• briefing asia infrastructure aug 15, 2006 • briefing asia energy aug 15, 2006

Finance, an oil industry analyst, a human rights activist, and our own correspondent. And we also hope to talk with you.
Do U.S. oil companies have a responsibility to improve the quality of life in countries in which they operate? Should the U.S. government play a more active role when the governments of oil-producing countries are ineffective? Or do you just have questions about life in the oil-rich Delta region?
Our number here in Washington is 800-989-8255. That's 800-989-TALK. Our email address is [e-mail].
Later in the program, flooding in New England: how one school is racing to save precious books and buildings from the water. But first, Nigeria and oil. We will be joined shortly by the Minister of Finance from Nigeria. And, eventually, NPR's own West Africa correspondent in Lagos, Nigeria.
But first, we are joined now by Ngozi Okonjo-Iweala.
I'm sorry if I'm mispronouncing your name.
But she is the finance minister for the Federal Republic of Nigeria. She is the first woman to hold that position. She's also a former vice president of the World Bank. She joined us by phone from the Sofitel Hotel in Ouagadougou, Burkina Faso, where she's attending an Africa Development bank meeting.
Welcome, Minister. Thank you so much for joining this program.
Ms. NGOZI OKONJO-IWEALA (Finance Minister, Nigeria): Thank you.
MARTIN: Minister, why are people siphoning off gas from these pipelines?
Ms. OKONJO-IWEALA: Well, I think the accident that occurred from the siphoning, is a very unfortunate tragedy for the country. But it is that, an accident. And, of course, you know, people say that they are siphoning gas because they are poor, and so on and so forth. We do have our problems in the country, but I don't think that that is any call for that type of behavior. We've tried, previously, to educate people, that this is not right thing to do, because it's so dangerous.
But I want to tell you that, you know, the other day they also showed people siphoning gas in California. They're siphoning gas from peoples' cars. You know, are you also going to say that, you know, that is because the U.S. is mismanaging its economy? Or California is being mismanaged? I think that it's a phenomenon when oil prices are high in most countries. And the people are trying to get around this. I don't think it's the right thing to do.
MARTIN: Are these individuals siphoning off gas? Or are they organized in some way?
Ms. OKONJO-IWEALA: No, they are not organized. This was an unfortunate thing, that the pipeline is one that is on the surface. And maybe that is something that should not have been done that way. Maybe it should have been buried, because it exposes it to this kind of tampering.
MARTIN: Do you feel that - you mentioned the analogy to, sort of, California. And you're saying that folks are doing this because they feel that - I assume that you're making that comparison because you're saying that, when people feel that they are not getting their just do, or they simply can't make it, according to the rules - the kind of established rules of order - that they kind of take matters into their own hands.
Do you feel that this is a widespread view in Nigeria, that somehow the average person simply cannot cope? And therefore, they have to go outside, you know, ordinary means, in order to function. Do you think that is a widespread feeling?
Ms. OKONJO-IWEALA: No. That is not a widespread feeling. And I don't think that the action of a few people, who it's - as I said, it's an unfortunate tragedy for us, and it shouldn't have happened. Should we spread to the behavior of Nigerians? 99.9 percent of Nigerians are hard working people - whether they are poor or relatively better off - and honest citizens, who do not go about tampering with things in the way that was done.
It is not a widespread feeling. Things are not easy in the country. But people are working hard to do that. And I'm just saying that this analogy in California, it was shown that people were also tampering to siphon off gas from cars. It is just not good behavior. It's not because, you know, people are poor, or they feel they can't make it, that they're doing that.
There are many poor people in the villages and rural areas. They don't go destroying things and doing illegal things, just because of, you know, the situation of things. You know, that is not the value, the kind of values we have in the country. And 99.9 percent of Nigerians do not behave that way, and do not support this.
MARTIN: You would agree though, wouldn't you, that I think Nigeria is still - that the average citizen still is not benefiting, as much as perhaps, as I'm sure you would like, from the oil wealth that is flowing into the country? Would you say that that's a fair statement, that they're still...
Ms. OKONJO-IWEALA: No, let me say this.
MARTIN: Uh-huh.
Ms. OKONJO-IWEALA: It is very true, that in the past, we mismanaged our resources. But for the past three years, the government has been implementing a very rigorous reform program that is showing results. We've been turning the economy around. We've been fighting corruption. President Olusegun Obasanjo focused on this issue of fighting corruption. An independent survey showed that in areas of public contracting, in the oil sectors, and so on, we're having results.
Please let me mention, that Nigeria is the first oil-producing country who joined the Extractive Industry Transparency Initiative. And has, on its own, gone beyond that to audit their accounts of the oil sector, the past four years. And has put the result on the website, www.neiti.org , for the whole world to see how we are running our oil sector: physically, what has been produced; financially, the flows that have come into the country; and the processes, how the oil sector is managed.
And we have found, of course, there are some weaknesses in the way that it is managed. But 98 percent of the resources have been accounted for. And the other two percent, we are looking into whether there are discrepancies between agencies that are reporting, or if it is something else. No other country has done this.
MARTIN: You have been...
Ms. OKONJO-IWEALA: Nigeria has turned over a new leaf. We are implementing this program. The economy grew at 6.3 percent last year. And, you know, we are looking to create more jobs. So we are diversifying away from oil into agriculture. In fact, the non-oil sector grew by eight percent. So if we continue this trend, that we intend to do, we will help to create more jobs for our own unemployed youth, and so on.
We admit we are a country is still poor, and needs to go a long way. But we are completely turned around the management of the country. And I think this needs to be recognized. You know, people continue harping on the fact that Nigeria corruption. We will not allow ourselves to be defined by this, because we’ve changed, and the world needs to recognize it.
In the Niger Delta, there's a genuine problem that has accumulated over the years, of people who did not receive the true dues in terms of socioeconomic programs, both from their past government and from oil companies. And now, this present government has truly recognized this, has put forward a program to massively focus on developing the place, socio-economically. We have...
MARTIN: Minister, let me ask you this...
Ms. OKONJO-IWEALA: ...everybody - sorry?
MARTIN: I just wanted to ask you this: What do you think the most significant problem is now? What do you think the greatest obstacle is now, to achieving a greater social equity in the recent… You say - you feel that you have made good headway against endemic corruption, that's what I've heard you to say over the last few minutes.
So, what do you think is the greatest obstacle now? Are there - is it that… Is it that local officials need to be more accountable; state officials need to better use the resources that are coming in? Or is there an attitude that, sort of the deck is so stacked that people don't yet believe that the reforms have been implemented? Is it they don't have confidence? What do you think the greatest obstacle is against the kind of improvements that you want to see?
Ms. OKONJO-IWEALA: No, the greatest obstacle that we face is - I don't think it's an obstacle, it's an opportunity. The greatest challenge we have is to sustain these reforms and make sure that - continue to push them down so that people begin to feel more and more of the benefit.
You have to remember that Nigeria was under military, non-democratic, rule for a long time and investments were not made in infrastructure, and other things that were needed to make the lives of the people better. Now we have been implementing this, rigorously, for the past three years. But we cannot solve two decades of poor management in three years. But we do want the world to recognize and give credit for what is being done...
MARTIN: What support...
Ms. OKONJO-IWEALA: We are gradually...
MARTIN: Mm hmm.
Ms. OKONJO-IWEALA: ...getting down to the communities. I think the - we need to work better with the communities, the states in the area. All arms of government need to work, hand in hand, with the communities. You must recognize one thing: investments in the Niger Delta are not - takes a lot of money and we have to devote those resources.
We are - for example, one of the major roads that people in the Delta have said they want. I'm from Delta state, one of the Delta states, so I can also speak to it. It is the East West Highway, which will cost $2 billion to build, because the soils in the area are very difficult to work with. We are focusing on building that. It will take a lot of resources.
And the idea that Nigeria is so rich because it's getting all this oil, let me just give you a few facts. In 2004, we made $25 billion, net. after you subtract what we need to reinvest back into the oil sector. For an entire country of 150 million people, this boils down to $0.50, per Nigerian, per day. Please remember, Nigeria is a very large country.
Last year, we made $45 billion, net. This is about a dollar, per person, per day. So the idea that, here is this country making vast amounts of money and not using it well, that was in the past. Now we are doing our best. We're accounting for - the resources are coming transparently(ph). And we are realizing that we have to focus much more on infrastructure, much more on education, much more on health.
We got debt relief, recently, from the Paris Club. So we exited - our $30 billion debt is gone. We are taking the resources that would have gone to service debt, to focus - to put into areas of education, maternal mortality, infant mortality, HIV/AIDS...
MARTIN: Minister, Minister, I'm so sorry to have to cut you off. You've been most generous with your time. Thank you so much for joining us.
Ms. OKONJO-IWEALA: Thank you.
MARTIN: Ngozi Okonjo-Iweala is the finance minister for the Federal Republic of Nigeria. She joined us by phone from the Sofitel Hotel in Ugudugu, Burkina Faso, where she's attending an African Development Bank meeting.
We're talking about Nigeria, how oil there, fuels politics and life, and why we need to care. And we're taking your calls at 800-989-TALK. You can send us e- mail, the address is [e-mail].
I'm Michel Martin. It's TALK OF THE NATION from NPR News.
(Soundbite of music)
MARTIN: This is TALK OF THE NATION. I'm Michel Martin, in Washington.
Nigeria is one of the U.S.'s top oil suppliers, but it can be a dangerous place to do business. Today, we're talking about Nigeria and oil: the politics, the economy, and how it affects Americans. You can read more about how oil money is changing Nigeria at the TALK OF THE NATION page at npr.org.
Our guests are NPR West Correspondent Ofeibia Quist-Arcton and Ngozi Okonjo- Iweala, the finance minister for the Republic of Nigeria, whom we just heard from.
Do you have questions about Nigeria, its oil production, about life in the oil- rich Delta region? Do U.S. oil companies have a responsibility to improve the quality of life in countries in which they operate? Give us a call at 800-989- TALK. Our e-mail address is [e-mail].
And we're joined now by Ofeibia Quist-Arcton. She joins us from the BBC Studio in Lagos. Welcome.
OFEIBIA QUIST-ARCTON reporting:
Thank you very much, indeed.
MARTIN: Ofeibia...
QUIST-ARCTON: Sorry to be late.
MARTIN: Well, we're happy to have you whenever you arrive. Were you able to hear our earlier discussion with the finance minister, any of it?
QUIST-ARCTON: I heard some of the interview with Ms. Okonjo-Iweala - not the whole thing, but the last five minutes - yes.
MARTIN: Well, I did want to - I do want to talk about the political developments this week, which is something we did not discuss with her. But before we do, I just wanted to ask you to react to her main points, which were that Nigeria has this reputation for corruption and that the current government is getting a handle on it. Do you believe that that is a point of view that is shared by most Nigerians - to the degree to which you can - feel you can accurately assess that?
QUIST-ARCTON: To a very small degree. I think people do say that the new government under President Obasanjo, since he came to power in 1999, has tackled corruption. But corruption, being endemic in Nigeria; institutional, at a petty level, at all levels of government.
Many Nigerians will tell you they haven't done enough, that what they have done has not even scraped the surface. And that right now, many Nigerians feel and analysts say, that the corruption campaign is being leveled against President Obasanjo's political opponents, rather than those who it should be trying to bring to book: those who are ripping the country off.
So yes, compared with military dictatorship - and Nigeria for most of its 46 years, since independence from Britain in 1960, has had a huge corruption problem. So, compared to the bad old days of the military regime, perhaps things have improved, but not as much as they should have under a democratic dispensation for the past seven years.
MARTIN: Ofeibia, back up for just one second, because many people, I think, would have the question, you know - why, if Nigeria is oil rich, are people still so poor that they will resort to siphoning off gas from oil pipelines? Now, you know, the minister suggested that these are just sort of isolated incidences of - I will use this word, she did not - of sort of hooliganism. People are just, you know, lawbreaking.
But it is my understanding, that many observers of the region feel that it is not just that. So the question, I think, we would have is: why, if the country is oil-rich, are people still poor?
QUIST-ARCTON: Michel, let me just point out that there are just two types of oil theft. There's the crude oil theft, and that's in commercial quantities. They call it bunkering, here in Nigeria. And that's when, literally, barge loads of crude oil are filled up and spirited away from Nigeria's waters. Now the government is accusing the militants - who are demanding more political and economic control of the Niger Delta region, the oil-producing area - they are blaming them, calling them rascals and thieves, blaming them for bunkering.
Now that is wholesale theft of crude oil. But in the explosion, the fuel pipe explosion on Friday, here in Lagos - and Lagos is, you know, hundreds of miles away, thousands of miles away from the Niger Delta, the oil-producing region - many people say these are ordinary Nigerians. And that it's not pillaging, it's poverty. It's because they're poor that they will risk their lives to punch holes into high-pressure, crude oil lines and fuel lines, to try and steal - if you want to put it that way - fuel and gas so that they can either sell it on the black market, and make money, or use it for cooking.
I mean, Nigeria is a country that produces oil, but has huge problems providing gas for its people to drive cars, and motorbikes, and other things. And they have huge fuel strikes. So there are enormous contradictions in this country, of the very, very wealthy - a very small minority - and the very, very poor. And many of those poor people live in the oil-producing areas, in the Delta.
So whether or not the government says the militants are in fact, thieves; stealing crude oil, a lot of Delta people sympathize with these militants. Because they feel that, by either taking foreign oil workers hostage - as they have in the past, kidnapping them - although releasing them safely; targeting foreign oil instillations and facilities, blowing them up, and so on; and cutting production of oil by a quarter, since the beginning of the year - there is some sympathy. Because they feel these boys, as they call them - the militants of the Niger Delta - have put their agenda on the international radar, because oil matters, because oil matters to the U.S., to Britain, to the European Union, to everybody. People are listening.
MARTIN: Would you just set the scene...
QUIST-ARCTON: On the other hand...
MARTIN: Just hold on a second, Ofeibia. Could you just help us picture this, for example, because I think some people here are having difficulty understanding how any one could pilfer gas from an industrial pipeline. I mean, the U.S. is an oil-producing country, or it has been, and I'm not sure that many people in this country have ever seen a pipeline.
So how is it possible that individuals can just walk up to a pipeline and siphon it off, however they manage to do it? Are they just lying about, visible? Are they just poorly defended...
QUIST-ARCTON: Oh yes.
MARTIN: ...help us see this.
QUIST-ARCTON: Oh yes. The net - I mean, there's a web of pipelines throughout Nigeria and much of it is above ground. Perhaps in the U.S., you'll have to tell me, these are underground pipes. But here, in Nigeria, many of the fuel pipelines, many of the crude oil pipelines, are above ground level.
When I went to investigate the blast, on Friday. I got here and went on Sunday, there was this charred pipeline. I mean, everybody could see it. It's just there, right in front of you. This was a tiny island, the beach was - the sand was completely blackened, charred.
There were still body parts and burns around. People literally drill holes into this pipe. And then, when everybody sees the ruptured pipe and the oil literally gushing out, they rush to them with their jerry(ph) cans - 10 liters, 10-gallon jerry cans - fill them up, and then will ride on dug-out canoes on the lagoons, and sometimes even on the open seas, to take the fuel that they have acquired, either to their villages or for sale. It's - I know it sounds pretty incredible, but that's precisely what happens.
MARTIN: And...
QUIST-ARCTON: And it's not the first time.
MARTIN: Ofeibia, there was significant political news this week. Will you bring us up to date, briefly, because we want to bring some callers into the conversation. But, what happened this week in the Nigerian Senate, and what's the significance?
QUIST-ARCTON: Of course, very briefly. President Obasanjo campaigners, for the past year or so, have been trying to get a constitutional amendment to the '99 Constitution, that would allow a third presidential term. At the moment, the constitutional - the constitution has a two-term limit. That comes up next year, in elections.
Now President Obasanjo has not himself said, whether or not, if the constitution had been changed, he would seek reelection next year. But his supporters have launched a determined and very vigorous campaign. There has been an equally vigorous campaign from the anti-third term campaigners, saying, this is bad for democracy. Two terms is enough, let someone else lead.
That campaign wad defeated in the senate this week, when the senate rejected the bill that would have allowed a constitutional amendment. So that briefly is it. But this is something that has dominated politics and dominated Nigerian life, for at least the past 12 months.
MARTIN: Let's go to Baltimore, Maryland, and Daytona(ph). Daytona, what's your question?
DAYTONA (Caller): Yes, hello.
MARTIN: Hello.
DAYTONA: Yes, hi.
MARTIN: Daytona, what's your question?
DAYTONA: Oh, okay, yeah. My question was for the Nigerian Finance Minister...
MARTIN: Well, she's no longer joining us, but Ofeibia perhaps, can answer this. So, please go ahead and see whether we can help you in some other way.
DAYTONA: Okay, well I was just going to ask, what is the consequence of - what are the consequences of the Obasanjo government not getting a third term, as far as economic policies are concerned?
MARTIN: Okay, Ofeibia. I'm sure Ofeibia can answer. Thank you, Daytona.
QUIST-ARCTON: I can tell you from the Nigerian point of view, depends who you speak to. Those who are President Obasanjo's supporters say, by killing this bill that might’ve allowed him to win a third term in office; it means that all his liberal economic reforms, I'm sure the ones the minister was talking about, may end. Because President Obasanjo's vice president, who seems to have joined the opposition, although they come from the same party, is one of those who's saying no to a third term.
Now, those who say they're - other people that (unintelligible) govern Nigeria, we can't have what we had in the past, people just going on ad infinitum, say we need fresh leadership. President Obasanjo may have done his best, but it's now time for someone else to govern Nigeria.
And it had gone on and on with the same person in another four years, when it comes up to election time, they will hear again that the government's economic reform program has not been completed and somebody in office, President Obasanjo or others, asking for now a fifth term. And that is a no-no for Nigeria.
MARTIN: Ofeibea, thank you so much for joining us.
QUIST-ARCTON: Pleasure.
MARTIN: Ofeibea Quist-Arcton, she joined us from the BBC Studio in Lagos. And now, to help us put Nigeria and its oil into international context, we're joined by Monica Enfield, a manager at PFC Energy; a consulting firm specializing in the international oil and gas industry. She joins us here in Studio 3A. Welcome.
Ms. MONICA ENFIELD (Manager, PFC Energy): Thank you.
MARTIN: Step back a minute. How much oil does Nigeria have? How does that compare to the other oil-producing countries that perhaps Americans might be more familiar with, like Saudi Arabia and Venezuela.
Ms. ENFIELD: Well, Nigeria is among one of the top five exporters of crude to the United States. It is the largest oil producer in Sub-Saharan in Africa. It produces nearly - over 2.5 million barrels a day for 2006; and that's a total of - Sub-Saharan total production is about 5.9 million barrels per day.
Nigeria is very important to the United States, because not only is it a very large producer but it also is a large exporter of crude to U.S. markets. And it's also very important because it's a new source of production coming from deep water fields in Nigeria satisfy global demand, not only in the United States and in Europe, but increasingly Asia,