Page 62 - Nigeriaone mag 2 edition en

Foreign exchange earnings from export have also been largely determined by crude oil exports. In 2002, oil export
contributed over 95 percent of total export earnings and in the decade after, oil export contribution to total export
earnings remained above 80%.

Gas flaring

Expectation of host communities in the oil rich Niger Delta region
The relationship between oil and gas host communities in Nigeria has historically been very poor, however
the oil and gas companies have been making considerable efforts to improve that relationship. The host
community expects to benefit from the activities of the oil and gas companies. Some of these expectations
include provision of direct social and economic benefits from petroleum exploitation to host communities,
and peaceful and harmonious coexistence between licensees or lessees and host communities.
An important concern for host communities is the continued degradation of their environment and habitat
from gas flaring associated with oil drilling. Nigeria has passed several laws to stop this with little effect. The
petroleum industry act penalizes companies for gas flaring, oil pollution, and stipulates that the revenues
from the penalties will be used for environmental remediation and relief of the impacted host communities.
However, the penalty must be steep enough to achieve its intended purpose. If it is not, oil companies will
continue to flare gas if doing so minimizes their cost more than the penalty adds to it.
Despite the massive earning from oil, Nigeria is ranked among the poorest and heavily indebted countries in
the world. Over 70% of its estimated 200 million people live on less than $2 US per day, due to corruption
and mismanagement of resources and revenue according to the corruption perception index (CPI). A large
number of host communities of crude oil deposits in Africa suffer from a lack of infrastructure. Fertile soils
and clean rivers are integral resources required by residents of local communities to ensure their economic
well being, which has been negatively impacted by crude oil processing, exploration, and transportation.
Most of the communities are deprived of a potable water supply due to oil spills emanating from crude oil
exploration.
The resulting influence of the oil spills into water bodies is a threat to aquatic life which then results in
aggravating hunger and poverty.

Special file 62