People scavenge on refuse near an oil facility in Nigeria.
People scavenge on refuse near an oil facility in Nigeria.
AP Photo / George Osodi

The Cost of Doing Business

Nearly everyone in the central Texas Hill Country of Itasca knew Ricky Wiginton. He always wore a smile. Wiginton also was a proud employee of the Houston-based oil-field services giant Baker Hughes.

But earlier this year, just days before the fiftysomething operations manager was headed back to his job in the western African nation of Nigeria, he let a foreign emotion slip through his good nature.

"He was scared this time," says his stepdaughter, whose family refused to let her name be published. "He was iffy about it."


Violence in Oil-Rich Nigeria

Yet "he wouldn't talk to us about it. He didn't want us to be scared."

In Nigeria, Wiginton lived and worked in Port Harcourt. A large city just off the Atlantic in southern Nigeria, it is home to dozens of big oil offices. By African standards, Port Harcourt is modern and westernized. Yet many consider it Nigeria's most dangerous city for foreign oil workers.

Early on the morning of May 10, as Wiginton was being chauffeured to work in a sedan, the car ahead of him hit the brakes. Then a motorcycle with two people on it pulled up to Wiginton's rear window. The back passenger drew a gun, pointed it through an open window, pulled the trigger and shot the American.

Wiginton's driver raced him to the Baker Hughes office. Getting there, he found Wiginton had died.

The Texan wasn't robbed. Just shot dead. Port Harcourt authorities are offering $40,000 for a tip leading to prosecution. Spokespersons from the Baker Hughes corporate office on Allen Parkway don't have much to say on the matter, citing minimal information flow from the FBI, U.S. State Department and Port Harcourt authorities.

At first, some close to Wiginton's case told Port Harcourt media his murder had a personal connection. Those familiar with big oil's strained relationship with Nigeria probably scoffed; the two most likely suspects were militants, and Wiginton's death was another attack against Nigeria's oil industry.

"The entire industry is keeping an eye on the situation," says Baker Hughes media liaison Gene Shiels. He adds later, "We don't talk about security issues."

Spokespersons from Halliburton and Shell Nigeria were similarly closemouthed.

Late last year, a new militant group declared war against Shell Nigeria, which produces half of the nation's oil exports. Within days, high-powered speedboats packed with black-masked men toting RPGs and AK-47s attacked Shell rigs, refineries and pipelines. They took hostages, including a western-based private-military soldier.

Calling itself MEND (Movement for the Emancipation of the Niger Delta), the group demanded $1.5 billion in reparations from Shell, claiming that some of the cash would go to clean up past environmental messes.

Shell officials say all abducted employees have been released; they also cited concerns about the environmental damage caused by the attacks. But they refuse to say whether they paid ransom, or to reveal the number of private-military forces they have in Nigeria.

The current Nigerian government, a newborn democracy after years of military rule, is trying to appease MEND with certain concessions. Such efforts, however, have been backhanded.

"We wish to restate our warnings to oil companies still operating in the Niger Delta, and more especially workers for such companies, to leave while they can," said a MEND spokesperson to Nigerian media this past summer. "At a time of our choosing we will resume attacks with greater devastation and no compassion on those who choose to disregard our warnings."

Nigeria is the king of African oil, and hundreds of Houston-based companies have a financial interest in the delta. It could be argued that it was Houston oil expertise that brought wells and pipelines there.

Every day, millions of barrels of crude are pumped out of Nigeria's lower midsection -- a maze of creeks and jungles called the Niger Delta. Much of it then flows south through pipelines to Port Harcourt, where it is refined and shipped out. Nigerian oil makes up nearly 12 percent of the United States' total yearly consumption. The CIA claims that figure could jump 20 to 25 percent in ten to 15 years.

But before the discovery of black gold, the delta was home to the native Ijaw, who number between 15 and 20 million. Many of them are considered some of the poorest people in the world. The Power and Interest News Report states that "while Nigeria has earned $300 U.S. billion in oil revenues over the last 25 years, per capita income remains below $1 U.S. per day."

What's more, the Ijaw still lack basic health care, schools, job opportunities and simple infrastructure, such as paved roads. The Ijaw also have little, if any, ownership in the oil industry that surrounds them. In essence, Nigerian oil is a joint venture between that nation's federal government and western-based big oil companies, many of which have offices in Houston.

It is this class imbalance that has led to the 40-year, small-scale war pitting Nigerian militants against big oil and the Nigerian government, which the militants say is corrupt on national, state and local levels. It is widely known that Nigerian government officials have squandered billions of oil dollars on themselves.

Yet one local expert of the Houston oil patch believes big oil should feel just as accountable when it comes to angry delta militants who want their fair cut.

"Any operator in Nigeria's delta or thinking about going there needs to be appreciative that these tribes went to war to share in oil profits in 1967," says Matthew Simmons, chief executive officer of Simmons & Co. International, a Houston-based investment bank. Simmons, a tough critic of the oil patch, is referring to the Biafra War, which ended after militants "called a truce on the promise that they would share in oil wealth."

"Almost 40 years later, they are far poorer, and they watched the Niger Delta turn into an environmental disaster. Now they want their oil back. I think they are serious, and ignoring their threats is unwise."

Being "far poorer" is a major factor in why this oil war escalates from time to time. Such as this year -- of all years -- when the oil industry is dealing with the likes of incredible demand, post-Katrina, Venezuelan President Hugo Chavez and, of course, an Iraqi insurgency.

But this time, something is different, say experts. The violence has a different edge. Car bombs, for example, have gone off in Port Harcourt. This is so alarming it has rattled the world's oil market to the core, helping push the cost of a barrel of oil to more than $70. By some estimates, Nigerian oil exports for 2006 have been cut by 20 percent.

Speculation about who's behind this new wave of violence is off and running. Some have suggested radical Muslims (60 million Nigerians are Muslim, the other 60 million are Christian). Earlier this year, militant spokespersons used the term "God willing" when making threats.

The most radical of rumors, however, include the Chinese. Some believe that China, desperate for energy, is secretly trying to force American oil companies out of Nigeria.

"Anything is possible in Nigeria," says Chris Albin, an investigator for the global organization Human Rights Watch. "[But] I'd be much more inclined to believe neither of those things."

Albin, who has traveled the delta and had long conversations with militants, says there are rational reasons behind this year's spike in aggression. Delta youths join the militant groups because outside of a few oil company jobs, there is nothing but farming and fishing for income, he says. "They're less willing to accept a subsistence income when they know billions of oil revenue is being pulled out from the ground beneath them."

Albin believes MEND is a mix of "old players." But he acknowledges they're "much more overtly political" and that taking hostages is a "radical departure" from past militant behavior.

What isn't a mystery is the global competition for energy resources. China is the world's second-largest energy consumer, and its growing thirst for oil undoubtedly pits it against the world's No. 1 consumer -- the United States -- says John Robb, who runs

Robb, who had an op-ed piece published in The New York Times about the emerging global trend of open-source, super-fragmented insurgencies, has floated this question: Is China supporting delta militants with weapons, training and intelligence?

"Securing oil rights is tough, power politics. It's pure Machiavellian," he says.

With that in mind, Robb says, consider the timing of China's $2.3 billion deal with Nigeria to purchase a 45 percent stake in an offshore oil field. It was China's first ever oil agreement with Nigeria. Days later, says Robb, MEND began attacking Shell institutions.

Michelle Medeiros, an American who works for the global environmental group Friends of the Earth, suggests MEND is what it is: a rebel group out to right a perceived wrong.

In 2005, Medeiros was working near Lagos, Nigeria's largest city, when she became aware of a farmer who had handed over his land for $300 to an "oil consortium" so a pipeline could run through it. The consortium was composed of international banks, government agencies and oil companies, notably Shell, the farmer told her.

"They're not being informed of their rights," says Medeiros. "They don't understand that they don't have to give up their land for so little."

As with the militants, much of what the oil and gas business does outside the United States, especially in far-flung lands with weak democracies, is shrouded in secrecy.

Besides a call for jobs, money and hospitals, it's no wonder delta militants have been demanding for years that big oil become more "transparent" when it comes to business.

This lack of disclosure has cost many Nigerians their lives, and may have helped take the life of Ricky Wiginton, a Texan who took the gut-check for the oil patch by going overseas where Americans are increasingly becoming easy targets.

Wiginton, who was laid to rest in Itasca, took that risk, in large part to support his wife and stepdaughter.

"He was never rude to anybody," says his stepdaughter. "He always made everybody feel at home."


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