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

Abstract

June 2012 The Journal of American History 155 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 U.S. Oil Companies, the Nigerian Civil War, and the Origins of Opacity in the Nigerian Oil Industry