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Viewing cable 08LAGOS500, NIGERIA: PIPELINE EXPERT SAYS 73 PERCENT OF NIGER

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Reference ID Created Released Classification Origin
08LAGOS500 2008-12-17 06:50 2011-08-25 00:00 UNCLASSIFIED Consulate Lagos
VZCZCXRO8118
RR RUEHMA RUEHPA
DE RUEHOS #0500/01 3520650
ZNR UUUUU ZZH
R 170650Z DEC 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 0367
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 0008
RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEWMFD/HQ USAFRICOM STUTTGART GE
UNCLAS SECTION 01 OF 02 LAGOS 000500 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY 
SIPDIS 
 
STATE FOR AF/W, INR/AA 
STATE PASS NSC FOR BOBBY PITTMAN 
 
E.O. 12958: N/A 
TAGS: PREL PGOV EPET SENV NI
SUBJECT: NIGERIA: PIPELINE EXPERT SAYS 73 PERCENT OF NIGER 
DELTA PIPELINES NEED REPLACEMENT, CAUSE SPILLS 
 
1. (SBU) Summary: The President of oil services company 
Nestoil, Ernest Azudialu, told PolOffs on November 17 that 
most oil spills in the Niger Delta occur because 73 percent 
of pipelines are corroded and need to be replaced; pipelines, 
which have a technical life of 15 years, have often been in 
use for thirty years. Replacing these pipes with new, 
concrete-encased pipes sunk three to four meters underground 
would eliminate most spills and make illegal bunkering more 
difficult. Decades of environmental degradation have robbed 
people of their traditional livelihoods of fishing and 
farming, and encouraged them to demand payments before 
allowing legitimate businesses like his own to operate in the 
Delta.  End Summary. 
 
Obsolete Pipelines Cause Spills Daily 
------------------------------------- 
 
2. (U) Ernest Azudialu, President of the oil services company 
Nestoil, which did roughly USD 34 million in business during 
2007 mostly as a subcontractor for international oil 
companies operating in Nigeria, told PolOffs on November 17 
that most oil spills in the Niger Delta are caused by breaks 
in obsolete pipelines. Azudialu, who has 13 years experience 
laying pipelines in the Niger Delta, estimated that 73 
percent of all pipelines there are more than a decade overdue 
for replacement. In many cases, pipelines with a technical 
life of 15 years are still in use thirty years after 
installation. Because the equipment is corroded and 
relatively close to the surface, making it more vulnerable to 
intentional and unintentional damage from natural and human 
causes, spills occur daily, and it often takes many hours to 
find the location of the spill and deploy the necessary 
clean-up equipment.  The best long-term solution to the 
environmental situation is to replace these old pipes with 
new, concrete-encased pipes that are placed three to four 
meters underground. Such pipes rarely have spills and are 
much more difficult to tap into illegally. Spills caused by 
illegal bunkering as well as technical failures could be 
greatly reduced by pipeline modernization, he said. 
 
Obsolete Pipelines More Vulnerable to Oil Theft 
--------------------------------------------- ------ 
 
3. (SBU) Azudialu said that illegal bunkering was widespread 
and also contributed significantly to what he called the 
environmental catastrophe in the Niger Delta. According to 
Azudialu, the term illegal bunkering is used to refer to wide 
range of activities from highly organized operations 
entailing barges, storage, pumping stations and small-scale 
refineries to villagers tapping into pipelines and helping 
themselves to oil for their own use or for sale on the local 
economy. While militant leaders are presumed to be active in 
the more organized illegal oil trade, Azudialu said, he 
personally knew about one military Joint Task Force (JTF) 
operation that was called off just before the militant leader 
was surrounded and taken or killed. Azudialu asked 
rhetrically: Who called the JTF off? Azudialu left no doubt 
that he believes senior officers in the JTF and officials in 
the state governments are involved in and profiting from 
illegal bunkering. 
 
Local Communities Ask Payoffs to Survive 
---------------------------------------- 
 
4. (SBU) Azudialu said that decades of environmental 
degradation have robbed the people of the Niger Delta of 
their traditional livelihoods of fishing and farming, and 
encouraged the residents to view the oil as belonging to 
them. As a result, they do not see anything wrong with either 
taking it directly (tapping into oil pipelines) or demanding 
payment from outsiders who are exploiting it.  Azudialu said 
that in order to work in the Niger Delta, a company must make 
payoffs to the local community leaders, pay protection money 
to the "youths," and also employ private security firms. All 
this makes work in the Niger Delta very expensive. Even if a 
company comes to a community to build something for the 
benefit of that community, said Azudialu, the community 
leaders and youths will first demand payments. 
 
LAGOS 00000500  002 OF 002 
 
 
 
5. (SBU) Asked about how development could be achieved in the 
Niger Delta under these circumstances, Azudialu said that the 
Federal Government had to grant contracts directly to 
credible companies rather than funneling money through the 
state and local governments.  He claimed that the Niger Delta 
Development Commission (NDDC) has not proven to be a promoter 
of development, calling it the worst conduit for that purpose. 
 
6. (U) Azudialu's assessment of the current state of 
pipelines has been confirmed by other of our interlocutors. 
 
7. (U) This cable has been cleared by Embassy Abuja. 
BLAIR