Chevron foundation, USAID give Nigeria $50M

Wednesday, February 23, 2011

LAGOS, Nigeria (AP) – Chevron Corp.’s foundation and USAID are to pour $50 million into Nigeria’s impoverished delta where militants have kidnapped foreign oil workers and demanded that more oil profits come back to the region, the U.S. oil giant said Thursday.

Chevron’s Niger Delta Partnership Initiative and the U.S.-government funded USAID will each invest $25 million toward the development of the region over the next four years.

The money will support programs designed to promote economic development, improve government and local organizations, and help reduce conflict in the volatile area.

“This is an investment in developing stronger communities and the future of our business,” said Rhonda Zygocki, Chevron’s vice president of Policy, Government and Public Affairs.

Chevron’s move in Nigeria comes after a judge in Ecuador ordered the oil company on Monday to pay $9.5 billion in damages and cleanup costs after ruling that Chevron was responsible for oil drilling contamination in a wide swath of Ecuador’s northern jungle. Chevron plans to appeal that decision.

In Nigeria, the delta remains poor despite five decades of oil flowing its soil. Chevron’s Nigerian subsidiary, Chevron Nigeria Ltd., started pumping crude oil from the delta soon after oil was first struck in the region, but in recent years, they have focused on natural gas projects.

Nigeria, an OPEC-member, generates most of its national wealth from exporting the delta’s crude oil but militant groups have said that little of that wealth comes back to the region of winding creeks and mangroves.

To get the government’s attention, fractionalized militant groups have waged a low-level insurgency since 2006. They have routinely kidnapped oil workers and bombed pipelines, demanding for more oil money to come to an area still gripped by abject poverty and pollution after more than 50 years of oil production.

Nebulous ties exist, however, between militants, criminal gangs operating in the area and wealthy politicians who benefit from oil revenue in the region.

Violence in the delta has affected global oil prices in the past, as Nigeria remains an important source of easily refined crude oil for the U.S.

The Nigerian government sponsored an amnesty program in 2009, which offered cash payouts to militants to lay down their weapons, as well as the promise of job training. But the amnesty deal began to fall apart last year as the region’s main militant group, the Movement for the Emancipation of the Niger Delta, began a new wave of kidnappings and attacks. Other militants upset by being cut out of the amnesty program have formed new militia groups.

Source: Associated Press (link opens in a new window)