Nigeria's first oil well is still source of woe

Oloibiri Well No. 1, drilled June 1956, 12,008 feet.

But this well, furred with rust, is at the center of an increasingly vitriolic feud between two villages over who owns the land beneath it. The conflict is fed by hopes that soaring prices will tempt big business to squeeze more oil from the well and give a pittance to the village that owns the land.

The tussle between Oloibiri and Otabagi brings into stark relief how villages that sit on the prodigious oil reserves in Nigeria, Africa's biggest producer of crude, have barely profited from the booming industry. Corrupt officials have hoarded the government's cut of profits, and energy firms have compensated locals with paltry payments worth a fraction of the hundreds of billions generated by drilling.

In both villages, children wander unclothed past heaps of burning trash. Oil spills have sullied the farmlands and spoiled the water. Fields once crammed with ears of corn, and nets full of flapping fish, have become distant memories.

"After destroying the area without anything to give in return, we have stepped maybe 50 times backwards. Pollution, both air and water," said Sunday Ikpesu, a sprightly 74-year-old Oloibiri chieftain. "We didn't know crude oil was such a bad thing."

Neither village would win a share of the actual revenues that might flow from Oil Well No. 1. The most they could expect from Royal Dutch Shell PLC, which owns the rights to the well, would be "community outreach" funds for building projects.

But in a nation where the government has regularly failed to provide citizens with health clinics, decent schools, pipe-borne water or electricity, the scraps that oil giants throw the locals' way are considered better than nothing--and subject to fierce competition.

Firms such as ExxonMobil Corp., Total SA and Chevron Corp. employ teams of community relations officers whose jobs include launching development projects worth tens of millions of dollars. No overall figures exist for these payments. But Shell, the country's largest operator, says operations it runs contributed more than $110 million in 2007.

Rights campaigners say oil firms are sowing discord among villages and exploiting their desperation.