Nigeria oil reform must benefit communities: governor

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Nigeria’s plans to overhaul its energy sector must result in a fairer deal for communities in the Niger Delta if there is to be hope of lasting peace, the governor of a main oil-producing state said yesterday.

Delta state governor Emmanuel Uduaghan said the Petroleum Industry Bill (PIB) wide-ranging legislation that will reshape Africa’s biggest energy industry, must be seized as a chance to give local people a greater stake in the OPEC member’s wealth.
“If the Niger Delta people do not benefit from this Petroleum Industry Bill, then we have a problem on our hands,” Uduaghan told a briefing to promote Delta state as an investment destination, held in the commercial capital Lagos.

Corruption and the mismanagement of Nigeria’s oil wealth have left the Niger Delta mired in poverty despite five decades of oil extraction, during which parts of the land and water have become so polluted that residents can no longer farm or fish.

Politicians accused of embezzling tens of millions of dollars share the blame, but local resentment has targeted oil firms and militant attacks on infrastructure have stopped the country pumping much above two thirds of its capacity.

Uduaghan said he and other oil state governors initially opposed the PIB because it “short-changed” local people but said he now hoped it would include a plan to give local communities equity in the joint ventures that produce Nigerian oil.

State oil firm NNPC holds around 60% of joint ventures with foreign firms including Royal Dutch Shell, ExxonMobil and Chevron.

Uduaghan said the proposal was that government would buy 10% of NNPC’s stake on behalf of local communities and that their share in the profits would be kept in a trust fund.

The annual interest payments would be used to fund development projects, based on models used in Alaska and Norway, he said. He said parliament was considering the proposal.
“We believe that if it is not put as part of the PIB or as law, it will be difficult to operate.”

Uduaghan said he had also discussed the proposal with oil firms, who raised no objection as their stakes would not be affected. Communities’ share of cash calls to fund the joint ventures would also be paid by government, he said.

Beer bottles and petrol

President Umaru Yar’Adua offered amnesty earlier this year to militant gunmen who laid down their weapons, the most concerted effort yet to end years of unrest in the region.

Officials say as many as 20 000 gunmen accepted the offer, but sceptics say they will soon return to violence in the creeks if they are not retrained and found jobs.

Delta state is hosting two rehabilitation camps for former fighters and there are two more in nearby Rivers state. But there have been violent protests by ex-gunmen who complain stipends have not been paid and retraining has not begun.

Uduaghan acknowledged there had been some problems, particularly with the camps too small to accommodate the numbers of fighters who disarmed. He said he was pushing the federal government to open similar centres elsewhere in the country.



But he said the amnesty was the correct approach and that it proved military might was not the answer.
“The military approach was not the right approach these youths have a very deep knowledge of the Niger Delta, they know every creek. When you pursue them, you drive them underground, and when you drive them underground, they react,” he said.
“To damage a pipeline just takes one youth who is able to swim and carry a beer bottle that is filled with sand and petrol. It does not require sophistication.”