At the root of it all are the weak institutions, governance and democracy that prevail in developing countries. Instead of being strengthened through years of sustained economic planning and development, these structures are suddenly subverted by huge sums of money.

Oil money is easy money, says Professor Alex Kemp, an economist at Aberdeen University. "Getting revenues is simple - you bring in foreign companies to extract the stuff, get a down payment from them and levy taxes on them.

"It's less of an effort than developing high-production agriculture or manufacturing."

Dutch Disease

The shock impact of oil on an economy is responsible for what's known as Dutch Disease - relating to when the Netherlands' economy crashed in the 1960s after it discovered offshore gas.

In oil-rich Nigeria, 66% live on less than $1 a day

In this scenario, wages and prices inflate and the oil-producing country's currency quickly strengthens, but this suddenly makes it hard for domestic producers to compete with imports.

"Wealth finds its way into other sectors of the economy, as people earning money from oil have more to spend on goods that aren't usually traded across borders," says the report.

"These sectors start to benefit, but they also drag workers away from mainstream manufacturing, further damaging the manufacturing base of the economy, frustrating the expansion and 'deepening' of the economy."

The result is that a country quickly becomes dependent on its oil.

Things then tend to get messy. With poorly accountable institutions, a lot of oil money tends to disappear into a select few back pockets.

Rush for business

Frequently, this is done with the connivance of western oil companies who are climbing over each other to get a stake in the potential riches, says the charity.

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None of this is a surprise to anyone in the business. After all, says Manouchehr Takin, of the Centre for Global Energy Studies, "these companies are responsible to their shareholders not governments. They're not benevolent organisations".

But it's not just private firms that pump money into corrupt regimes. According to Christian Aid, western governments feed millions of dollars a year into "oil exploitation" through contributions to the World Bank.

To counter widespread corruption, Christian Aid is calling for enforced transparency for all oil projects around the world.

Already there are moves in this direction, driven by the British government which last year set out plans for "publish what you pay" system.

But while the oil companies have leant support for the scheme, its voluntary nature means they are only willing to take part if their rivals do the same.