Sorrows still spring from Nigeria's first oil well

OIL WELL NO. 1, Nigeria — Three decades after pumping its last drop, the first oil well in Nigeria is marked by a decrepit signboard bearing what would seem an uncontroversial statement: Oloibiri Well No. 1, drilled June 1956, 12,008 feet.

But this well, furred with rust, is at the center of an increasingly vitriolic feud between two villages over who owns the land beneath it. The conflict is fed by hopes that soaring prices will tempt big business to squeeze more oil from the well and give a pittance to the village that owns the land.

The tussle between Oloibiri and Otabagi brings into stark relief how villages that sit on the prodigious oil reserves in Nigeria, Africa's biggest producer of crude, have barely profited from the booming industry. Corrupt officials have hoarded the government's cut of profits, and energy firms have compensated locals with paltry payments worth a fraction of the hundreds of billions generated by drilling.

In both villages, children wander unclothed past heaps of burning trash. Oil spills have sullied the farmlands and spoiled the water. Fields once crammed with ears of corn, and nets full of flapping fish, have become distant memories.

"After destroying the area without anything to give in return, we have stepped maybe 50 times backward. Pollution, both air and water," said Sunday Ikpesu, a sprightly 74-year-old Oloibiri chieftain. "We didn't know crude oil was such a bad thing."

Neither village would win a share of the actual revenues that might flow from Oil Well No. 1. The most they could expect from Royal Dutch Shell, which owns the rights to the well, would be "community outreach" funds for building projects.

But in a nation where the government has regularly failed to provide citizens with health clinics, decent schools, pipe-borne water or electricity, the scraps that oil giants throw the locals' way are considered better than nothing — and subject to fierce competition.

Firms such as ExxonMobil, Total and Chevron employ teams of community-relations officers whose jobs include launching development projects worth tens of millions of dollars. No overall figures exist for these payments. But Shell, the country's largest operator, says operations it runs contributed more than $110 million in 2007.

Rights campaigners say oil firms are sowing discord among villages and exploiting their desperation.

"The oil industry does not take time to find ways ... to support a consensus-building process under which all communities come together and agree," said Dimieari Von Kemedi, a local activist. The benefits they give are "laughable ... compared to the amount of money that comes out of these oil wells."

Shell didn't comment on the village conflict and doesn't publicly announce its operating plans. Oil-industry workers vigorously defend the community payments, calling them charitable donations to needy people.

They also argue that oil companies can't take over the long-term responsibilities of the Nigerian government, which claims the majority of the proceeds stemming from the oil industry.

Critics acknowledge the oil firms have no legal obligation to provide services to Nigeria's people. But they say the outreach efforts ignore the realities of the people they're purportedly trying to help.

Schools are built, but no teachers are hired. Health-care facilities have no long-term access to medicines. So-called "security" teams, hired to protect oil installations, are little more than youths bribed not to vandalize the gear, the activists say.

Perhaps most damaging has been the tendency to dole out benefits to the inhabitants closest to sensitive oil machinery, which has undermined community-leadership schemes and pitted people and communities against one another for the payments. Dozens of violent flare-ups can be attributed to conflict over oil-company payments in recent years.

The feud over Nigeria's first oil well is a typical illustration.

Already, scuffles and heated arguments have been reported near the well, an omen of worse violence to come. Villagers say they don't feel welcome among their neighbors, even though they share farmlands and river waters used for drinking and cleaning.

The villagers of Oloibiri and Otabagi have little money to launch a court battle. Any successful outcome would likely be through mediation by a headman of the traditional Ogbia kingdom, of which both towns are part, said Kemedi.

European oil explorers first arrived in southern Nigeria in the early 1930s, when Nigeria was a British colony.

Traditional land-transfer practices differed from Western-style sales, from one sovereign party to another. Written records were hardly ever kept, with leaders passing down history and community boundaries through an oral tradition.

By the 1950s, Oloibiri boasted a postal exchange and an Anglican church run by English missionaries. It was the seat of operations for the exploration team of what would later become Royal Dutch Shell.

The explorers found what they were looking for in the 1950s, and sometime during that period, the Oloibiri villagers say, they signed a contract with Shell employees giving them access to the area around what would become Well No. 1. They say this proves that the people of Oloibiri are the rightful owners. But no copies of the pact appear to exist.

In 1958, the first oil began to flow. Villagers here live only into their 40s on average, but the few from that time who are still around remember a huge party. The Shell team brought out long tables, they remember, and more European-style beer than anyone had ever seen.

"They made a heavy party that day," recalls 60-year old Edwin Ofonih of Oloibiri village. "Everyone drank until nonsense."

A half-century later, the villagers live in poverty while oil giants have carted off the riches from beneath their feet and government officials head overseas for health care and recreation.