Oil for Terror

Shell Uses Nigerian Companies Linked to Rebels
By Dino Mahtani and Daniel Balint-Kurti
FT.com
April 26, 2006

Royal Dutch Shell admitted that it subcontracted work to companies run by Nigerian militant activists involved in a violent insurrection in 2003 that shut down 40 percent of the country’s oil output.

The militant activists are linked to the Movement for the Emancipation of the Niger Delta (Mend), a rebel group that attacked Shell oil facilities this year, closing down more than a fifth of the output of the world’s eighth largest exporter.

Subcontracting work to local militant groups is one method oil companies have used to “buy-off” militants and avoid attacks on their oil facilities. Contracts are worth an estimated $100,000 per year.

Shell used two companies, Shad-Ro Services and Integrate Production System Surveillance (IPSS), for waste disposal and pipeline security work. These companies have strong political ties to the Federated Niger Delta Ijaw Communities (FNDIC), a militant group that heavily targeted Chevron in 2003.

The Ijaw is the majority tribe in Nigeria’s oil producing Delta region. Many Ijaw leaders say their people have been cheated out of their oil wealth by the government and oil companies while they live in poverty among oil slicks and gas flares. FNDIC have been maintaining pressure on the government to give the Ijaw more political power and access to a greater share of the country’s oil revenue.