The history of Oil Mining Lease (OML11) in Ogoniland in Rivers State is a long and tortuous one. But the most important thing about this vast oil and gas producing oil field is that the Rivers State Government, under the watch of Governor Nyesom Wike, has purchased a stake in it.
Governor Wike, in a state broadcast on September 30, 2019, announced that the state government had acquired the 45 percent equity stake belonging to Shell Petroleum Development Company (SPDC) which had operated the facility since 1958.
According to him, the government acquired the SPDC’s equity interest in OML11, situated in Ejama-Ebubu Community in Eleme Local Government Area.
While espousing what the State stands to benefit from such a bold initiative, the Governor indicated that the interest of the State was paramount, as it acquired the SPDC’s 45 per cent equity interest to the tune of $150 million.
Governor Wike said “that rather than stand by and watch other persons or group purchase SPDC’s 45 per cent interest in that OML11 and further exacerbate the poverty of the people of the State, a responsible and responsive state government should weigh in and bid for the purchase of SPDC interest already set down for auction”.
He further indicated that it would be in the overall interest of the State, the other Federating States and the Federal Government to do so, stressing that he had further directed the relevant government agencies to take immediate steps to liaise with any financially capable companies to partner with the Rivers State Government to ensure that the said oil field comes on stream within 15 months.
He equally disclosed that the State government would graciously concede some portion of its 45 per cent equity interest to all oil-producing communities within OML11, to enhance mutual ownership, participation and sharing in the benefits of these resources.
While further advancing reasons for the State government’s action, the Governor said an oil spill caused by SPDC’s oil pipeline in Ejama-Ebubu Community since 1970, which had been an issue of litigation, has remained unattended to uptill this day, contending that Rivers State has suffered the worst impact of environmental degradation resulting from oil-related operations.
Most importantly, he noted that it has become unlikely that for peace and security, the people of Ogoni would welcome SPDC on their land forming part of OML11, coupled with the fact that a lot of revenue is lost to the Federation Account accruable to the 55 percent stake of the Federal Government in OML11 and the rest of the Federating States due to non-production by the facility.
According to him, Rivers State Government has continued to lose 13 percent of its derivation fund from the 55 percent stake of the Federal Government in that field for nearly 30 years now, which revenue would have transformed the state and its people for the better.
The Tide recalls that OML11 is one of the most important oil blocks in Nigeria, in terms of oil and gas production in the country, accounting for production of 28,000bpd of crude, and contains 33 oil and gas fields scattered in the four Ogoni-speaking local government areas of Rivers State.
Unfortunately, the operatorship of the oil facility has been dormant for 26 years now after the Ogonis sacked SPDC following the hanging of environmental activist and writer, Ken Saro-Wiwa and nine of his kinsmen, among other factors.
To say that Ogoniland, home to OML11, has a very chequered history when it comes to oil and gas exploration and engagement with international oil companies, is to state the obvious. We say so because from 1958, when SPDC began oil exploration in Ogoniland till date, the entire landscape has apparently been at the receiving end of the various environmental hazards that have accompanied oil and gas production. Curiously enough, the people of the area and by extension, the whole of Rivers State have continued to bear the brunt of oil politics over the years.
The Tide agrees no less with Governor Wike that the investment in OML11 would not only address the debilitating problem of poverty but also open vast socio-economic opportunities for Rivers people and all those resident in the state. We, therefore, commend the government for this bold initiative of going into investment in the oil and gas sector.
The decision by the government to concede some portion of its 45 percent equity interest to all the oil-producing communities in OML11 is a welcome development. This would no doubt offer all the stakeholders a sense of belonging.
We, however, implore the State government to give special consideration to local content in partnering with competent companies to drive the project. There is no denying the fact that several qualified Rivers citizens are out of job or not accommodated within the oil and gas sector due to extraneous and other primordial considerations. Expectedly, this bold step by the government would bridge this yawning gap and offer the people the much-needed succour and hope.
There is also the need for the government to carry along all stakeholders for this lofty venture to achieve the desired results.
Also, this is the time for all stakeholders to throw their weight behind the government, and eschew all forms of bickering and agitation that may thwart or truncate the good intention of the Wike administration in acquiring the oil facility.
It is a good thing that this is coming at a time when the dust raised by the varied conflicts surrounding the OML 25 in Kula Kingdom in Rivers State has settled. The Belemaoil Development Model can be replicated in Ogoniland for the overall wellbeing of the people. This is definitely not the time to play politics with this current Rivers State Government’s bold initiative.
Nigeria And Recession Alert
The International Monetary Fund (IMF) recently projected that Nigeria’s economy would soon witness its worst recession in 30 years.
This projection was part of the Fund’s April 2020 World Economic Outlook report released penultimate Tuesday in Washington DC, United States at the commencement of its 2020 Spring meeting held through video conferencing.
The IMF further said that Nigeria’s economy will recede by 3.4 per cent in 2020 due to the COVID-19 pandemic, which has disrupted the global supply chain of most commodities, including the country’s main export commodity, crude oil.
It noted that this would be the worst economic setback in 30 years for Africa’s largest economy, after a negative economic growth of 1.51 per cent in 2016.
According to the IMF Chief Economist and Research Director, Gita Gopinath, the impending global recession would be the worst since the Great Depression between 1929 and 1932 when the advanced economies shrank by 16 per cent.
While Nigeria’s Gross Domestic Product (GDP) is expected to shrink by 3.4 per cent and land her in another recession, the Fund’s projected outlook for Africa’s most advanced economy (South Africa) is even worse at 5.8 per cent, from a 2019 growth of 0.2 per cent.
Nigeria was hoping to improve on her 2.2 per cent 2019 growth rate before the advent of the Coronavirus pandemic which saw the global oil price of petroleum tumbling. In fact, while oil prices were taking a bashing (no thanks to the muscle flexing between Russia and Saudi Arabia), the COVID-19 pandemic simply aggravated the situation. Currently, North Sea Brent crude is reported to be trading at USD 31.48 per barrel while Western Texas Intermediate sells for around USD17.75 per barrel. OPEC Basket is USD12.22.
To say that Nigerians did not see this coming will be the height of insincerity as there had been suggestions to nearly every administration to diversify the nation’s economy as to move the country away from its over dependence on petroleum as main revenue earner.
The Tide is deeply troubled that this gloomy projection is coming at a time when the average Nigerian is wishing that the trauma of the 2016 recession would soon be over and for things to return to normal.
The effects of job losses, high cost of living, border closure, herder–farmer clashes and the rising crime rate had led to a worsening of the nation’s misery.
We are also not unaware of the latest warning by the United Nations World Food Programme (WFP) in which Nigeria was listed as one of the 10 countries that would soon experience severe famine of biblical proportion.
With these projections indicating impending national calamities, we fear that the government and, indeed, Nigerians hardly have the time to make any meaningful preparations.
Already, the USD 57 per barrel crude oil benchmark in the 2020 budget has been reviewed downward, even as today’s oil price still makes nonsense of that review. Also, capital expenditure has been severely downsized. This is even as the nation’s USD 1.5 billion debt servicing pledges have become impracticable and need to be renegotiated.
Inflation rate has already entered double-digit while the steady depletion of the external reserve piles pressure on the naira’s worth. What’s more, with COVID-19 came the adoption of national and interstate border closures as part of containment measures. The intra-city lockdowns that also followed led to a halt in economic activities with the attendant negative effects on Gross Domestic Product (GDP).
The nation may therefore begin to reconsider redenominating her currency as was successfully done by Ghana some years ago, after decades of economic doldrums. Debt forgiveness is already out of any consideration for Nigeria because she is no longer in the world’s list of Highly Indebted Poor Countries (HIPCs), especially since after rebasing her economy in 2013 and emerging as the largest economy in Africa. She is now considered a middle income nation.
Efforts should be geared to better manage the nation’s available income. This period should be likened to a war situation when emphasis should be reduced in infrastructural development, rather efforts should focus on amassing weapons to attack the common enemy which in this case comprises Coronavirus, corruption, misery, hunger, climate change, among others.
There is no doubt that COVID-19 lockdowns have eroded whatever savings that were available for investment to the Micro, Small and Medium Scale Enterprises (MSMEs) in the country. In fact, some have had to convert their present stocks of goods for their daily consumption and survival. And this renders a serious blow to the nation’s GDP.
We commend the IMF for, as usual, alerting most vulnerable countries like Nigeria on the difficult times ahead. We also believe that, as it had always done in the past, the Fund will follow this up with a list of some necessary steps that need be taken by the government in order to curtail the extent of these difficulties.
And to the government, the call for a resort to mechanized agriculture and massive food storage has never been more expedient for a country of about 200 million people than now.
Still On COVID-19 Palliatives
Just over a week ago, President Muhammadu Buhari addressed Nigerians on the need to extend the Federal Government’s lockdown and stay at home order in parts of the country, particularly Lagos and Ogun States and the Federal Capital Territory, FCT, owing to the continued spread of the Coronavirus pandemic, also called COVID-19.
The President, in considering the expected impact of the lockdown on Nigerians, also outlined plans to mitigate the sufferings that await the people, especially the poor and most vulnerable in the society. Among other measures that were designed to bring succour to Nigerians, President Buhari announced as palliatives, the sustenance of government’s food distribution programme, cash transfers and loans repayment waivers. He also directed that the current social register be expanded from 2.6 million households to 3.6 million households in two weeks.
These palliative measures, according to Buhari, were aimed at supporting additional homes with his administration’s Social Investment Programme, SIP.
While The Tide commends the efforts of the Federal Government in trying to curtail the spread of the pandemic in parts of the country and the President’s apparent passion and willingness to cushion the impact of the lockdown on economic activities, lives and living conditions of the populace, we think that the measures may have gone awry even before take-off.
We believe that despite the good intentions of the President or the original motive of the SIP palliative designers, the implementation of the measures has been skewed and seem to have defeated whatever gains they were primed to achieve.
We say so because the Buhari’s Social Investment Programme, SIP, which has been receiving a budget of N500 billion allocation a year since 2016, under which structure the palliatives are meant to reach Nigerians, has not had the desired effect on the poor and most vulnerable in the country.
Since the stay-at-home lockdown as a result of the COVID-19 pandemic, most Nigerians have been crying out for some sort of intervention by the Federal Government as palliatives for them. Even the cash transfers, which the President ordered after the initial lockdown order on Lagos, Ogun and FCT did not affect most of the poor and vulnerable in those states.
Insinuations abound that the Social Investment Programmes, which were used to drive the palliatives, lacked transparency and at the best, a political gimmick that served the interest of the ruling All Progressives Congress, APC, and its cronies.
It is unfortunate that it has taken this pandemic to expose the ineffectualness of the much vaunted SIP of the Federal Government. Even the leadership of the National Assembly has admitted the failure of the SIP and the attempt to hinge the COVID-19 palliatives on its structure. In addition, the so-called national social register that is to be expanded to contain 3.6 million households, cannot be said to be a true representation of the poorest of the poor and vulnerable in the country. There is no explanation or empirical evidence of how names/households were arrived at for the social register.
In fact, the register may not be different from a compilation of political party faithfuls’ names kept for patronage. This, perhaps, lends credence to the fear that if the palliatives are distributed based on the SIP modalities, many Nigerians, especially the poor and vulnerable that need them may be left out.
That is why we believe that government needs to think outside the box at times like these. Indeed, all Nigerians are affected by the current lockdown and suffer one sought of discomfort or the other as a result, even if it is at varying degrees. While we agree that some citizens feel the pang of the situation more than others, attempts should be made to reach out to more Nigerians in this time of need, rather than second guessing on who the poorest of the poor and vulnerable are.
We, therefore think that instead of relying on a register that apparently excluded most Nigerians abinitio, especially those that need the palliative and other interventions of government to send money across, the Bank Verification Number, BVN, should be a fair and sure way to reach majority of Nigerians with the palliatives.
Without prejudice to the fact that there are wealthy Nigerians, who may not need the palliatives, they, however, constitute a little percentage when compared to those whose lives may be saved by the gesture from government.
Through the BVN, we are convinced that at least, each family in the country would have a beneficiary from the palliatives. Moreso, with the cash transfer via the BVN, every family, especially those that depend on daily income but could not carry out their businesses due to the restrictions, would be able to restock food items as soon they have the window.
In other developed climes, there are efficient and transparent schemes such as social security and other measures designed to cater for the vulnerable, the poor, the aged and the unemployed in the society. Even the citizens are pre-profiled and stratified that every stratum could be isolated for any particular scheme.
It is unfortunate that the pandemic has exposed our system as not working, but now is the time to abandon most of the underlying sentiments in our system and embrace an all-inclusive approach that will serve the COVID-19 palliatives to the majority of Nigerians.
Need For COVID-19 Lab In Rivers
I want to thank you for your firm, strong, committed and personally-led response to COVID-
19 in Rivers State. Rivers is one of the most important economies in the country. So, Rivers is important, not only to you but to the entire country. We thank you very much for your leadership and we need your leadership to continue in order for us to continue doing our work nationally”. That was part of how the Director General of the Nigeria Centre for Disease Control (NCDC), Dr Chikwe Ihekweazu, captured the pivotal economic position Rivers State occupies and the robust efforts of the Chief Executive of the state in ensuring the protection of not only the lives and property of the indigenes and residents of the state, but also safeguarding vital economic interest of the country threatened by the ravaging COVID-19 global pandemic.
As noted by the NCDC DG, victory in the battle against COVID-19 in Nigeria largely depends on the strength of the synergy between the national and sub-national administrations, with all parties conscientiously, adequately, timely and proactively playing their parts.
It is on this plank that The Tide is concerned that it has taken too long for the Federal Government to set up a functional Coronavirus disease laboratory in Rivers State and strongly urges the federal authorities to activate a testing centre in the state without further delay.
We believe that every facility and infrastructure necessary for the containment of the deadly pandemic in the country should have been up and running from the word go, knowing that apart from being a part of the frontline social and economic nerve centre of the country, Rivers State also hosts the majority of foreigners in Nigeria, only next to Lagos and Abuja. The compelling need for the full-scale operation of all response activities against COVID-19 in Rivers State by the central administration is also underscored by the fact that the state remains an entry and exit point of trans-national travellers in and out of the country through its active international airport and sea ports.
Last week Wednesday, the Honorable Minister of Health, Dr Osagie Ehanire, at the COVID-19 Presidential Task Force press briefing in Abuja, disclosed that a total of 12 functional COVID-19 testing laboratories, with a capacity to test 1,500 samples daily had been activated in the country. The question is: why and how come Rivers State has still not been considered for one?
We are not unaware that Osun, Lagos, Oyo, FCT, Sokoto, Kaduna, Kano, Ebonyi, Borno, Plateau and Rivers States were originally programmed to be provided with testing laboratories but we find it curious that Rivers State that should have been prioritised among others is yet to have one with 12 already running, even though it is obvious and understandable why a state like Lagos should have multiple at this point in time.
By a stroke of good fortune and the resources and energy mustered by the Governor, Chief Nyesom Wike, the state is free of any confirmed case of COVID-19 infection after the successful treatment and discharge of the two index cases. However, the country cannot afford to push her luck too far by the seeming lack of urgency in doing the needful, the expedient and the imperative.
To continue to procrastinate the setting up of a functional laboratory in the state is to expose the population to mortal danger and to run the risk of stretching the lean resources of the state government beyond elastic limits.
The Rivers State Government has, so far, done a commendable job of holding the forth and keeping the rampaging murderous COVID-19 at bay by the number of stringent and often painful measures with alertness, regular evaluation and unrelenting monitoring of the situation.
The strength of the government is also greatly tasked and strained by the corollary need for the provision of palliatives to the people whose sources of livelihood have had to be shutdown to prevent a possible community spread with its devastating consequences.
With the state government undertaking to buy food and distributing to the people in the 23 local government areas in order to keep them at home as a measure to stave off avoidable contacts and transmission of the virus; the establishment of isolation and treatment centres and the additional provision of other personal protective items, there is no denying the fact that the government needs as much assistance as it can get from all stakeholders in order to make the response a holistic one with guaranteed victory.
A stitch in time, they say, saves nine and in recognition of the critical value of early detection, isolation and treatment in the COVID-19 containment effort, The Tide is constrained to insist that the setting up of a testing laboratory in Rivers State is a necessity that needs to be attended to with utmost dispatch by the Federal Government and or any other concerned corporate bodies.
To this end, we urge the International Oil Companies (IOCs), jointly or separately, and other multi-nationals doing business in the state (at whose instance the state hosts a good number of its expatriate population) to quickly think in the direction of meeting this all important need that will save lives, protect the economy of the state and restore normalcy in the general state of affairs in good time, even as we recognise and acknowledge the contributions already made by some organisations.
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