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. US Eyes Nigeria Oil Deals

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered the region's youth, who have taken up arms, some supplied by political leaders.
by Carmen J. Gentile
UPI Energy Correspondent
Washington (UPI) Aug 03, 2007
The U.S. Justice Department is reportedly investigating whether nearly a dozen companies operating in Nigeria made illegal payments to Nigerian customs agents for certain services. Eleven oil and oil-related firms have already been asked by the Justice Department's criminal fraud section to provide details about their relationship with the Swiss-based company Nigeria's Vanguard newspaper reported Wednesday.

The Justice Department is reportedly concerned about payments made by the companies to Panalpina for services such as unreported transport of oil and other items from Nigeria, a violation of the U.S. Foreign Corrupt Practices Act.

The companies being investigated were not named by the Justice Department.

The U.S. Securities and Exchange Commission is also looking into the allegations of impropriety on the part of the 11 firms. The Justice Department refused comment on the investigation directly.

"We have a policy of not commenting on investigations, and we wouldn't be able to name an individual/company suspected of violating the Foreign Corrupt Practices Act unless and until we actually brought charges against that individual/company," a Justice Department official told UPI Wednesday.

Of course, this isn't the first time that the department has scrutinized companies operating in Africa's largest oil- and gas-producing state.

In February, three subsidiaries of Houston-based oil-services company Vetco International Ltd. were forced to pay $26 million in fines for paying out a reported $2 million in bribes to Nigerian customs officials.

In a statement announcing the fines, the department said that "(t)his case ... confirms our commitment to root out corruption. The (Justice Department) will continue its efforts to assure a level playing field for businesses operating abroad."

Though known for its culture of corruption, particularly in the oil and gas sector, Nigeria is showing some signs of cracking down on the practice of taking and giving bribes.

Nigerian President Umaru Yar'Adua has made a concerted effort to address the issues of official and corporate corruption in the oil-rich Niger Delta.

Earlier this week the federal high court in Lagos ruled that a former governor of Bayelsa state, one of seven that make up the delta, must turn over all illegal assets. Six companies operating in the region (not named) were also implicated.

As a condition of his release, former Gov. Diepreye Alamieyeseigha reportedly agreed to help Yar'Adua combat militant violence in the delta.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered the region's youth, who have taken up arms, some supplied by political leaders.

Yar'Adua has appealed for calm following controversial elections in April that left many Nigerians accusing the government of voter fraud and intimidation. In his inaugural address, he said he would "set a worthy personal example" by tackling corruption and violence in the delta.

But corporate corruption and militant violence aren't the only problems the new Nigerian leader faces.

Refining of Nigeria's oil was hampered in July amid a nationwide strike. Though the work stoppage lasted only four days, the refining industry was hard hit as the process was already suffering due to continuing protests and attacks by militant groups.

The work stoppage was sparked when several unions called for a nationwide general strike after the government declared fuel prices would be increased. It was a decision that sparked outrage among Nigeria's 140 million people, 70 percent of whom subsist on less than $1 a day.

Despite being a major oil producer, Nigeria must import fuel for domestic consumption as many refineries have gone offline due to negligence fueled by government corruption, as well as militant attacks on oil installations.

Source: United Press International

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A Future Natural Gas Cartel
Doha, Qatar (UPI) Aug 02, 2007
The April 9 meeting in Doha, Qatar, of the Gas Exporting Countries Forum attracted intense media scrutiny. Pundits speculated that the hidden agenda of the meeting, the first in two years, was to explore the possibility of developing a natural gas cartel along the lines of the Organization of Petroleum Exporting Countries. Such a cartel would have immense financial and political clout in the global economy. Russian President Vladimir Putin first proposed the idea in 2002.

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