Oil & Energy
Implementation Of Committee Report On Niger Delta: Myth Or Reality?
Being a paper presented by Barrister Ledum Mitee, MOSOP President & Chair of the Defunct Technical Committee on the Niger Delta, at the Port Harcourt International Oil and Gas Conference, last week.
The Technical Committee and its Work
The Niger Delta Technical Committee was inaugurated at a period of hightened tension exacerbated by the frustrations and burning sense of injustice that is pervading the region which found extreme expression in attacks on oil installations, kidnapping and assassinations, the nation was at its tenterhooks.
Against the backdrop of a rich history of disturbing economic shortfalls and broken promises intertwined with devastating environmental damage and conflict, there were hightened expectations of the people as many saw the Committee as the last bus stop in the realisation of the resolutions of the problems of the region. Many, however, viewed the work of the Committee with great skepticism not because of doubts on the ability of the Committee to accomplish its assigned task creditably but whether the report of the Committee will not join its predecessors on the shelf?
Perhaps to reassure Nigerians, President Goodluck Jonathan, then as Vice President, in his inaugural address in urging members to make “suggestions for Government’s necessary and urgent action”, went on to declare:” On behalf of the Government, I want to assure you that your recommendations will not be treated with levity.” In receiving the Report of the Committee on the 1st of December, 2008, the late President Yar ‘ Adua similarly assured that government would study the report urgently and implement those aspects that it believes would lead to the permanent resolution of the problems of the Niger Delta region.
These were the circumstances that the Committee set down to work, albeit under considerable challenging circumstances, but with full realisation of the expectations of the nation and the international community.
Some Key Recommendations
In making the recommendations, the Committee proceeded from the premise that whilst the problems of the Niger Delta may be homogenous and exhibit a certain measure of similarity, suggesting the same origin, the region is far from homogenous. Thus, while some of the recommendations are generally applicable, others are targetted at unique challenges of states and communities that constitute the region. The Committee also recognised that the importance of the region to the country makes the solution to its problems a national issue with international implications, and as such, its solutions ought to be addressed as a matter of national interest.
Furthermore, The Committee noted that past and so far existing efforts to redress the Niger Delta crisis have suffered from want of political will. This has resulted in complete lack of trust necessitating that any genuine attempt at redressing the problem has to be dramatic and seen to be sustained and well resourced.
For these reasons, it is suggested that its key recommendations must not only be implemented but so implemented as a package and not in isolation. The Committee therefore boxed certain recommendations into a Compact with stakeholders that will commit to support critical short-term changes that are necessary for stemming the decline of the region into blown conflict zone. The short term Compact which seeks to deliver on visible, measurable outputs which should produce material gains within an 18 month period was to be guided by the principle that the three tiers of government and other stakeholders report on progress in implementation every three months.
The key recommendations include:
Funding Infrastructural Development
The Committee recommended the establishment of a Special Niger Delta (Infrastructural) Intervention Fund for the needed urgent massive infrastructural intervention in the region. The Fund should receive contributions from oil companies, Federal and state governments through the Excess crude Account, Foreign Exchange Reserve as well .as international· donor Agencies, international . pledges and grants and private sector sources.
Communities Stakes in Oil Activities
In order to facilitate a situation where communities will and voluntarily protect the assets and operations of oil companies, it was recommended that a framework that allows them to share in the wealth available to each community has to be established. The establishment of community Trust Funds will pool together resources from compensations, royalties, rents and entitlements directly accruing from relations with oil and gas companies. There is thus the need to institutionalise by law, a Community Trust Fund scheme for oil-producing communities which will allow registered community associations and local groups the opportunity to participate in deciding how the funds are used.
Similarly, it was recommended that power and water supplies from the oil flow stations should be extended to communities within 15 kilometres radius of such stations to ensure that the communities have requisite stakes in the continued operation of such flow stations.
Perhaps it is relevant to add here that the current Petroleum Reform Bill provides an excellent opportunity to work out a framework for taking on board the Committee’s recommendation on the payment of compensation and rentals to oil bearing land owners at full economic rates and for oil operators to pay royalties into the community Trust Funds of not less than $2 per barrel.
It was similarly recommended that by last year, 2010, appropriate regulations should be established to compel oil companies to have insurance bonds against environmental pollution, strengthen independent regulation of oil pollution and work towards an effective EIA mechanism. It was also recommended that enforcement of critical environmental laws be made a national priority whilst fraudulent environmental cleanups be exposed and prosecuted and gas flaring should cease by December 3151 2008.
Increased Revenue
Increase allocation accruing from oil and gas revenues to the Niger Delta states to 25% within a framework in which the additional funds are dedicated largely to new infrastructure and sustainable development of the region.
Infrastructure
It was recommended, amongst others, that the East-West Road dualisation from Calabar to Lagos with at least one link road per state to the coastline should be fast-tracked to ensure completion by 2010 as well as the commencement of both a coastal road and railway from Calabar to Lagos.
Also recommended was that the federal government should provide immediate funding for full takeoff of the Federal University of Petroleum Resources in Effurun, Delta State and that PTDF be refocused and re-directed to provide scholarship at all levels to make at least 50% of its beneficiaries to be persons from the Niger Delta.
Disarmament, Demobilisation and Reintegration (DDR)
The Committee recommended a DDR process that should begin with some confidence building measures on all sides which include ceasefire on all sides, pull back of troops, credible conditions for amnesty and the setting up of a DDR Commission. It is worthy to note that whilst the amnesty proposed by the Committee was a component of an entire DDR process, the current amnesty programme appears to be a stand-alone concept with no attempt to address the root causes of the problems that bred armed militancy in the first place.
Since the announcement of the amnesty for Militants, there has been some felt concern which stems from the fact that in so far as the amnesty focused almost exclusively on militancy without any pretence to reflect on the underlying concerns of the people of the region, it certainly would not bring about the desired sustainable peace in the Niger Delta. In so far as the policy would appear to be merely designed to appease militant agitations, it was like giving paracetamol to a clinically ill patient. The policy which is supposedly backed by a nasty budget, which is doubtful if it reflects on the militants themselves, appears not to be well thought out as there were no consultations with critical stakeholders and there was no definite and sustainable post disarmament plans. More importantly, it does appear that it makes the false assumption that ‘success’ of disarmament of a section of armed miltants without any serious efforts at addressing the injustices afflicting the region would by itself translate to peace or the end of militant agitation in the Niger Delta.
There is the crying need therefore to re-appraise the current amnesty offer to a credible negotiated Disarmament, Decommissioning and Reintegration (DDR) programme. There is the need therefore to structure a process that mops up the still available large amounts of small arms and ammunition and put them or most of them beyond the reach of militants and would-be militants. The process would have to be designed to ensure that where disarmament terminates, demobilisation begins and where demobilisation ends, reintegration commences.
Again, it need be noted that in the committee’s view, although there are international best practices on the key elements of implementation of DDR, the natural starting point should be the setting up of a DDR National Commission or Implementation Committee which should draw membership from amongst others, religious leaders, the civil society, government, ideally a UN observer or technical expert for the international community’s buy-in etc. It would be important that the composition should be such as to captures the confidence of the critical stakeholders.
Youth Employment
As international best practices suggest that it might be counter productive to target any empowerment programme for only the ex-militants in order not to give the impression that only bad behaviours can attract reward, the Technical Committee recommended the establishment of a direct labour Youth Employment Scheme (YES) in conjunction with the States and Local Governments that will employ at least 2,000 youths in community work in each of the local Governments in the Niger delta.
Security Reform
It also need be emphasised that any sustainable peace process in the Niger Delta must take into consideration the Committee’s recommendation to:
Improve the operational integrity of security forces in the region to a level that assures communities and business organisations of safety without harassment and disruption. This will involve definite steps to eliminate all forms of abuses by security forces and institute proper programmes or reorientation, demilitarisation, retraining and accountability of all security operatives.
Concluding Remarks
In the light of the foregoing, it does not require rocket science or the special expertise of someone who served on the Committee to decipher how far the recommendations of the Committee have been implemented or not. Whilst we must acknowledge the fact that the implementation of the amnesty programme have greatly reduced the hostilities in the region, to the extent that oil production has increased by over 100% over the figures of the pre-amnesty era, but the fact that the increased revenue from oil has not reflected in improved livelihoods or facilities available to the oil bearing communities of the region should be of worrying concern.
As members of the Technical Committee stressed at a one- day meeting convened on November 5th 2010, to consider the implementation of the Report, “a selective and ad-hoc implementation of the recommendations undermines the sense in which the Technical Committee on the Niger Delta and indeed the Region envisaged the pursuit of their peace, development, security and stability.”
Ledum Mitee
Oil & Energy
Bill Prohibiting Gas Flaring Passes 2nd Reading
The Bill for an act to prohibit gas flaring, encourage commodity utilisation, and provide for penalties and remedies for gas flaring violations has passed its second reading in the House of Representatives.
Sponsored by the Member representing Ikorodu Federal Constituency (APC, Lagos), Babajimi Adegoke Benson, the bill seeks to prohibit the flaring and venting of natural gas, except in strictly regulated circumstances, while encouraging the utilisation of gas resources to foster economic growth and energy generation.
The proposed legislation aims to mitigate the environmental, health, and economic impacts of gas flaring, aligning Nigeria’s oil and gas operations with international climate change commitments.
Offenders, who violate the provisions of the proposed law, would face stringent penalties, including fines of $5 per 1,000 standard cubic feet of gas flared and potential suspension of operations for repeat violations.
Leading debate on the general principles of the bill, Benson said gas flaring has plagued Nigeria for decades, resulting to severe environmental degradation, public health crises, and economic losses while it environmentally, contributes to greenhouse gas emissions, global warming, and acid rain, exacerbating climate challenges.
The lawmaker said public health impacts of the practice are equally dire, as pollutants from gas flaring cause respiratory and cardiovascular diseases, particularly among residents of communities close to flaring sites.
According to him, economically, flaring results in the waste of a valuable resource that could otherwise be harnessed for energy generation or exported to generate revenue.
Benson insisted that the bill was designed to address those issues while bringing Nigeria in line with global standards such as the Paris Agreement on climate change.
“The bill provides for a comprehensive prohibition of gas flaring except in emergencies or when explicitly authorised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“Operators are required to submit and implement Gas Utilisation Plans, detailing how gas that would otherwise be flared will be captured, processed, or commercialised.
“Offenders, who violate these provisions, face stringent penalties, including fines of $5 per 1,000 standard cubic feet of gas flared and potential suspension of operations for repeat violations. Furthermore, the Bill ensures that communities affected by gas flaring are entitled to compensation and environmental restoration, creating a mechanism for redress.
“Transparency and accountability are integral to the enforcement framework of this Bill. Operators must submit regular reports on gas flaring incidents, which will be audited and made publicly available by the NUPRC. This approach ensures public oversight and stakeholder engagement, fostering trust and compliance.
“Nigeria’s adoption of this Bill positions the country to emulate such success, ensuring a balance between environmental stewardship and economic development.
“The implementation of this Bill will be overseen by the Nigerian Upstream Petroleum Regulatory Commission, which will monitor compliance through regular audits, enforce penalties, and facilitate gas utilisation projects in collaboration with operators and development partners.
“The Anti-Gas Flaring (Prohibition and Enforcement) Bill, 2024, is a timely and necessary response to one of Nigeria’s most pressing environmental challenges. Its provisions are both practical and forward-looking, addressing immediate concerns while laying the groundwork for a sustainable future.
“I urge all Honourable Members to support the Second Reading of this Bill as a demonstration of our collective commitment to environmental protection, public health and economic progress”, he added.
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Oil & Energy
‘Indigenous Companies To Gain From Shell’s Contract Awards’
Oil major, Shell, has restated its commitment to the development of Nigerian companies through contract awards and scaling up of expertise.
Managing Director, Shell Nigeria Exploration and Production Company ((SNEPCO) Limited, Ron Adams, made the remark while speaking at the Opening Ceremony of the 13th edition of the Practical Nigerian Content forum held in Yenagoa, Bayelsa State, with the theme “Deepening the Next Frontier for Nigerian Content Implementation”.
Represented by the Manager, Business Opportunity, SNEPCO’s Bonga South-West Aparo Project, Olaposi Fadahunsi, he said several benefitting companies had taken advantage of the patronage to expand their operations and improve their expertise and financial strength.
Adams said, “Shell companies execute a large proportion of their activities through contracts with third parties, and Nigeria-registered companies have been key beneficiaries of this policy aimed at powering Nigeria’s progress”.
He emphasized that Shell companies in Nigeria also continued to develop indigenous manpower through scholarship programmes with over 3,772 undergraduate and 109 Niger Delta post graduate scholarships since 2016.
“As we speak, beneficiaries of the 13th edition of the Niger Delta Post Graduate Scholarship awards are pursuing their studies in the United Kingdom. The employability rate of the scheme is high with over 98% of the graduates who won the awards securing employment in the oil and gas industry, academia and Information Technology, among other sectors, within one year of completing their studies”.
He commended the Nigeria Content Development and Monitoring Board (NCDMB) for ensuring compliance with the Nigerian Content Act saying “Nigerian content will continue to be an important part of Shell operations”.
The four-day conference hosted by the Nigerian Content Development and Monitoring Board (NCDMB) and participating companies reviewed progress on the development of Nigerian content pertaining to the implementation of the Nigerian Oil and Gas Industry Development (NOGICD) Act since it was enacted in 2010.
Shell companies in Nigeria are among the more than 700 oil and gas entities that participated in the forum with a strong message of support for Nigerian companies, having awarded contracts worth $1.98 billion to the businesses in 2023 in continuing effort to develop Nigerian content in the oil and gas industry.
Oil & Energy
NNPC Begins Export From PH Refinery
The Nigerian National Petroleum Company Limited (NNPCL) has sold the first cargo of Port-Harcourt low sulfur straight run fuel oil (LSSR) to Dubai-based Gulf Transport & Trading Limited (GTT).
The company is expected to load the cargo in the coming days onboard the Wonder Star MR1 ship, signalling the commencement of operations at the plant and the exportation of petroleum products.
The ship would load 15,000 metric tons of the product, which translates to about 13.6 million litres.
Although the volume coming from the NNPC into the global market is still small, the development has the potential to impact the Very Low Sulphur Fuel Oil (VLSFO) benchmarks in the future, while changing the market realities for Atlantic Basin exporters into Nigeria and other regions.
The sulfur content of the export by NNPC stands at 0.26 per cent per wt and a 0.918 g/ml density at 15°C, according to Kpler, a data and analysis company.
The cargo was reportedly sold at an $8.50/t discount to the NWE 0.5 per cent benchmark on a Free on Board (FOB) basis.
Kpler reported that the development would help displace imports from traditional suppliers in Africa and Europe, as Nigeria’s falling clean product (CPP) imports are already decreasing, dragging imports into the wider West Africa region lower as well.
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