The Nigerian government’s 4 June 2008 decision to replace the Shell Petroleum Development Company (SPDC) as operator of oil concessions in Ogoni areas offers an opportunity for ending one of the longest-running conflicts between a multinational oil company and a local community in the Niger Delta. But to ensure that new friction does not develop between the Ogoni and Shell’s successor company, it must be followed by a comprehensive program of consultations with local populations to address the remaining issues involved in oil production in this area, including environmental protection and distribution of revenues.

The Shell-operated subsidiary, in which the company has a minority share, has been inactive in the area for fifteen years, while the federal government has tried to no avail to broker a truce between the oil giant and community leaders and representatives. Announcing the decision, President Umaru Yar’Adua said he
believed the Ogoni would now “calm down”. Both in Nigeria and the diaspora, the Ogoni at first celebrated the move as a victory for non-violent struggle and
local communities over a multinational oil company. They suggested the result might persuade other Delta communities to adopt less violent tactics in their campaigns for greater control of the region’s oil and gas resources. Subsequent developments, however, have dampened that optimism.

The federal government’s early indication that any new operator of the concession would have to be acceptable to the Ogoni raised hopes that local communities would be involved in its selection. But the government soon announced that the operating concession would be taken over by the Nigerian Petroleum
Development Company (NPDC), the upstream subsidiary of the state-owned Nigerian National Petroleum Corporation (NNPC). As Ogoni leaders sought clarification, industry analysts reported first that Addax
Petroleum of Canada would run the operation in the Ogoni oil fields, then that Gazprom, the giant Russian company, had signed a preliminary agreement to do so. It is not yet clear whether Gazprom will also get a management share in the venture, how it will relate to NPDC and whether additional companies may also have some role.

The Ogoni consider the government’s unilateral engagement of a new operator or operators a further attempt to deny their stakeholder rights. If it insists on proceeding without consultations on operations and local communities’ participation and benefits in the process, it will provoke hostility and almost certainly resistance. A working relationship between any new oil companies and the local people has to be defined. Indeed, com­munities across the Delta are increasingly insistent in their demands for agreements that grant them rights in the exploitation of oil and gas reserves on their land.

Additionally, very little has been done either to clean up environmental pollution resulting from over three decades of SPDC operations or to compensate the communities most adversely affected. Yar’Adua stated that agree­ments have been reached on compensation, but Ogoni leaders say the issue has not even been discussed. A clean-up initiative involving the United Nations Environment Programme (UNEP) has stalled.

Beyond SPDC’s withdrawal, the peaceful resumption of oil operations on Ogoni land requires a comprehensive approach for addressing these and other inter-related issues that have fuelled the Ogoni’s conflict with the company and the federal government. In particular, the federal government should:

• take the lead in negotiating a tripartite agreement with the new oil company or companies and the Ogoni representatives on the benchmarks that must be met before operations begin, to include details and modalities for reinvesting a portion of oil revenues in Ogoni land; concrete socio-economic measures to be implemented to revamp basic infrastructure and increase local training and employment; precise processes to control pollution levels and determine reparations/compensation for oil spills and other degradation; and clear commitments from community leaders on the security of oil company staff, installations and equipment;
   
• agree to a credible and effective program with UNEP and Ogoni leaders to clean up old spills and pay appropriate compensation to all communities adversely affected by pollution and other oil damages; and

consult on and implement urgently the required constitutional amendment and legislative reforms to guarantee more equitable allocation of state resources to benefit all communities in any given federal state, guarantee fair representation of minority groups in those states’ administration and increase those states’ democratic governance through the strengthening of checks and balances on the governor’s powers.

Dakar/Abuja/Brussels, 18 September 2008