Of the Western companies, BP has a large presence in the country. However, Colombia is a dangerous place to work because of violence, a spate of kidnappings and bombings. Guerrilla groups have in the past targeted oil companies along with their employees.AlgeriaEmerging from years of civil war, Algeria’s economy is growing on the back of the oil industry. Kidnapping, violence, sabotage and vandalism are commonplace, fuelled by the revenues distributed by the oil companies.ColombiaThe South American country’s proven oil reserves are 1.84 billion barrels, but Colombia is abundant in unexplored oil regions.

This figure equalled the humanitarian aid pumped into the country over the same five-year period.The Extractive Industries Transparency Initiative, championed by Tony Blair, encourages oil and mining groups, and host governments to disclose their financial dealings However, it is voluntary – and not always welcomed overseas. A company typically makes two payments for extracting oil in a foreign country.The first is “rent” to the government for drilling for oil, and in this area vast sums often go missing from state coffers. Among the Western oil companies, Shell has the biggest presence. Through a joint venture with the Nigerian state-owned NNPC company, it controls around half the oil production in the African country However, Nigeria is gripped by unrest. But as companies’ reserves shrink, the temptation to tap relatively unexplored areas in North Africa and the Middle East, previously off limits, will be too strong to resist regardless of the ethical – and economic – risk.NEW FRONTIERS FOR THE BIG BOYS OF THE BLACK STUFFNigeriaThe world’s eighth-largest oil producer has untapped reserves of up to 35.2 billion barrels. A report published on Friday by Human Rights Watch revealed that an escalation of murder and violence in Nigeria last year was due to local armed gangs fighting over oil money.”The oil companies operating in the region, including Shell’s joint venture with the Nigerian government, should ensure the transparency of payments to local communities so that funds are not used to further violence,” the Human Rights Watch report said.Oil groups have always done business in undemocratic countries with poor human rights records That is often where the oil is. When BP and Shell complied in Angola, the government threatened to withdraw their concessions.The second payment made by oil companies is to local communities for exploration rights Again, these payments can cause serious conflicts.

Between 1997 and 2002, according to Human Rights Watch, some $4.2bn of oil money paid to the Angolan government vanished. She says CIS is currently preparing to demand that one oil group (she declined to name it) in which it is a shareholder pull out of a developing country over ethical concerns.Typically, investors do not sell up in protest if companies breach their ethical investment guidelines, but exert their influence as shareholders instead “Selling our holdings would be too easy,” she says. “They would be quite pleased to see the back of us.”According to The New Economy of Oil, a book written by John Mitchell, a former BP special adviser, some 40 per cent of the world’s oil production comes from countries where human rights, as defined by the United Nations, are either not recognised or they are violated In effect, oil firms often bankroll despotic governments. They prefer to do this than to overpay for more mature assets.”But the risks surrounding these kinds of investment are not just financial. Corporate governance and lobby groups are becoming more influential.