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U.S. Oil Companies, the Nigerian Civil War, and the Origins of Opacity in the Nigerian Oil Industry

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By Kairn A. Klieman

Present-day oil producers in Africa suffer from the “oil curse” or the “natural resource curse.” Despite massive influxes of oil revenues, these nations experience stagnating economies, declining standards of living, and increasingly authoritarian and corrupt forms of government. Nigeria provides a classic example. Ranked fifth globally in oil production, this nation has earned more than $340 billion in oil and gas revenues since the 1970s. Still, 70 percent of its population currently lives on less than one dollar per day, 43 percent have no access to clean water, and rebel insurgents in the oil-producing Niger delta threaten the stability of the Nigerian state. Corruption is rampant. In a recent study, the Nigerian National Petroleum Corporation received a ranking of zero for its level of transparency; the average ranking for the forty-four oil companies evaluated was sixty-five.1

International financial institutions and Western governments have advocated increased transparency to cure the oil curse—focusing on public disclosure of oil-related financial dealings to discourage the misappropriation of revenues and to hold governments accountable. The current emphasis on corruption as the cause of the natural resource curse represents the latest in a long history of economists’ and political scientists’ attempts to explain the phenomenon, labeled resource curse theory. Because those fields privilege the creation of universalist explanations, resource curse theory has become deterministic, failing to take into account specific historical eras, cultures, and locales. This article provides a corrective, utilizing historical methods to delineate the convergence of events, actors, and policies that set the Nigerian oil industry on its path toward becoming the most opaque on the globe today.2

The period of civil war in Nigeria (1967–1970) is often neglected in analyses of Nigerian oil, but during that time the structures, policies, and political relations that created Nigeria’s unique version of the oil curse were established. New evidence reveals that a tax battle waged by U.S. oil companies contributed to the regional and ethnic tensions leading to the outbreak of war. In the prewar oil boom period in Nigeria, U.S. independent oil companies undertook intensive lobbying and propaganda campaigns to convince Nigerians that newly imposed Libyan-style tax laws would force them out of business. In turn, they argued, the regions where they operated, as well as the ethnic groups inhabiting them, would be relegated to perpetual poverty. This campaign thus exacerbated ethnic tensions, falsely heightening the stakes over which the war was to be fought. Furthermore, key actors in the drama—the federal military government under Yakubu Gowon, the international oil companies and their home governments, and the secessionist leader Emeka Ojukwu—all concluded, for differing reasons, that oil matters were best kept out of the public sphere. As a result, the particular political economy of oil in Nigeria introduced opacity—the deliberate obfuscation of information related to oil production, revenues, accounting, and operations—as a governing principle.

Background: Nigeria’s First Republic and the Outbreak of Civil War

The roots of Nigeria’s civil war can be traced to colonial rule, when the British forced three very distinct peoples, each living in their own region—the predominantly Muslim Hausa-Fulani in the North, the Yoruba in the Southwest, and the Igbo in the Southeast—to integrate into a state that encouraged regional and ethnic competition. Interspersed between these three groups were ethnic minorities that lacked political rights. Recognizing the tensions inherent in the system, the British worked with Nigerian leaders to create a federal system that gave each region substantial autonomy over its own affairs. Although the Yoruba and the Igbo called for Nigerian independence early on, the northerners greatly feared southern domination in an independent state.3

To manage this tension, the British appointed the moderate northerner Abubakar Tafawa Balewa as the first prime minister in 1960. Nigeria achieved independence that same year and in 1963 became the Federal Republic of Nigeria. A fourth national region (the midwestern region) was created at that time to give resident minorities a larger political voice. None of those changes, however, quelled the problem of regionalism. Citizens living outside their home region faced discrimination and exclusion in the provision of public goods. The system established in 1963 ultimately fostered “an intense rivalry among the regions to outdo each other in socioeconomic development, maximize their share of the federation’s resources, and control federal power.”4

By 1964 the federal structure was failing. Ethnic minorities were revolting, rival political factions were fighting in the western region, regional governors were attempting to inflate population numbers in national censuses, and elections were both boycotted and rigged. Disillusioned with political chaos and corruption, a group of (primarily Igbo) army officers staged the January Coup (January 15, 1966), assassinating Balewa and key members of his government. A military government was installed under Gen. Johnson Aguiyi-Ironsi (also an Igbo) thereby ending Nigeria’s First Republic. Aguiyi-Ironsi quickly introduced a new constitution and attempted to create a unitary state.

Aguiyi-Ironsi’s move threatened northern military officers, who staged a countercoup six months later, on July 29, 1966, killing Aguiyi-Ironsi and replacing him with a northerner, Maj. Gen. Yakubu Gowon. Extreme violence in the North, in which thousands of Igbo civil servants and their families were massacred, preceded and followed the coup. As a result, Lt. Col. Emeka Ojukwu, who had been appointed governor of the eastern region under Aguiyi-Ironsi, called for all Igbos to return to their homeland. Refusing to recognize Gowon as legitimate head of state and calling for a loose confederation of states, Ojukwu began the nine-month standoff that led to the formal creation of Biafra (the secessionist state) on May 30, 1967. Thirty-five days later the first shots were fired, and the war between the federal government of Nigeria and the secessionist state of Biafra began.

The Oil Boom of 1964–1965

Standard histories of Nigeria attribute the nation’s first oil boom to the 1970s, when global oil prices skyrocketed. This is a mistaken assumption, for research indicates a substantial boom occurred between 1964 and 1965. Nigerian oil production began in 1956, when Royal Dutch Shell (as Shell D’Arcy) discovered oil at Oloibiri in the eastern region. By 1965 both Shell and Gulf Oil were producing—the former from onshore concessions in the East and the latter offshore in the midwestern region. Five other companies—Société Africaine des Pétroles (SAFRAP), Azienda Generale Italiana Petroli (AGIP), Philips Petroleum Company, Amoseas, and Mobil—had struck oil and were in the early stages of development, and Tenneco had obtained concessions but not found oil. In the eastern city of Port Harcourt more than twenty-five service companies had established offices, and a new refinery was opened in September 1965.5

The American embassy in Nigeria reported on the “boom atmosphere” of Port Harcourt, citing 1964 as “the benchmark for when Nigeria moved from a marginal producer to a major world oil producer of great promise for the future.” Crude output increased from 84,000 barrels per day in January 1964 to 301,352 barrels per day in August 1965, with an attendant increase in export revenues from £20 million to £60 million, ranking Nigeria the thirteenth-largest oil producer in the world.6

Nearly all of Nigeria’s oil was produced in the eastern region (83 percent by Royal Dutch Shell and 9.4 percent by SAFRAP). The allocation system in place at the time accorded 50 percent of the rents and royalties to the region of origin, 20 percent to the federal government, and 30 percent to a pool from which distributions were made to all regions in proportion to their population size. This system was acceptable when Nigeria’s main exports were agricultural products (which all regions produced) and tin and manganese (mined in the North), but with oil revenues accruing at such a rapid rate, northerners grew increasingly fearful of falling behind in receipt of distributions. Tensions also increased due to the rash of new oil discoveries in the Midwest. Gulf Oil had begun to produce there in 1965, and the boom environment attracted proposals for ancillary industries (liquefied petroleum gas, stock feed, and fertilizer plants). This provoked competition between the midwestern and eastern regions over where to locate these industries.7

In these earliest stages of the oil boom both the Nigerians and the independent oil companies carried with them business practices that embraced elements of the opaque. As G. Ugo Nwokeji has pointed out, the eastern oil-producing regions had been trading internationally for six centuries. Much of this history revolved around the Atlantic slave trade, which, like the oil industry, was extremely capital intensive. In such a system locals profited by taking on the role of a middleman to supply captives to the chartered companies that remained on the coast. Thus the “benefits of the slave trade accrued to the overseas slavers and their local counterparts in the same way that the rush of petrodollars … have flowed almost wholly to the political classes… . Both trades reflect the baroque, contested, and often unaccountable operation of the world of joint ventures and business alliances.”8 Given the deep history of these strategies, the middleman system was a standard way of doing business in Nigeria.

Likewise, the international oil industry operated through a system of national cartels designed to ensure price stability and create an advantage in regional markets. In Europe, cartels were often defended with questionable or aggressive tactics, some of which (suppressing data regarding estimated oil reserves, using press campaigns to influence public opinion and defame public figures, paying bribes) appear in Nigeria as well. These practices had become “ingrained in local industry’s customs and behavior patterns” and were “institutionalized as the normal way of doing business.”9 Thus opacity was a characteristic of both Nigerian and independent oil company (IOC) practices, shaping the way they interacted over time.

Investments in Opacity at the Outset of the Civil War

Although Nigerians grasped the implications of the oil boom, the U.S. embassy and U.S. oil companies strove to downplay its importance. Both felt that extravagant public comments should be avoided for “it would be unfortunate if over-optimistic predictions were to lead to unrealistic expectations on the part of Nigerian officials and public, and then be followed by disillusionment.” The Pearson Report, a 1966 U.S. Agency for International Development study commissioned to assess the impact of increased oil revenues in Nigeria, “discovered that the official Nigerian government statements concerning the anticipated Nigerian oil revenues were substantially lower than what the oil company officials knew could be forecasted, and that both these projections were lower than the figures estimated by the oil field operators.” The report acknowledged that this information would “have extremely explosive results if its contents were made known directly or indirectly to the government of Nigeria,” especially since it was issued during the period of Ojukwu’s standoff with Gowon.10 As a result, the report remained classified at the U.S. embassy.

According to Thomas J. Biersteker, the civil war taught the Nigerian government that “the multinational oil companies could not be trusted.” He attributes this to the oil companies’ “fence-sitting” during the war, as well as to their failure to disclose crucial production data. A highly placed Nigerian politician informed Biersteker that “state officials had to guess the contributions oil revenues would make to Nigeria’s exports and capital flows, as well as their implications for the Nigerian pricing system.” Accordingly, “there was high-level resentment of the role of oil companies at the outset of the conflict.” While there were undoubtedly political reasons for understating reserves and production estimates, these were also business strategies commonly employed by oil companies in their operations abroad. Keeping such information confidential prevented national governments from demanding higher production, which in turn helped the oil companies manage global supply.11

The high-level resentment also arose from the six-month battle that American oil companies waged against the Petroleum Profits Tax Ordinance of 1966–1967, which imposed Organization of Petroleum Exporting Countries (OPEC) terms before Nigeria officially joined the organization in 1971. All of Nigeria’s oil contracts included a “most-favored African nation” clause guaranteeing that if better terms were negotiated elsewhere on the continent, Nigeria would receive the same. In 1965 Libya adopted a tax scheme that required all companies to pay taxes and royalties on “posted” rather than realized prices. Posted prices were per-barrel figures agreed on by the oil companies and producers. They were often slightly higher than the realized price and were designed to protect producers from the price fluctuations of the global oil market. The Libyan tax scheme also required companies to treat royalties as expenses rather than as tax offsets, as had been the practice prior. This technical change could substantially increase revenues for the producers; in Nigeria the government would receive additional taxes equal to 50 percent of the value of royalties. In both countries the independents fought bitterly against the new tax law, arguing that they could not afford the increased costs. The majors, on the other hand, could afford it, and offered the new terms as a means of thwarting the competition.12

When a draft of the new set of laws was first circulated in May 1965, the U.S. embassy did not see the changes as a cause for concern. Since Nigeria was “a proven producer” there “would be no question that the liberal concessions which had been offered as a means of inducing oil companies to explore in Nigeria” would be “tightened up.” Indeed, this was seen as “the normal pattern wherever new oil fields are developed,” and Secretary of State Dean Rusk also supported this opinion. Two years later, however, the Central Intelligence Agency (CIA) was more cognizant of the domestic impact. Profits taxes were “assuming a rapidly increasing importance,” “were paid directly to the federal government,” and were a source of revenues “in which the regional governments do not share.” In 1966 the profits taxes were “expected to amount to nearly $30 million and jump to about $70 million in 1967.” Thus while the tax laws did not alter the original allocation system, they served as a substantial new source of revenues in which the oil-producing regions would not share. Neither the U.S. embassy nor the American oil companies seem to have been aware of the political implications of the new laws. Focused on business interests, the oil companies complained that Shell was trying to drive them out. The U.S. embassy, meanwhile, discovered that Shell had been negotiating the new law on a “super-secret” basis for more than a year, and that they had offered new terms in hopes of preempting the possibility that Nigeria might join OPEC.13

In late 1966 Gulf, Tenneco, Phillips, Amoseas, and SAFRAP began their campaign against the tax laws. Three weeks before the ordinance was to be voted on, J. P. Huie, general manager of Gulf, asked the U.S. embassy “to impress upon top GON [government of Nigeria] officials that the price change would discourage U.S. investment at this crucial stage in Nigerian development.” The companies also initiated their own contacts with Nigerian officials; an Amoseas representative reported that U.S. companies were “eyeball to eyeball” with the federal government and that local oil company managers were threatening to halt all investments if the new laws were passed. The embassy complained that the general managers of Gulf were “rushing about like bulls in [a] china shop making demands and tossing out threats which we feel will not only injure Gulf’s future position with GON but may very well be harmful to good relations other U.S. companies presently enjoy with GON.”14

The embassy was especially bothered by the fact that representatives from Phillips, Tenneco, and Gulf insisted on meeting with the highest-ranking government officials—including Gowon—rather than working through appropriate channels in the Nigerian Ministry of Mines and Power. This issue provides a specific example of two business cultures colliding: because the companies were new to the region, they could not discern that avoiding the middlemen (that is, the lesser political officials) was an affront to local practices. On the day before the decree was passed, the embassy noted that the oil companies were lining up “various other influential persons who have vested interests in the oil industry … to bring their influence to bear with high GON officials.”15

Although the tax decrees passed on December 30, 1966, the oil companies did not decrease their pressure. In January 1967 a series of articles appeared in Nigerian newspapers that fanned the flames of the tax dispute and escalated tensions around issues of regional power. One, entitled “Review that Tax Law Please: Oil Monopoly in Nigeria—A Question of Time,” was seemingly written by a Nigerian (under the pseudonym Ista Man) and asserted (mistakenly) that only the eastern region would benefit from the tax laws. The article painted a frightening picture of decline for the other regions, predicting that the laws “may lead to the closure of many oil wells, accelerate unemployment difficulties, create unrest in the Rivers and Mid-West areas … and may well lead to unfavorable balance of payments in the future. This will lead to an explosive discontent in these areas, hungering for equitable distribution of amenities.”16 The timing of this publicity campaign was extremely inopportune, appearing ten days after Ojukwu and Gowon had met at the Aburi Accord in Ghana (January 4–5, 1966) and Gowon had conceded to Ojukwu’s demand for greater autonomy of regional states. Gowon reneged on these agreements on January 25, thereby commencing the march toward war.

While the British opined that the articles “might well have emanated from the U.S. embassy,” the embassy reported they “were planted by U.S. oil companies, probably in all cases Tenneco,” and that they constituted “an unfortunate example of either poor reporting on the part of a newspaper that does not understand the issues or situation, or blatant disregard for objectivity on the part of the U.S. oil company or companies planting the story, or some combination of both.”17

Nigerian authorities were incensed by the campaign. Abdul-Aziz Attah, the permanent secretary to the Ministry of Finance, undertook a publicity campaign designed to expose the companies’ tactics. In articles published in the Nigerian Daily Times and Morning Post, he accused the companies of “trying to make use of regional authorities to put pressure on the Federal government,” and “spreading false statistics regarding the intentions of the government” in implementing the tax laws. As Attah saw it, the companies were “trying to sabotage profit tax” and introduce “an entirely new phase” in Nigeria’s political life. Although the details are not clear, U.S. documents indicate that the oil companies launched personal attacks on Attah. Because he refused to meet with them, the companies began petitioning regional authorities, reporting to the embassy that they would “now talk to anyone in Nigeria who will listen to their position.”18

The campaign ended when Gulf broke ranks and entered into negotiations with the government on February 20, 1967. The hostility that action provoked, however, had a lasting impact. In a July 1970 report on relations between oil companies and the Nigerian government, the embassy noted that despite the oil companies’ claims that the new tax would force them to abandon their ventures, “investment by both old and new companies has continued to flow.” “In retrospect,” wrote the ambassador, “outcry by the American companies must seem to have been nothing but a charade, with consequent damages to the companies’ credibility when they allege hardships at the hands of Government.” U.S. oil companies’ antitax campaign contributed to the regional and ethnic tensions that led to the outbreak of war. Opacity played a central role in their tactics, both through the dissemination of incorrect information (even if unintended) and the posturing employed in their threats to shut down production.19

While the embassy and oil companies embraced opacity for political and economic reasons, the secessionist leader Emeka Ojukwu relied on a similar strategy to manage his image abroad. Ojukwu was no ordinary military man; he was the Oxford University–educated son of one of Nigeria’s first millionaires. His father had been knighted by Queen Elizabeth of England and had also served on the board of directors of Royal Dutch Shell. One of Ojukwu’s most innovative and successful tactics was to hire public relations teams in the United States and the United Kingdom to promote the Biafran cause. CIA documents indicate that this strategy was designed “to avoid comparisons with Tshombe’s ill-fated bid for independence in the Congo.” Moise Tshombe, the secessionist leader of the 1960–1965 Congo crisis, had been maligned by Africans as a stooge for Western corporate interests. Because of the oil wealth in his region, Ojukwu avoided drawing international oil companies into the conflict or even mentioning oil in public, explaining that “It was never my intention to touch oil, the reason being that I have found it very difficult to get away from this Tshombe stigma.” Ojukwu, however, strategized around oil from the very start. One of his prewar tactics was to block the passage of petroleum to the northern region, and he held two meetings with the heads of the oil companies before secession took place. At the first meeting he assured them that they “should not fear” any loss of investments, but at the second he accused them of helping northerners stockpile oil in preparation for war. Despite this, oil companies were excluded when he promulgated the Revenue Collection Edict on March 31, 1967, calling for companies operating in the eastern region to pay their taxes there. Then, during the thirty-five days between formal secession and the firing of the first shots, Ojukwu sent lawyers to New York City to convince U.S. oil companies that once their production started, they would be legally justified in paying their revenues to the East. None of the companies, however, adopted this view.20

On June 21, Ojukwu finally demanded the payment of oil revenues—owed only by Shell and SAFRAP—to the East. While France decided to back the Biafran cause, Stanley Gray, the director of Shell, attempted to make a token payment of £250,000 as a means of stalling. The funds were to be deposited in a Swiss bank account, but the British government blocked this initiative by refusing exchange permission. During a tense moment of conversation, Ojukwu let slip one of his key motivations in pursuing war, which he saw as “solely to determine [the] recipient of oil revenues.”21

A Concordance of Interests at War’s End

The civil war ended in January 1970 with the federal side prevailing. It is estimated that three million people died, mostly due to starvation and disease. While a full account of oil-related events during and after the war is not possible here, a mention of a few basic occurrences is important. Because Shell’s and SAFRAP’s fields were located in the East, their production was essentially shut down; Shell’s output was reduced by 90 percent, and SAFRAPceased to operate.22

Meanwhile, Gulf’s offshore production in the Midwest increased by 300 percent. Because the federal government made it a priority to capture the shipping towns of Bonny and Port Harcourt early in the war (in July 1967), exploration and production outside Biafran-held territories continued. As the war neared its end, a new revenue-allocation system was adopted. It reduced the regional take to 45 percent of oil revenues and increased contributions to the distributed pool to 50 percent (as opposed to the prior 50 percent/35 percent divide). Importantly, in 1971 the federal government made a distinction between offshore and onshore oil rents. As a result, 100 percent of the offshore revenues that had previously accrued to regional states were now channeled directly to the federal government.23

Toward the end of the war, evidence suggests a deliberate obfuscation of oil-related matters by the Nigerian government. In some instances these actions appear to have derived from a political need to present Nigeria as a victor in battles against oil companies. In 1971, for example, when Shell again offered an increased posted price, the Nigerian press touted this a “colossal” and “phenomenal” achievement made possible by Nigeria’s “forward-looking policy.” The U.S. embassy, frustrated by this form of artifice, complained that such articles were “totally ignoring the fact that the government victory is largely attributable to earlier events occurring elsewhere in the world,” namely the actions of OPEC members in Libya and the Middle East.24

This type of opacity took on new dimensions in events surrounding Nigeria’s first formal round of bidding for offshore concessions in 1970, when the first clear evidence of the middleman system appears. An embassy telegram mentions ministers attempting to influence state decisions on behalf of their “favorites” (that is, oil companies) in the Federal Executive Council and also relays confidential information from a “regular and reliable oil source” who had, in turn, gained it from “a paid informant in government employ.”25

The Occidental Petroleum Corporation was the only American company awarded a concession, and its director, Armand Hammer, flew to Lagos to meet with Gowon and personally negotiate the deal. To the chagrin of other companies, Hammer agreed to a 51 percent Nigerian participation. He argued that this move was beneficial for the Nigerians since “getting experience in oil industry is only attainable through partnership basis in a high risk operation.” It appears, however, that Occidental also agreed to participate in the Nigerian government’s artifice, for the embassy reported that Occidental would release only a bare outline of the accord since the Nigerian government did not “want to highlight the fact that although it has 51 percent ownership of any production evolving from new concessions, Oxy is left with the major managerial responsibilities.”26

While this episode illustrates a specific moment of collusion in which the two entities agreed to embrace opacity, it also documents the origins of a deeper problem that remains central to the oil curse in Nigeria today: an inability or a lack of desire on the part of the Nigerian state to assume full operational control. Ricardo Soares de Oliveira identifies this as an Africa-specific problem; in contrast to other oil-producing states of the developing world, African producers never excluded international oil companies, and “no attempts were made to achieve control over prices or allocation of supply.”27

By the end of 1971 there is also evidence that the practice of underrreporting production and export data had become official state policy. In that year Nigeria issued its second national development plan, which included projected petroleum export values to 1974. The U.S. embassy, alarmed by projections that were “way below reasonable expectations,” feared the Nigerians were adopting a conservationist policy. Thus they queried Meshack Otokiti Feyide, “Nigeria’s top petroleum man since 1964” and director of the Division of Petroleum Resources. Feyide indicated that “oil production estimates appearing in Government publications would most likely be low, for when he received production estimates from companies, he normally multiplied them by a factor of less than one in order to have conservative projections and not raise expectations too much.” The embassy officer noted that companies did the same thing in submitting their estimates to the government; “thus projections which eventually get published have been twice discounted.”28 It is impossible to discern whether Feyide had adopted this strategy through interactions with oil companies or developed it on his own. It is clear, however, that in embracing opacity as a means of concealing oil matters from the public, the Nigerian government and international oil companies were, by 1971, on the same page.

Conclusion

This article has used historical methods to argue that problems of transparency in Nigeria have very complex origins. Going beyond the focus on African corruption to include the business strategies of international oil companies and political objectives of the U.S. government, it illustrates how actors with different agendas under unique historical conditions worked to enshroud Nigerian oil policy in opacity, often viewing that opacity as a stabilizing force. New evidence of the opaque techniques that U.S. independent oil companies used to challenge the major oil companies in the 1960s illustrates the ways they contributed to the origins of the oil curse. Tenneco’s misrepresentation of facts regarding the impact of new tax laws contributed to rising ethnic tensions that caused the outbreak of the Nigerian Civil War. Occidental’s complicity in the Nigerian government’s ruse to present itself as victorious in battles against foreign oil companies illustrates how opacity could be coproduced. Both examples point to the power of using historical methods to analyze the origins of the oil curse in Africa. Until scholars can clearly indentify the myriad ways opacity has operated in the international oil industry, effective solutions will be very difficult to find.

1.On the “oil curse,” see Macartan Humphries, Jeffery D. Sachs, and Joseph E. Stiglitz, eds., Escaping the Resource Curse (New York, 2007), xi; and Ian Gary and Terry Lynn Karl, Bottom of the Barrel: Africa’s Oil Boom and the Poor (Baltimore, 2003), 25–27. “Promoting Revenue Transparency: 2011 Report on Oil and Gas Companies,” Transparency International,http://www.transparency.org/news_room/in_focus/2011/prt_2011#7.
2.On the resource curse theory, see, for example, Hazem Beblawi and Giacomo Luciani, eds., The Rentier State, vol. II: Nation, State, and Integration in the Arab World (London, 1987); Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro-states (Berkeley, 1997); and Ricardo Soares de Oliveira, Oil and Politics in the Gulf of Guinea (New York, 2007).
3.For an overview of the ethnic tensions and the conflict in Nigeria, see Eghosa E. Osaghae, Crippled Giant: Nigeria since Independence (Bloomington, 1998); and Karl Maier, This House Has Fallen: Nigeria in Crisis (New York, 2000).
4 Osaghae, Crippled Giant, 7, 9.
5 On the Port Harcourt service companies, see Robert Brand to State Department, “Oil and Gas—Status Report on Exploration and Production,” July 2, 1965, Nigeria folder, box 1397, Economic: Petroleum, 1964–1966 file, General Records of the Department of State (National Archives, College Park, Md.).
6
Ibid.; Elbert Mathews to State Department, “Petroleum: Nigerian Crude Petroleum Report, Sept. 1965,” Dec. 18, 1965, Nigeria folder, box 1396, ibid.; Brand to State Department, July 2, 1965, Nigeria folder, box 1397, ibid.
7
Olsen to State Department, “Oil and Gas: Ministry of Mines and Power Monthly Petroleum Report for October 1966,” Jan. 26, 1967, Nigeria folder, box 1368, Economic: Petroleum, 1967–1969 file, ibid.; “Impact of Civil War on the Nigerian Economy,” June 1968, intelligence memo, folder 4, box 96, Nigeria file (Lyndon Baines Johnson Library and Museum, Austin, Tex.); V. E. Davies to Commonwealth Relations Office, “Oil Situation in Nigeria with Regard to Their Constitutional Difficulties,” March 14, 1967, folder 47, Oil Series FCO 54/47, Records of the Foreign and Commonwealth Office (National Archives, Kew, Eng.). Brand to State Department, “Oil and Gas.”
8
G. Ugo Nowkeji, Slave Ships to Oil Tankers, in Curse of the Black Gold: 50 Years of Oil in the Niger Delta, ed. Michael Watts and Ed Kashi (Brooklyn, 2010), 64–65.
9
John M. Blair, The Control of Oil  (New York, 1976), 71. For a detailed explanation of national cartels, see ibid., 63–70.
10
Brand to State Department, “Oil and Gas.” On the Pearson Report, see Joseph E. Thompson, American Policy and African Famine: The Nigeria-Biafra War, 1966–1970(New York, 1990), 27n21.
11
Thomas J. Biersteker, Multinationals, the State, and Control of the Nigerian Economy(Princeton, 1987), 72. For examples of the commonly employed business tactics in 1950s Iraq, see Blair, Control of Oil, 83–86. On oil reserves in general, see ibid., 15–22.
12
Scott Pearson, Petroleum and the Nigerian Economy (Stanford, 1970), 24–27; Anthony Sampson, The Seven Sisters: The Great Oil Companies and the World they Shaped(New York, 1975).
13
Brand to State Department, “Oil and Gas.” Dean Rusk to American Embassy, Lagos, “Revised Draft Petroleum Code,” n.d., Nigeria folder, box 1396, Economic: Petroleum, 1964–1966 file, General Records of the Department of State; “Eastern Nigeria on the Brink of Secession,” March 17, 1967, Central Intelligence Agency special report, folder 2, box 96, Nigeria file (Johnson Library); W. R. Tomkys to V. E. Davies, Feb. 28, 1966, IOD 2151/2 folder, Political Correspondence file, General Correspondence of the Foreign Office, 1906–1966 (National Archives, Kew). Thanks to Douglas Anthony for providing this document.
14
Olsen to State Department, Dec. 6, Dec. 9, Dec. 14, 1966, Nigeria folder, box 1397, Economic: Petroleum, 1964–1966 file, General Records of the Department of State.
15
Mathews to State Department, Dec. 29, 1966, Nigeria folder, box 1396, ibid.
16
[Ista Man], “Review That Tax Law Please: Oil Monopoly in Nigeria—A Question of Time,” West African Pilot (Lagos), Jan. 17, 1968.
17
M. Wasilewski, West African Economic Department to British High Commission, Lagos, “Oil situation in Nigeria with regard to their constitutional difficulties,” Jan. 17, 1967, folder 47, Oil Series FCO 54/47, Records of the Foreign and Commonwealth Office; Olsen to State Department, “Press Coverage and Reaction to Nigerian Petroleum Profits Tax Amendment,” Dec. 14, 1966, Nigeria folder, box 1368, Economic: Petroleum, 1967–1969 file, General Records of the State Department.
18
“Attah Talks of Oil Politics,” Daily Times (Lagos), Jan. 28, 1967, clipping, Nigeria folder, box 1368, Economic: Petroleum, 1967–1969 file, General Records of the Department of State; “4 Oil Companies Accused: ‘They are trying to sabotage profit tax,’” Morning Post (Lagos), clipping, ibid.; Elbert Mathews to State Department, “Finance Ministry PermSec Rejects Five Year Tax Moratorium Petition from U.S. Oil companies, Accuses Them of  ‘Oil Politics’ in Public Press Conference,” Feb. 3, 1967, ibid. In a report on a private conversation between Abdul-Aziz Attah and the American ambassador, Elbert Mathews, stated that “Attah obviously and unfortunately harbors deep resentment against oil companies for public campaign against decree and private attacks against him undertaken by few of these companies.” American Embassy, Lagos, to State Department, “GON [government of Nigeria] Clarifies Position on Tax and Oil Decree,” Feb. 2, 1967, ibid.
19
This hostility is made evident in subsequent events that cannot be chronicled here, including a seven-month battle between the companies and government when the companies were forced to incorporate in Nigeria and the antagonistic attitude the federal government took toward Mobil, hampering its start of production toward the war’s end. William Trueheart to State Department, “Oil Company–Government Relations in Nigeria,” July 27, 1970, Nigeria folder, box 1512, Economic: Petroleum, 1970–1973 file, General Records of the Department of State.
20
Osaghae, Crippled Giant, 64–65; Suzanne Cronje, The World and Nigeria: The Diplomatic History of the Biafran War, 1967–1970 (London, 1972), 20; American Embassy, Lagos, to State Department, “Ojukwu Meets Oil Company Reps,” Aug. 18, 1966, Nigeria folder, box 1397, Economic: Petroleum, 1964–1966 file, General Records of the Department of State. On the second meeting between Emeka Ojukwu and the heads of oil companies, see Olsen to State Department, Dec. 2, 1966, ibid. Morris Davis, “Negotiating about Biafran Oil,” Issue: A Journal of Opinion, 3 (Summer 1973), 23–32.
21
Parker to Commonwealth Office, “British Cabinet Conclusions on Nigerian Situation,” July 27, 1967, box 1175, Overseas Development Divisions and Successors T 317/1175, Records of HM Treasury (National Archives, Kew).
22
Soares de Oliveira, Oil and Politics in the Gulf of Guinea, 180.
23
S. Egite Oyovbaire, “The Politics of Revenue Allocation,” in Soldiers and Oil: The Political Transformation of Nigeria, ed. Keith Painter-Brick (London, 1978), 228–29.
24
Trueheart to State Department, “Petroleum—Foreign Scouting Service Reports,” Jan. 13, 1971, second Nigeria folder, box 1511, Economic: Petroleum, 1970–1973 file, General Records of the Department of State.
25
Trueheart to State Department, “Offshore Oil Concessions,” Jan. 15, 1971, fifth Nigeria folder, box 1512, ibid.
26
Edward Mulcahy to State Department, “Oxy’s New Concession,” Oct. 20, 1971, second Nigeria folder, ibid.; Mulcahy to State Department, “Occidental Oil Company Participation Agreement with FMG,” Oct. 20, 1971, ibid.
27
Soares de Oliveira, Oil and Politics in the Gulf of Guinea, 197.
28
Trueheart to State Department, “Nigerian Petroleum Policy,” Nov. 26, 1970, first Nigeria folder, box 1511, Economic: Petroleum, 1970–1973 file, General Records of the Department of State.
Credit|Oxford Academic


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