Government To Transfer 10% Of Oil Ventures To Niger Delta Residents

http://www.ft.com/cms/s/0/6e85dd6a-bc04-11de-9426-00144feab49a.html

Nigeria offers ‘revolutionary’ delta deal

By Tom Burgis in Port Harcourt

Published: October 18 2009 18:14 | Last updated: October 18 2009 23:37

Nigeria plans to transfer 10 per cent of all its oil and gas ventures to the inhabitants of the oil-producing Niger Delta, in an attempt to end a rebellion that has hampered production in sub-Saharan Africa’s leading energy supplier.

The initiative, which comes against the backdrop of a sweeping attempt to overhaul Nigeria’s oil industry would, if approved, by parliament signal a bold new phase in government efforts to broker a lasting settlement in the delta. But first it has to overcome the anticipated objections of representatives of other regions.


The latest overture follows an amnesty that has lured into the open some of the main leaders of the militants who have led a sustained campaign in the delta region against the federal government and the oil industry.

Emmanuel Egbogah, the president’s special adviser on oil, told the Financial Times that Umaru Yar’Adua, president, has backed the idea of transfering to delta communities 10 per cent stakes from the holdings of the national oil company in the joint ventures that exploit Nigeria’s vast reserves,

Mr Egbogah said he intended to add the proposal to reforms that the government hopes to enact by the end of the year, which would also impose tougher terms on oil companies but which are currently embroiled in a tortuous debate in parliament.

A Chinese offer for up to a sixth of the country’s reserves – including stakes in some blocks operated by Royal Dutch Shell, ExxonMobil and Chevron – has raised the stakes still further.

The plan for the delta was “a serious one, a major one, something quite revolutionary”, Mr Egbogah contended.

The initiative is aimed at answering a longstanding demand from the delta’s fighters and activists, ethnic leaders and aggrieved communities for a share in the ownership of the oil that generates 80 per cent of government revenue.

All citizens of oil-bearing communities would be entitled to cash benefits, delivered through a trust-style mechanism, which they could use individually or pool for social projects. It was unclear how the government would apportion the stakes and avert competition between different communities for a larger slice of them.

The rest of Africa’s most populous nation could face reduced income as a result but potentially this would be offset by higher output, if the initiative led to a reduction in sabotage of the oil industry.

Mr Egbogah said the 10 per cent stakes would pay dividends on revenues after taxes and costs to communities, bypassing powerful governors of the eight oil-producing states who were instead calling for an increase in the extra share of petroleum revenues they already receive. The stakes could not be resold.

The government hopes to provide a disincentive to oil-theft and sabotage by linking the earnings of each qualifying community to production from the joint venture that extracts its resources.

“These benefits will flow directly to them,” Mr Egbogah said. “Every community, whether blind or deaf or dumb, every citizen will say: ‘I own a part of this business.’ ”

Attacks on oil facilities have cut production in Nigeria, an important supplier to the US, by as much as 40 per cent in recent years. A multibillion dollar trade in stolen oil has flourished while the majority of the delta’s estimated 28m people live amid despoiled waterways often lacking basic services.

The misery persists in spite of the oil-state governments receiving an additional 13 per cent of national petroleum revenues, making their budgets two or three times the size of those in some other regions.

Mr Egbogah said the plan would cover “all petroleum assets in the country” but added that “obviously there are no oil-producing communities in the offshore”, which is home to major deepwater fields.

Seven onshore joint ventures between the state-owned Nigerian National Petroleum Corporation and foreign oil groups in the delta account for 70 per cent of Nigeria’s production. The NNPC holds between 55 per cent and 60 per cent in each.

Officials believe the community stakes could see well over Naira50bn ($338m €227m, £207m) diverted to the communities in its first year.

Shell said its joint venture, which produced 17 per cent of Nigeria’s output last year, has contributed $34bn (€23bn, £21bn) to the government in the past four years. The Anglo-Dutch group said the government received 95 per cent of all onshore revenue after costs.

10% is too small. This proposal is a means for divide and rule.

Give us true federalism.

thats wassup

@ndu_chuks

All this your talk of "unprecedented force". Do you really think a man defending his home will give way to a stranger threatening "unprecedented force"?

You guys got jokes sha!

You will probably never get 'true federalism'.
And 10% is a pretty good deal when you stack it alongside the derivation money already accruing to the ND states.

This will finally force the people of the ND to look inwards at their corrupt local leaders who loot the monies intended for development at the state and grassroots level.

Another Akara giving to a hungry child to stop him crying.
I wonder why our government is afraid of applyign the main solution to the problem.
The same thing we are crying for is what makes united states what they are today.
Lets see how that will work out solving ND problem.

@Beaf, so a waterfountain is essential to the people How? Roflmao!!!

Dude, I used to think you one of the intelligent few on here but I have to say you have been disappointing a lot of folks since you started on this ND rant of yours. Someone asks of free education from primary to university level and your repost is the above?? ***SHUDDERS****

I c . . .  I ca. . .  I can. . . I can't . . . . I can't even believe that came from someone who actually has his head in the right place for his own people, let alone for himself. lol

Roflmao!!!!


Again, someone asked of Free Education for all from Primary to University level and you are here telling me of Waterfountains and air-conditioned buses?? Roflmao!!! you really are a class act. Roflmao!!!

Please stop. . . seriously stop acting like an imbecile and try to pretend you still have a brain up in that skull of yours.

For all you know of me, I am probably another Niger Deltan, only I don't carry it on my head. Or are you going to tell me that I am not because I don't agree with you? I cry for people like you who are quick to take SIDES in a country like Nigeria where we have learnt time and time again that the people remain the duped at the end of the day.

You like to lie, don't you?? Roflmao!!!! How can I be from lagos when I readily confess over and over that I am an outsider with a house in lagos? What else? Will those who have read that I have lived in Kano also claim I am from Kano? Or those who read that I have lived in Aba claim that I am from Aba, or the one who reads that I spent extended periods in South africa say I am from South Africa??

Again, please, seriously, start using your head, and stop letting your emotions use you cause you come off more and more like an emotionally deranged idiot who cannot reason past his emotional issues.

And he continues rambling. Dude, if you want to belive I am from epe that is fine, but do get to answering the question asked. I am tired of going around the circle with you. Any INTELLIGENT answers even one??

@ kobojunkie         we are not here 2 make gruges or sentiments of tribalism. just to air our views.i believe u are not a true N'delta citizen,because if u are??? u wont be sayn all these.u should understand that what ever we have had 4 the past years is just a tips of OUR ICEBERG.the fact remains that we are being maginalise by the federal govt, I AM PROUDLY A N'DELTAN B COS WE ARE RICHLY BLESSED.

10% Of Oil Ventures under the same lousy management team,

Talk about spinning wheels and throwing ice at the sun,

@ Korofojunkje or whatever u call urself just like your name junkie,no sense in your big head,big fooool, 'sapient adult' mumu 4 ever

My point exactly!
Right in front  of their faces the money gets looted. And they constantly keep looking at Aso Rock and Abuja for more and more.