ChevronTexaco to Overhaul Aid Projects in Nigeria

ChevronTexaco Corp.’s Nigerian subsidiary said Tuesday that it would overhaul its aid projects in the country’s oil-rich south after finding that much of the tens of millions of dollars spent yearly was fueling violence or being wasted by corruption.

The San Ramon, Calif.-based company, the third-largest oil producer in OPEC member Nigeria, said its projects had stoked resentment in some communities, contributing to unrest that had cost the company more than $500 million.

ChevronTexaco’s statement followed a similar acknowledgment by Shell last year that the non-transparent way it was handing out aid was exacerbating conflict in the turbulent Niger Delta, where most of Nigeria’s 2.5 million barrels of oil a day is produced.

The company said local communities considered its aid projects, including the building of hospitals and amenities, “inadequate, expensive and divisive.” A system of targeting aid at “host communities” that own oil-rich land was creating rivalries and “inadvertently leading to or adding to the causes of conflicts among communities,” the company said.

Future aid, the company said, would do away with the concept of host communities. Instead, funds would be distributed through regional councils that ChevronTexaco would establish. These councils would help mediate conflict and ensure that any projects could eventually be taken over by the communities themselves, the company said.

There is a risk, however, that the changes will spark protests by host communities that could lose out as the corporate aid is spread more widely.

Echoing findings in a report commissioned by Shell and leaked to journalists last year, ChevronTexaco said young men were being paid salaries under its aid projects “for doing nothing at all, except that some are often found to be involved in threats, extortion and disruption of operations.”

ChevronTexaco spokesmen declined to say whether the company was in effect paying protection money to avert oil-platform occupations and kidnappings, which have become a regular feature of Nigeria’s oil business.

Increasingly powerful armed groups also steal tens of thousands of barrels of crude every day from Nigeria’s network of pipelines, at one point siphoning off about one-tenth of the country’s output.

ChevronTexaco has lost 140,000 barrels a day of crude output since an ethnic revolt broke out around the Niger Delta city of Warri two years ago, forcing it to abandon key facilities that were vandalized. During an initial attempt to restart production last spring, seven people, including two American oil workers, were killed when gunmen ambushed their boat.

In February, soldiers opened fire on protesting villagers who had overrun ChevronTexaco’s main Escravos export terminal, also near Warri, demanding that the company honor promises to provide jobs and housing. The demonstrators said the soldiers killed at least one person and injured several.

ChevronTexaco said that it made the promises under duress after an earlier occupation of the terminal by activists, and that it had to review the pledges after the ethnic violence.