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Last summer, skittish oil prices hit $78 a barrel, partly because of an attack on a Shell flow station. The high prices more than offset production losses caused by the growing instability, helping earn Shell and the other multinationals record profits in 2006. Meanwhile, more oil fields continue to open, many of them offshore where the infrastructure, though far more expensive than on land, is much safer from sabotage and theft. The deepwater fields are attracting aggressive new investors as well. China, India, and South Korea, all energy-hungry, have begun buying stakes in Nigeria's offshore blocks. "Most Western companies in Nigeria will find it difficult to compete, especially with China," Goldman says. That's because oil purchases by the Chinese come with their commitment to finance large infrastructure projects, such as rehabilitating a railroad line.

The largest new petroleum endeavor on the delta is taking shape along the Nun River, a tributary of the Niger. Operated by Shell, the Gbaran Integrated Oil and Gas Project, scheduled to begin producing in 2008, will encompass 15 new oil and gas fields, more than 200 miles (320 kilometers) of pipeline, and a sizable gas-gathering plant. New roads are already gashing the forest. Mounds of long black pipes await burial. Near a bank of the Nun, Nigerian soldiers crouch behind a ring of sandbags, a .60-caliber machine gun facing the road as they guard the entrance to the construction site of the gas plant. Cranes and bulldozers crawl over a cleared space large enough to fit two shopping malls. From the air, it must look as if a patch of skin has been removed from the face of the forest.

Activists with human rights groups are pressuring Shell to learn from past mistakes and treat this high-profile project, which affects 90 villages, as a chance to work better with communities. Michael Watts is advising NGOs on how to educate the local people about their rights. "For Shell to conduct business as usual would be a public relations disaster," Watts says. "Folks say, 'Look, these oil companies are making billions by taking out this black stuff from our territory—they should have some ethical and social responsibilities.'"

A cautionary tale unfolds at Oloibiri, where a wellhead, or "Christmas tree," stands in an overgrown plot. Nothing has flowed from it for years. A weathered sign states the facts: "Oloibiri Well No. 1. Drilled June, 1956. Depth: 12,000 feet (3,700 meters)." Nearby, a plaque dating from 2001 commemorates a presidential visit and the laying of a foundation stone for the Oloibiri Oil and Gas Research Institute, a projected government-funded museum and library. The stone is still there, but nothing else. A few local youths guard the site, not so much to protect it as to demand money from anyone who wants to snap a picture.

In the town of Oloibiri, whose population has dropped from 10,000 to fewer than 1,000 in the past 30 years, a dirt road passes between rough-hewn houses, some roofed with thatch, others with sheets of corroding metal. A small shop offers a few bananas and yams. Inside the only freshly painted structure, a lemon yellow, two-story house, Chief Osobere Inengite of the Ijaw tribe apologizes for the appearance of his town: "Oloibiri is supposed to be compared to Texas," he said. "I ask you, in Texas have the people in 50 years seen one second of darkness? But look here, we have no light, no water, no food, no jobs."

The chief looked prosperous. He was wearing an ornate black-and-purple robe, a chunky coral necklace, and a black derby, his outfit for a neighboring chief's coronation downriver in Nembe later that day. Like most chiefs, Inengite has a business—dredging sand from the river for roadbuilding. He always keeps an eye out for visitors to Nigeria's historic Well No. 1. He wants them to leave Oloibiri with a message for Shell, which owns the local oil fields. "Tell them to help us. Tell them to train 50 boys and girls from here for jobs," the chief pleaded. Then he sighed, "If we had never seen oil, we would have been better off."

Where does all the oil money go? That question is asked in every village, town, and city in the Niger Delta. The blame spreads, moving from the oil companies to a bigger, more elusive, target: the Nigerian government. Ever since it nationalized the oil industry in 1971, the government has controlled the energy purse. In a joint venture arrangement, the state, in the name of the Nigerian National Petroleum Corporation, owns 55 to 60 percent of multinational oil operations onshore. The windfall in revenues from this arrangement has grown in real dollars from 250 million a year to more than 60 billion in 2005. During that time, even though the government has evolved from a military dictatorship to a democracy (the latest attempt at civil governance began in 1999), what has not changed is what an International Crisis Group report calls a "cancer of corruption." A Western diplomat quoted in the report was even more direct, referring to "the institutionalized looting of national wealth." The money involved is staggering. The head of Nigeria's anticorruption agency estimated that in 2003, 70 percent of oil revenues, more than 14 billion dollars, was stolen or wasted.

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