Private Empire: ExxonMobil and American Power

by Steve Coll

  Automatic gunfire and pistol shots jolted the men at Nancy’s. They heard shouts and cries at the ExxonMobil security gate. Eighteen young Nigerians burst into the bar. They wore head scarves and fired weapons in the air. They ordered African customers to lie down on the floor, and then they frog-marched the seven expatriates into the darkness. Two Nigerian security guards employed by ExxonMobil to protect the compound’s perimeter lay dying outside. “Run!” the kidnappers ordered. The prisoners jogged for about five minutes to a bridge, where two large speedboats stood ready. The armed boys loaded the foreigners aboard, and the engines roared. They weaved and raced for about eight hours until they reached remote Delta swamplands.1

  Within a day the kidnappers had issued their ransom demands to Sparrow Offshore and to the governor of Akwa Ibom State, a Christian politician named Victor Attah, who was a relatively effective governor by the Niger Delta region’s abysmal standards. The Delta suffered from what the writer Chinua Achebe called a culture of “political godfatherism.” The kidnappers demanded $10 million for the safe return of each of the four British ExxonMobil contract workers among the seven men abducted, or $40 million in total. The largest kidnapping in the corporation’s history was under way.

  John Paul Chaplin oversaw ExxonMobil’s operations in Nigeria. The corporation maintained offices in Abuja, the purpose-built capital in the center of the country, and Lagos, the commercial hub on the Atlantic coast, nearer the oil. Dozens of government affairs lobbyists, public relations specialists, security officers, and corporate intelligence collectors reported to Chaplin along with the usual array of engineers, lawyers, and labor supervisors. Especially during the first years of his tenure in the country, Chaplin had taken a somewhat optimistic view of Nigeria’s oil potential. “It’s like the Gulf of Mexico in the 1970s,” he told American diplomats privately. Nigeria’s gas reserves offshore could turn out to be the largest in the world, Chaplin thought. For all of its corruption and flaws, Nigeria’s government had a decent record, to date, of honoring contracts with the big oil corporations that fed the government so much revenue; the government favored Western corporations and resisted China. Nor had Nigeria’s rulers resorted to the sort of manipulated nationalism and populism roiling Venezuela. The centrality of Nigerian booked reserves and production to ExxonMobil’s corporate performance reflected the broader rise of West Africa as a critical oil supplier to the United States after 2000. Nigeria was on track to soon pass Venezuela as America’s fourth largest supplier of oil, after Canada, Mexico, and Saudi Arabia.2 The corporation produced about the same amount of oil in 2006 from Nigeria, Chad, Equatorial Guinea, and Angola as from the United States and Canada combined.

  All this provided ample reason, Chaplin thought, for ExxonMobil to try to continue to adapt to what was, admittedly, one of the world’s roughest political and social environments among major producers. The corporation operated in joint venture with the Nigerian National Petroleum Corporation, and the N.N.P.C. was a mess, riddled with corruption and unable to keep up with necessary investments. When the government was not stealing outright, it operated at a hopelessly slow and inefficient pace; bureaucratic approvals that might take six months elsewhere took twice as long in Nigeria. Civil and political unrest swept the country in waves. Even before the raid on Nancy’s, Chaplin had found it increasingly difficult to persuade expatriate technical workers to come to Nigeria; if the problem of attracting talent worsened, it might threaten production.3

  Unlike Royal Dutch Shell and Chevron, which ran many of their Nigerian oil wells onshore, in the midst of impoverished and politically disenfranchised Delta populations, most of ExxonMobil’s operations took place in ocean waters eleven to seventy-five miles offshore. The corporation’s onshore base in Akwa Ibom—a private airport and housing compound in Eket, and its nearby Qua Iboe Terminal on the Atlantic Ocean, where piped oil could be stored and loaded for transport—had not been greatly troubled during past phases of militancy and insurgency in the Niger Delta. Southern Nigeria’s most restive antigovernment ethnic groups, such as the Ijaws, had little local presence. These factors fed a tendency toward complacency about security threats in Nigeria back at headquarters, in Irving. But during the months leading up to the Eket kidnapping, it had become clear that ExxonMobil was coming under serious and unprecedented threat.

  The surge in Nigeria’s importance to global oil markets seemed to inspire into action the political and criminal gangs in the Delta’s oil-endowed swamps. Northern ethnic elites had long dominated politics and wealth hoarding in Nigeria; across decades, they had exploited the Delta’s oil and left its people in poverty. The particular wave of violence that washed up at the ExxonMobil compound in Eket was only the latest manifestation of this conflict. In 2005, Nigeria’s democratically elected president, the retired general Olusegun Obasanjo, sought to amend the constitution to extend his rule beyond two four-year terms. The power struggle that ensued among parliamentarians, Delta governors, and supporters of the president led to an upsurge of violence by armed gangs of thugs, students, and legitimately aggrieved insurgents—in Nigeria, it was never easy to separate criminals from political dissenters.

  Obasanjo established the Niger Delta Development Commission to invest in the neglected south and address the deprivation that fed crime and militancy. ExxonMobil contributed more than $100 million annually to the budget as part of its operating agreements. Yet the commission failed to deliver; Chaplin grew discouraged. He complained that ExxonMobil and other oil majors could not “continue to be the only entities that address communities’ needs because the companies simply are not equipped nor well suited to become quasi-governments.” Chaplin felt that “now is the time for Nigerians to hold their government accountable.”4

  The country’s incipient revolutionaries could be as nasty as the government kleptocrats they challenged, however. Delta gangs in early 2006 became newly audacious and ruthless. Kidnapping in the region had long been rampant, but in earlier eras, cases might be settled peaceably as kidnapper and victim sat together in a Port Harcourt bar, sipping beer and waiting for a final ransom to be determined—which they intended to divide between them. The region’s kidnapping markets were highly evolved. Expatriate workers were assessed by kidnapping gangs on a “potential-for-payment scale,” Royal Dutch Shell’s local executive explained to a visiting U.S. senator, “with hostages from the United States or Western Europe garnering the highest ransoms and Russian, Indian and Asians the least.” The oil majors tracked actual ransom settlements—Shell’s matrix showed that the most recent ransoms were running at about $120,000. By 2006, however, raids and abductions led regularly to murder. Shadowy groups issued political demands, not just requests for ransom, and they spoke of revolution. Insurgent and pirate gangs deployed speedboats and raided corporate platforms offshore that they had never reached before. Once-orderly ransom marketplaces yielded to price uncertainty. This devolution unfolded very quickly in late 2005 and early 2006. The United States, Britain, France, and the Netherlands formed a consultative group, the Delta Working Group, based in their embassies in the capital of Abuja and in their consulates in the economic capital of Lagos, to evaluate the emerging crisis. “The question was,” recalled John Campbell, then the United States ambassador to Nigeria, “have things fundamentally changed?”5

  Campbell, an experienced career foreign service officer, believed they had. Insurgent groups in the Delta were issuing statements for the first time that threatened to shut down the country’s oil industry. Their language increasingly attacked the Nigerian state and challenged its legitimacy to rule in the Delta. “If you put all this together, we are far beyond where we have been,” Campbell argued to colleagues that early winter of 2006.

  Nigerian military intelligence sources began to report specific threats against ExxonMobil in January. They said two groups, the Nigerian Ijaw Martyrs and the Ijaw Patriotic Front, had reportedly been handing out money to Akwa Ibom youths to join an attack on ExxonMobil’s Qua I
boe Terminal. Chaplin’s security team increased their alert status from Code Orange to Code Red, the highest possible level, at the targeted compound, but kept nearby Eket and other facilities at Orange. Threat upon threat followed.

  On March 9, a militia group styling itself the Martyrs Brigade, which said it was acting on behalf of the Movement for the Emancipation of the Niger Delta, or M.E.N.D., threatened to carry out “massive attacks” on ExxonMobil’s Nigerian affiliate unless the corporation paid new compensation to local communities, to make amends for a 1998 oil spill from one of its offshore pipelines. “ExxonMobil has continued to pay deaf ears [sic] to the pitiable plight of a now pained and severely exploited people,” the brigade said in a written statement. Along with “all other nationalist and freedom-fighting units in the Niger Delta, we hereby declare a 21-day grace period for ExxonMobil to honor its obligation to compensate every community that was affected by that catastrophic spillage.”6

  An ExxonMobil security officer joined the Delta Working Group on March 14 and reported that a militant known as Comrade Owei was behind the protests and threats. ExxonMobil had in fact paid between $25 million and $30 million in restitution for the 1998 spill, but the corporation had turned away demands for compensation from communities that it “does not believe were materially affected by the spill,” the officer said. The corporation felt that it was in a bind. It took the militant’s ultimatum “very seriously,” a second corporate official told the American embassy in Abuja, yet felt its options were limited. ExxonMobil depended primarily on a military command in the Delta, the Joint Task Force, and the notorious State Security Service for protection. Neither seemed prepared to confront the emerging threats. ExxonMobil reported that it had embarked on an advocacy campaign at all levels of Nigeria’s government, arguing that Nigeria “cannot afford to allow M.E.N.D. and other militant groups to creep into Akwa Ibom” and threaten ExxonMobil as they already threatened Shell and Chevron in neighboring states. “Were this to occur, the crisis would encompass virtually all of Nigeria’s oil producing coast.” Chaplin and some of his colleagues feared a step-by-step escalation that might lead Nigeria’s military-influenced government to unleash “a scorched earth policy, regardless of its impact on civilians,” which would only make a bad situation worse for the companies.7

  On April 29, a group of local youths, demanding entry-level jobs on offshore ExxonMobil platforms—cleaning, maintenance, and light construction jobs that typically went to foreign nationals recruited from India, the Philippines, or elsewhere—boarded speedboats and occupied a corporate barge twenty miles offshore. ExxonMobil’s Nigerian managers asked an Eket labor commissioner, Chief Samingo Etukakban, to help persuade the young men to leave.

  Etukakban was angry with ExxonMobil because in previous talks over jobs for Akwa Ibom youths, he felt that the corporation’s public affairs officers had lied to him. Nonetheless, “we relented and went out to the barge” by corporate speedboat, he recalled. ExxonMobil expatriates were present, Etukakban said, trying to end the sit-in. A Nigerian navy warship soon turned up; ExxonMobil had summoned the navy for assistance. Nigerian officers and sailors—determined to prove that they could defend the property of international oil corporations—boarded the barge on May 1 and arrested everyone, including the mediators invited out by ExxonMobil. “We were detained in very terrible conditions—two people to one handcuff, lying on a concrete floor,” Etukakban recalled. He spent twenty-three days in custody before a National Assembly member secured his release. The next day more youths with machetes forced their way into ExxonMobil’s Qua Iboe Terminal and briefly held two expatriates hostage. The men escaped. Nigerian security forces fired on the demonstrators, killing two of them. ExxonMobil had been “lucky to operate in the most peaceful area of the Delta,” said Chief Nduese Essien, the parliamentarian who freed Etukakban. But after the barge incident, by the summer of 2006, its local standing was deteriorating. ExxonMobil executives seemed unaware about how low its position had deteriorated among some local politicians and their youthful supporters. The corporation repeatedly displayed a “lack of interest” in local issues and welfare, Essien believed. “Everyone in the Delta is fidgety, and militants may be looking for a pretext to expand their swath,” the American consulate in Lagos reported. ExxonMobil is “talking with local leaders” and yet, “even if we keep the professional militants out, [ExxonMobil] will still have a difficult time working with the local youth to resolve this situation.”8

  The abductions from Nancy’s Bar signaled just how much had changed. ExxonMobil had been warned.

  The seven kidnapped ExxonMobil expatriate contract workers were threatened by their kidnappers but not beaten during their first ten days in captivity. They slept in a makeshift camp deep in the Delta’s palm-shrouded swamps, where muddy creeks and eddies snaked through thick, humid foliage. The kidnappers seemed to be heavy drug users and often preoccupied themselves by getting high. They fed their victims rice and water, but the men felt hot during the day, cold at night, and wet perpetually. They kept up their morale by talking about food and soccer. Their captors opened talks by cell phone with Sparrows’s chief executive and with Victor Attah, the Akwa Ibom governor, a full-faced man who espoused Christian principles, wore business suits, promoted grandiose shopping mall and golf course developments, and owned a luxury home in Lagos. Typically, governors were called in to mediate ransom agreements; it was presumed across the Delta that leading politicians and their security forces often took a piece of the action, although Attah himself had not presided over a kidnapping industry in Akwa Ibom.

  In Lagos, ExxonMobil security officers and counterparts from the affected contractor companies formed a crisis management cell and met daily. ExxonMobil retained Controlled Risk Group, one of the major kidnapping management and security firms operating in the Delta. The consultants advised that it was important to “have only one channel of communication between the kidnappers and the government.” Typically, kidnappers would use their victims’ cell phones to reach out to family members to negotiate, issue threats, and raise pressure on the employers. Controlled Risk contacted the families of the victims, passed along cell phone numbers that might be used in this way, and urged the family members not to answer. The Exxon crisis cell also urged Governor Attah to persuade the kidnappers to allow a delivery of humanitarian supplies to the hostages.

  The British Foreign Office took a leading role. Washington involved itself as well. After September 11, the State Department set up an enhanced interagency crisis response team that could rapidly deploy to help governments respond to hostage takings, particularly those involving Americans. By 2006 the team had drilled for just the sort of crisis that ExxonMobil now faced. But the idea that American and British intelligence and security officers might parachute into Nigeria to sort out hostage crises made the Nigerian government “uneasy,” as a State Department official involved put it. It did not thrill ExxonMobil, either. The corporation’s security officers were at times reluctant to share information about kidnappings-in-progress with the American government, fearing that sensitive details might be released under the Freedom of Information Act or otherwise leak to the media, compromising negotiations. “Unless serious injury is imminent, companies prefer to negotiate without Embassy intervention unless intervention could be discreet,” a cable to Washington from Abuja reported.

  Ransom negotiations reached an impasse and the kidnappers panicked. They beat the four Scotsmen with sticks and slapped them around with machetes. They handed them cell phones and ordered them to tell their corporate bosses that they were “in danger of being shot.”

  One morning, the kidnappers beat Graeme Buchan again and then handed him a cell phone. One of the youths threatened him with a loaded gun and instructed him to report, falsely, that his fellow captive, Paul Smith, a father of two, had died of malaria—and that the others were at risk of imminent death as well. “I’m afraid the gun at my head might have uncovered a talent for acting I didn’t know
I had,” Buchan said later.9

  The kidnappers called Governor Attah to report that Paul Smith had died. Attah was furious, he recalled; the death of a British kidnapping victim snatched from ExxonMobil’s fenced compound would devastate Akwa Ibom’s reputation for business and development. “I do not talk to criminals,” he snapped, as he recalled it. He hung up and ordered an aide to send a message to the kidnapper who had telephoned: “Tell him I hope he knows the cost of transporting a corpse from wherever it is back to the man’s home country, because the man will want the body brought back to be buried.” The governor hoped, he said later, that he might unnerve and rattle the kidnappers with this hard-line attitude.10