Oil Blocks Allocation: Matters Arising


Statistics show that the total number of oil leases granted operators by the Federal Government as at December ending, 2012, stood at 201. While the total number of Oil Mining Leases (OMLs) in operation are 109, Oil Prospecting Leases (OPLs) are 92.
Yet, there is a school of thought that believes that 83 per cent of oil blocks in the country are allocated to Northerners. But more worrisome is the revelation that 88 per cent of the oil blocks are actually owned by multinational oil companies led by Shell Petroleum Development Company (SPDC).
Interestingly, no fresh allocation of oil blocks has been made since President Muhammadu Buhari assumed office on May 29, 2015. His predecessor, Dr Goodluck Jonathan, also made no fresh allocations. However, fresh allocations may be made by the current administration, with experts saying such is due, as the government is on the verge of revoking operating licences of a number of oil block owners following the expiration of their licences.
It is against this backdrop that the recent pronouncement by renowned and fiery Lagos lawyer, Femi Falana (SAN), that the practice of allocating oil blocks to individuals and International Oil Companies (IOCs) by the Federal Government is against the Constitution of Nigeria, and should be stopped, comes into focus.
Falana, had in a letter, asked President Buhari, to henceforth allocate oil blocks only to the federal and state governments, contending that those who got oil blocks often got more money than the country.
The erudite lawyer said, the practice violates Section 16 (2) (c) of the Constitution, which he said provides that “the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group”.
While calling on the Federal Government to go ahead with the plan to revoke a number of oil blocks and marginal fields hitherto allocated to a few individuals as well as local and foreign corporate bodies by former military and civilian regimes, Falana said the plan is a courageous decision, but that the government would have to desist from renewing the remaining licences of other oil block owners in the country.
He further posited that the President may not be aware that majority of the owners of the oil blocks allocated to individuals were usually sub-leased to offshore companies because the beneficiaries often lack the fund and technical expertise to develop them, adding that by merely collecting huge rents, the oil block owners become stupendously rich while the federal, state and local governments depend on loans and bail out to pay salaries and carry out basic infrastructural development of the country.
According to Falana, the allocation of oil blocks to a few individuals and corporate bodies by the government constitutes gross violation of the fundamental rights of the Nigerian people to freedom from discrimination, equal right of access to public property and in the equal enjoyment of the common heritage of mankind as well as the right to social, economic and cultural development guaranteed by articles 2, 13, 22 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act.
We recall that when in 1956, crude oil, was discovered in commercial quantity in the sleepy town of Oloibiri in today’s Bayelsa State located in the Niger Delta region, the expectation was that the move would bring prosperity, stupendous wealth and, indeed, the good life to the people of the area, nay Nigerians as a whole.
But it is regrettable that the Nigerian people have not benefitted maximally from that giant economic leap so much that it has rather left majority of them worse off, with abject poverty staring them in the face.
Paradoxically, the people have remained poor in the midst of plenty, owing to a number of factors, including the arbitrary allocation of oil blocks and marginal fields by successive administrations in the country. The end result is that the wealth that is buried in the bowels of Oloibiri and in other oil bearing communities in the Niger Delta region is being cornered by a few Nigerians and foreigners.
Again, there is no gainsaying the fact that corruption, which has eaten deep into the fabric of the Nigerian State has remained the greatest bane of the country, as this cankerworm has permeated all sectors of our national life.
There is also no denying the fact that the allocation of oil blocks to individuals in the country is skewed in favour of certain persons from a section of the country at the expense of others. Such allocations, which are grossly lopsided, are intended to serve some political, economic and other primodial interests.
Like Falana, other experts have warned that Nigeria must learn from the pitfalls of the oil block allocations made by previous regimes.
A United States – trained petroleum engineer and former staff of Chevron Nigeria, Alex Neyin, said oil block allocations in the country are hardly transparent as they are done on the basis of ‘man-know-man’.
The Tide agrees no less that the benefits derivable from crude oil production in the country have not trickled down maximally to the ordinary people, and, therefore, suggests that the process of allocating oil blocks should be made public and transparent in such a manner that people with the requisite competence and financial muscle should bid for the oil blocks.
There is also the urgent need to amend the law that arrogates the President of the country the sole right to allocate oil blocks. Vesting such powers in the President is open to abuse and manipulation, as is currently the practice, where some oil blocks were given out to associates, friends and cronies without due process.
However, beyond allocating the oil blocks only to the federal and state governments as suggested by Falana, there is the need for government at all levels to be alive to its constitutional responsibilities of catering for the welfare of the Nigerian people. We agree that allocating the oil blocks to government would leave much more money in the pockets of government, but the multi-million naira question is: will this change anything?
It is sad that the country is still grappling with the problem of epileptic power supply and the general failure of basic infrastructure in virtually all sectors of the country. Poverty is still deep-seated and pervasive. Corruption in high places is still rife. While the poor gets poorer, the rich gets richer.
Unemployment is at its peak. Nothing seems to be working. This is in spite of the fact that the wealth emanating from crude oil is capable of transforming the country and improving the general wellbeing of the people.
In all, in the spirit of equity and social justice, oil producing areas and communities must be accorded priority in the allocation of oil blocks and marginal fields in the country. We strongly believe that this would go a long way in assuaging the deep-seated feelings of marginalization among the Niger Delta people in particular.