guarded residential compounds will not keep the gangs out. In a recent incident, the kidnappers simply shot their way into a compound, killing two policemen, and driving the rest away. Women and children are now being taken as well. While the oil companies are trying to treat the ransoms, "danger pay" and additional security, as a cost-of-doing-business in Nigeria, it is reaching a point where is simply is not worth the extra effort. Nigeria is in danger of seeing its primary source of income (mainly for corrupt politicians), shut down by the cost of dealing with criminal activity.

May 30, 2007: In the Delta oil region, two of the major criminal gangs got into a gun battle over how much they should be paid for fixing recent elections for various candidates. These payments are still a major source of income for the gangs. After several hours of shooting, at least fifteen people were dead.

May 27, 2007: The recent elections put a Theodore Orji , held in jail on corruption charges, into office as the governor of Abia State, in the southeast. He was illegally released on bail to be sworn in, and thus became immune from prosecution. However, this was done before the official date for assuming power, and is not considered legal. The reason for this maneuver was that the guy he was replacing was also being investigated for corruption, and wanted to flee the country quickly after he was out of office (and no longer immune from prosecution). Just about everything is for sale in Nigeria.

May 26, 2007: Oil workers in state owned organizations, got a 15 percent pay raise, after ending a two day strike.

May 24, 2007: Government attempts to privatize refineries are causing unrest. The state owned refineries are run by corrupt, and incompetent, government appointed managers. They are overstaffed, often by employees who only show up to collect their pay, or protest a change of ownership. Despite all the oil produced, refined products tend to be exported, rather than supplying local needs. This creates lots of gasoline shortages for Nigerian motorists, who are fed up with it.

 

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