Nigeria—Chevron Nigeria Ltd. (CNL)

FIR , NGO

Justification for SCS
FIR: Chevron is one of the largest firms in the petroleum industry in Nigeria.
NGO: Chevron has contributed more than $270 million to the communities in the Niger Delta region. Activities include infrastructure, health, education, power, clean water, empowerment and economic development promotion.

Stakeholder size (number of people)
• The company directly employs more than 2000 people, 90 percent of whom are Nigerians, and indirectly provides jobs to an additional 5000 people. (The parent company employs more than 47,000 people worldwide.)

Area of Influence
a. Geographic area:
• “Chevron Nigeria Ltd. (CNL)… operates and holds a 40 percent interest in 14 concessions covering 2.5 million acres (10,253 sq.-km), predominantly in the onshore and near-offshore regions of the Niger Delta.”
• Chevron has “funding interests in 10 deepwater [offshore] blocks encompassing approximately 4.4 million acres (17,853 sq km),” and also owns a blending plant at Apapa, Lagos.
b. Population subsets: operates in Ilaje, Ijaw and Ogoni communities

Description of Organization
a. Who are the leaders?
• David J. O’Reilly, Chairman & CEO, Chevron
• Fred Nelson, Chairman and Managing Director of CNL
• Sola Omole, Spokesman (in 2003)
• James Neku, Security chief (in 2003)
b. How does one gain influence in the group? unknown
c. What issues do they care about?
• “Chevron’s long involvement in Africa’s most populous nation extends from exploration and production to delivery of world-class products in hundreds of service stations. The company also plays an active role in Nigeria as a member of the community.”
d. What does the organizational structure look like?
i. internal structure unclear
ii. Minority stakeholder: CNL operates under a joint-venture arrangement with the Nigerian National Petroleum Corporation, which owns a 60 percent interest.

Financial Resources (if applicable)
a. List activities that generate cash flow: exploration, extraction and refining oil (on average 300,000 barrels per day in Nigeria; 176,000 net barrels per day in 2006)
b. Income from activities: No data for CNL. Overall operating revenue for Chevron was $205 billion in 2006 and overall net income was $17 billion. International upstream (exploration and production) income was $8.8 billion and international downstream (refining, transportation and marketing) income was $2 billion.
c. Profitability: see above

Military Resources (if applicable) (n/a)
However, Chevron has been ordered to stand trial in the U.S. for allegedly hiring the Nigerian military to murder villagers in the Niger Delta. The lawsuit claims the “Nigerian Military and Police were paid by Chevron to shoot and torture protesters opposed to the company's activities in the troubled region. Chevron helicopters and boats were used by the security forces, resulting in torture and wrongful death.”
• Jola Ogungbeje and Aroleka Irwaninu were killed at the Parabe platform on May 28, 1998.
• In February 2005, soldiers from the Joint Task Force, an army-led unit, fired on protesters at the Chevron Escravos oil terminal on the Delta State coast killing one demonstrator.

Provide a short history of the stakeholder group
a. What is their origin?
Chevron has marketed petroleum products in Nigeria since 1913 (under the Texaco name). “In September 1963, American Overseas Petroleum Ltd. – which later became Texaco Overseas (Nigeria) Petroleum Co. – discovered oil at the Koluama Field offshore Nigeria. In that same year, CNL, drilling near the Escravos River, discovered the Okan Field.”
b. How have they changed?
i. Interests: Greater community involvement
CNL created a new development model in May 2006 when it signed global memoranda of understanding (GMoUs? ) with eight community groups in the Niger Delta as well as with state governments. The agreements are intended to gradually shift control over the design, planning and execution of community development programs from the company to communities through newly created regional development councils (RDCs). The GMoUs? are designed to improve relationships with these communities in areas of operation by promoting economic development and addressing employment issues. Together, the GMoUs? reach more than 400 individual communities, villages and chiefdoms, involving 600,000 community members.
ii. Level of influence:
• “CNL won the U.S. State Department’s 2003 Award for Corporate Excellence. The award was for being a good corporate citizen in Nigeria by, among other things, airlifting more than 2,000 community members to safety in March 2003, during inter-ethnic conflict in the Niger Delta area; setting up the Riverboat clinic [mentioned below]; and active involvement in the ongoing HIV/AIDS prevention efforts in Nigeria.”
• Scholarships: More than 6,700 Nigerian students are on CNL-sponsored scholarships in any given year, and Chevron normally awards more than 1,000 new scholarships every year.
iii. Resources:
• 14 major facilities.
• Chevron also owns and operates over 500 service stations in the country
• In 2001, Chevron began Riverboat Ambulance Services, a free floating clinic in the Niger Delta that sees about 800 patients per week.
c. What are their future goals?
• Construction began in 2006 on the $1.7 billion Escravos gas-to-liquids (GTL) plant, designed to produce 34,000 barrels of clean fuels per day and to process 300 million cubic feet of natural gas per day.
• Startup of the 421-mile (678-km) West African Gas Pipeline is began in 2007 and will transport Nigerian natural gas to customers in Ghana, Benin and Togo for industrial applications and power generation.
• Greater accountability
• Environment: The government of Nigeria wants all oil industries in the country to cease oil flaring by the end of 2008. The flares are health hazard to local communities and a waste of resources, but Chevron has said that it cannot stop gas flaring without shutting down production entirely. The industry has asked the government for an extension to 2010.
• Development aid: In 2005 Chevron admitted that its system of giving aid directly to communities was encouraging tensions and corruption. See 7) b) i) for its new system.
• Tax evasion: In August 2006 the Nigerian House of Representatives Committee on Petroleum Resources found Chevron guilty of tax evasion and ordered the company to pay $492 in tax liabilities.