updated 5/4/2005 2:50:52 PM ET 2005-05-04T18:50:52

ChevronTexaco’s Nigerian subsidiary said Tuesday it would overhaul its aid projects in the country’s oil-rich south after finding much of the tens of millions of dollars spent yearly was fueling violence and wasted by corruption.

The U.S. multinational, which is the third-largest oil producer in OPEC member Nigeria, said its projects have stoked communal jealousy, contributing to unrest that has cost the company over half a billion dollars.

ChevronTexaco Corp.’s statement follows a similar admission by Shell last year that the non-transparent way it was handing out aid was exacerbating conflict in the turbulent Niger delta, where most of Nigeria’s 2.5 million barrels of oil per day is produced.

ChevronTexaco said that local communities considered its aid projects — including the building of hospitals and amenities — “inadequate, expensive and divisive.”

The system of targeting aid at “host communities” who own oil-rich land was creating rivalries and “inadvertently leading to or adding to the causes of conflicts among communities,” the firm said.
Future aid, the company said, would do away with the concept of host communities, instead distributing funds through regional councils, which it plans to establish. These councils would help mediate conflict and ensure that any projects could eventually be taken over by the local communities themselves, ChevronTexaco said.

There is a risk, however, of the changes sparking protests by host communities who could lose out as the corporate aid is spread more widely.

Echoing findings in a report commissioned by Shell and leaked to journalists last year, ChevronTexaco said young men were being paid salaries under the projects “for doing nothing at all, except that some are often found to be involved in threats, extortion and disruption of operations.”

Spokesmen for the firm declined to comment on whether this meant the company was effectively paying protection money to avert oil-platform occupations by protesters and kidnappings, which have become a regular feature of Nigeria’s oil business.

Increasingly powerful armed groups also steal tens of thousands of barrels of crude every day from Nigeria’s network of pipelines, at one point siphoning off around a tenth of the country’s output.

ChevronTexaco has lost 140,000 barrels per day of crude output since an ethnic revolt broke out around the Niger delta city of Warri two years ago, forcing it to abandon key facilities that were vandalized. During an initial attempt by ChevronTexaco to restart production in April last year, seven people were killed — including two American oil workers — when gunmen ambushed their boat.

In February, soldiers opened fire on protesting villagers who had overrun ChevronTexaco’s main Escravos export terminal, also near Warri, demanding the company honor promises to provide jobs and housing. The demonstrators said the soldiers killed at least one and injured several.
ChevronTexaco argues that the promises were made under duress, after an earlier occupation of the terminal by women activists, and that it had to review the pledges after the March 2003 ethnic violence.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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