Quote: “So, we have changed and worked it out today and we said, it is dividend now to the host communities.  And that dividend turned out to be higher than the 10 per cent we were talking about before”.

Political courage, backed by adequate planning, to implement this solution will end militancy in one fell swoop. In addition, there must be insistence on environmental responsibility. With biometrics it should not be difficult to document who lives in these regions so they can be paid directly - not through some middle-man. This has the potential for achieving many other objectives in these regions.

Once we learn to take the road less travelled, we will discover it is the most satisfying and unifying approach to our ultimate destination.

Thursday, 18 November 2010 00:00 Olusola Bello

The Federal Government, yesterday, said it has jettisoned the plan to transfer 10 percent equity of its oil and gas ventures to oil-producing communities in the Niger Delta, citing contentious legal tangles for the decision. In its place, host communities would now be   given dividends based on the value of the assets in their areas. Emmanuel Egbogah, special adviser to the President on petroleum, who made this disclosure in Abuja at the on-going conference on ‘Deepwater Offshore West Africa (DOWA)’, organised by the Nigerian Association of Petroleum Explorationist (NAPE), told the gathering, comprising stakeholders and operators drawn from the oil and gas sector, that: “What the government has done is that it originally started with giving 10 per cent equity participation and then because of legal and other issues,  has done a modification of that, to make it more implementable, because the old design that we had would have taken a lot of years through a lot of constitutional reviews and all that…”

“So, we have changed and worked it out today and we said, it is dividend now to the host communities.  And that dividend turned out to be higher than the 10 per cent we were talking about before”.

The 10 percent equity to oil bearing communities was part of the multi-billion-dollar package to end militancy in the Niger Delta which had hampered the country’s oil production for long. It will be recalled that the equity deal came against the backdrop of a sweeping attempt to overhaul the nation’s oil industry.

It was initiated by late President Umar Yar’Adua as part of the amnesty programme of the Federal Government to bring lasting peace to the Niger Delta. The bill to give teeth to its implementation was promptly sent to the National Assembly where it still remains.

The programme was welcome then by individuals and groups in the Niger Delta including the Ijaw Media Group; but some oil industry analysts had wondered how the plan would work, querying how the10 percent equity would be funded.

In a related development, the Federal Government has shifted its target date of achieving 40 billion barrels of oil reserve and four million barrels per day from the end of this year to 2012. Oil companies however appear to be less enthusiastic about the government’s position as some of the operators said they were yet to see any plan on ground to suggest that government can achieve the reserve target with the new dateline.

Egbogah, who also made government’s latest move known at the Abuja conference, said the decision to set the target dateline was the outcome of the result of the work of the Vision 2020 Committee on Oil and Gas.

“When you talk about the strategies, what we have done is when we worked on the Vision 2020 plan, we considered this situation of our ability to do four million barrels of oil per day and we have put what you described as strategies, what needs to be done, how it should be done and who should do it. And so, very soon, the companies that are saying they could not see it from where they are, would soon see it because every one of them is going to contribute to that being achieved. So, the assignment of who does what is going to go out to all the companies. So, we have the details about how to achieve it. It seems that the will to achieve the target cannot be seen among the operators”.

He observed that there is always a lot of skepticism about everything in Nigeria, adding that “to achieve the 40 billion barrels of oil reserves is not a big deal because we are currently sitting at 38.2 billion barrels and for what is going on in deepwater now, I don’t see how we cannot achieve 40 billion barrels even before 2012 that we said was our time to do so.

So, that is really not a problem, the same thing as the four million barrels of oil production per day is not a big thing that we cannot achieve because right now we are sitting at production capacity of 3.7 million barrels per day, which means that we can produce that today, there are just a few things that need to be done here and there …, therefore, four million barrels by 2012 is not going to be a big deal”.

According to Egbogah, the additional barrels will come from the deep sea and from onshore because in the Petroleum Industry Bill, we have given fiscal incentives to work on many of the onshore fields that had been abandoned by the people rushing to the offshore because of militant activities, but now you know the problem has stopped.

Also speaking on the same issue, the Nigerian National Petroleum Corporation (NNPC) group executive director, exploration and  production, Philip Chukwu, has assured that  the 40 billion barrels oil reserve is achievable if oil companies are determined to do so.

To facilitate work on the various projects, he disclosed that various financial arrangements have been put in place by the government and NPPC.   However, in his comment, Andrew Obaje, the director of petroleum resources, Department of Petroleum Resources, urged the NNPC and its joint venture partners to find a lasting solution to the complaint of cash-call default by oil companies, so that the country’s production could be on the increase again.

According to him, if there is a resolution of the complaints by the oil companies, the  country would be the better for it.

http://www.businessdayonline.com/NG/index.php?option=com_content&view=article&id=16186:fg-jettisons-10-equity-for-oil-communities-&catid=76:hot-topic&Itemid=564