FG jettisons 10% equity for oil communities

•To pay dividends instead

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.

Businessday Newspaper