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Implementation Of Committee Report On Niger Delta: Myth Or Reality?

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Being a paper presented by Barrister Ledum Mitee, MOSOP President & Chair of the Defunct Technical Committee on the Niger Delta, at the Port Harcourt International Oil and Gas Conference, last week.

The Technical Committee and its Work

The Niger Delta Technical Committee was inaugurated at a period of hightened tension exacerbated by the frustrations and burning sense of injustice that is pervading the region which found extreme expression in attacks on oil installations, kidnapping and assassinations, the nation was at its tenterhooks.

Against the backdrop of a rich history of disturbing economic shortfalls and broken promises intertwined with devastating environmental damage and conflict, there were hightened expectations of the people as many saw the Committee as the last bus stop in the realisation of the resolutions of the problems of the region. Many, however, viewed the work of the Committee with great skepticism not because of doubts on the ability of the Committee to accomplish its assigned task creditably but whether the report of the Committee will not join its predecessors on the shelf?

Perhaps to reassure Nigerians, President Goodluck Jonathan, then as Vice President, in his inaugural address in urging members to make “suggestions for Government’s necessary and urgent action”, went on to declare:” On behalf of the Government, I want to assure you that your recommendations will  not be treated with levity.” In receiving the Report of the Committee on the 1st of December, 2008, the late President Yar ‘ Adua similarly assured that government would study the report urgently and implement those aspects that it believes would lead to the permanent resolution of the problems of the Niger Delta region.

These were the circumstances that the Committee set down to work, albeit under considerable challenging circumstances, but with full realisation of the expectations of the nation and the international community.

Some Key Recommendations

In making the recommendations, the Committee proceeded from the premise that whilst the problems of the Niger Delta may be homogenous and exhibit a certain measure of similarity, suggesting the same origin, the region is far from homogenous. Thus, while some of the recommendations are generally applicable, others are targetted at unique challenges of states and communities that constitute the region. The Committee also recognised that the importance of the region to the country makes the solution to its problems a national issue with international implications, and as such, its solutions ought to be addressed as a matter of national interest.

Furthermore, The Committee noted that past and so far existing efforts to redress the Niger Delta crisis have suffered from want of political will. This has resulted in complete lack of trust necessitating that any genuine attempt at redressing the problem has to be dramatic and seen to be sustained and well resourced.

For these reasons, it is suggested that its key recommendations must not only be implemented but so implemented as a package and not in isolation. The Committee therefore boxed certain recommendations into a Compact with stakeholders that will commit to support critical short-term changes that are necessary for stemming the decline of the region into  blown conflict zone. The short term Compact which seeks to deliver on visible, measurable outputs which should produce material gains within an 18 month period was to be guided by the principle that the three tiers of government and other stakeholders report on progress in implementation every three months.

The key recommendations include:

Funding Infrastructural Development

The Committee recommended the establishment of a Special Niger Delta (Infrastructural) Intervention Fund for the needed urgent massive infrastructural intervention in the region. The Fund should receive contributions from oil companies, Federal and state governments through the Excess crude Account, Foreign Exchange Reserve as well .as international· donor Agencies, international  . pledges and grants and private sector sources.

Communities Stakes in Oil Activities

In order to facilitate a situation where communities will and voluntarily protect the assets and operations of oil companies, it was recommended that a framework that allows them to share in the wealth available to each community has to be established. The establishment of community Trust Funds will pool together resources from compensations, royalties, rents and entitlements directly accruing from relations with oil and gas companies. There is thus the need to institutionalise by law, a Community Trust Fund scheme for oil-producing communities which will allow registered community associations and local groups the opportunity to participate in deciding how the funds are used.

Similarly, it was recommended that power and water supplies from the oil flow stations should be extended to communities within 15 kilometres radius of such stations to ensure that the communities have requisite stakes in the continued operation of such flow stations.

Perhaps it is relevant to add here that the current Petroleum Reform Bill provides an excellent opportunity to work out a framework for taking on board the Committee’s recommendation on the payment of compensation and rentals to oil bearing land owners at full economic rates and for oil operators to pay royalties into the community Trust Funds of not less than $2 per barrel.

It was similarly recommended that by last year, 2010, appropriate regulations should be established to compel oil companies to have insurance bonds against environmental pollution, strengthen independent regulation of oil pollution and work towards an effective EIA mechanism. It was also recommended that enforcement of critical environmental laws be made a national priority whilst fraudulent environmental cleanups be exposed and prosecuted and gas flaring should cease by December 3151 2008.

Increased Revenue

Increase allocation accruing from oil and gas revenues to the Niger Delta states to 25% within a framework in which the additional funds are dedicated largely to new infrastructure and sustainable development of the region.

Infrastructure

It was recommended, amongst others, that the East-West Road dualisation from Calabar to Lagos with at least one link road per state to the coastline should be fast-tracked to ensure completion by 2010 as well as the commencement of both a coastal road and railway from Calabar to Lagos.

Also recommended was that the federal government should provide immediate funding for full takeoff of the Federal University of Petroleum Resources in Effurun, Delta State and that PTDF be refocused and re-directed to provide scholarship at all levels to make at least 50% of its beneficiaries to be persons from the Niger Delta.

Disarmament, Demobilisation and Reintegration (DDR)

The Committee recommended a DDR process that should begin with some confidence building measures on all sides which include ceasefire on all sides, pull back of troops, credible conditions for amnesty and the setting up of a DDR Commission. It is worthy to note that whilst the amnesty proposed by the Committee was a component of an entire DDR process, the current amnesty programme appears to be a stand-alone concept with no attempt to address the root causes of the problems that bred armed militancy in the first place.

Since the announcement of the amnesty for Militants, there has been some felt concern which stems from the fact that in so far as the amnesty focused almost exclusively on militancy without any pretence to reflect on the underlying concerns of the people of the region, it certainly would not bring about the desired sustainable peace in the Niger Delta. In so far as the policy would appear to be merely designed to appease militant agitations, it was like giving paracetamol to a clinically ill patient. The policy which is supposedly backed by a nasty budget, which is doubtful if it reflects on the militants themselves, appears not to be well thought out as there were no consultations with critical stakeholders and there was no definite and sustainable post disarmament plans. More importantly, it does appear that it makes the false assumption that ‘success’ of disarmament of a section of armed miltants without any serious efforts at addressing the injustices afflicting the region would by itself  translate to peace or the end of militant agitation in the Niger Delta.

There is the crying need therefore to re-appraise the current amnesty offer to a credible negotiated Disarmament, Decommissioning and Reintegration (DDR) programme. There is the need therefore to structure a process that mops up the still available large amounts of small arms and ammunition and put them or most of them beyond the reach of militants and would-be militants. The process would have to be designed to ensure that where disarmament terminates, demobilisation begins and where demobilisation ends, reintegration commences.

Again, it need be noted that in the committee’s view, although there are international best practices on the key elements of implementation of DDR, the natural starting point should be the setting up of a DDR National Commission or Implementation Committee which should draw membership from amongst others, religious leaders, the civil society, government, ideally a UN observer or technical expert for the international community’s buy-in etc. It would be important that the composition should be such as to captures the confidence of the critical stakeholders.

Youth Employment

As international best practices suggest that it might be counter productive to target any empowerment programme for only the ex-militants in order not to give the impression that only bad behaviours can attract reward, the Technical Committee recommended the establishment of a direct labour Youth Employment Scheme (YES) in conjunction with the States and Local Governments that will employ at least 2,000 youths in community work in each of the local Governments in the Niger delta.

Security Reform

It also need be emphasised that any sustainable peace process in the Niger Delta must take into consideration the Committee’s recommendation to:

Improve the operational integrity of security forces in the region to a level that assures communities and business organisations of safety without harassment and disruption. This will involve definite steps to eliminate all forms of abuses by security forces and institute proper programmes or reorientation, demilitarisation, retraining and accountability of all security operatives.

Concluding Remarks

In the light of the foregoing, it does not require rocket science or the special expertise of someone who served on the Committee to decipher how far the recommendations of the Committee have been implemented or not. Whilst we must acknowledge the fact that the implementation of the amnesty programme have greatly reduced the hostilities in the region, to the extent that oil production has increased by over 100% over the figures of the pre-amnesty era, but the fact that the increased revenue from oil has not reflected in improved livelihoods or facilities available to the oil bearing communities of the region should be of worrying concern.

As members of the Technical Committee stressed at a one- day meeting convened on November 5th 2010, to consider the implementation of the Report, “a selective and ad-hoc implementation of the recommendations undermines the sense in which the Technical Committee on the Niger Delta and indeed the Region envisaged the pursuit of their peace, development, security and stability.”

Ledum Mitee

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Oil & Energy

Tight Now, Loose Later: Oil Futures Flash Warning

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Last week, OPEC+ announced it will once again accelerate the pace of unwinding of production cuts, with output targets for June increasing by 411,000  barrels per day, equivalent to three monthly increments.
This follows a similar move in April, with the organization appearing willing to stay the course amid low oil prices and fears of weakening demand.
We reported that global crude inventories remain low enough, thus giving OPEC+ a window to scale back its voluntary cuts until the market surplus finally arrives.
Saudi Arabia appears intent on “punishing” OPEC+ rascals such as Kazakhstan and Iran for repeatedly violating their quotas.
Commodity analysts at Standard Chartered have reported that the latest OPEC survey of secondary sources reveals that Kazakhstan’s crude oil output clocked in at 1.852 mb/d in March, 384 kb/d above its OPEC+ quota.
Further, the country also failed to keep its promise to cut 38 kb/d in compensation for overproduction in March, bringing its total overproduction to 422 kb/d.
The same scenario is expected to unfold in the coming months. Kazakhstan produced 240 kb/d more y/y in March, a sharp contrast from the other eight OPEC+ members who produced a combined 612 kb/d less.
And now, the oil futures markets are sending a dire warning that oil bulls could find themselves in trouble quite soon due to a combination of the OPEC+ output hike and Trump’s tariffs.
Oil futures curve has formed a rare “smile” shape, a structure Morgan Stanley says was last seen briefly in February 2020 just before the infamous oil price crash.
On Wednesday, Brent futures’ July contract was trading at a premium of 74 cents to the October contract, a market structure known as backwardation, foreshadowing immediate tight supply.
However, prompt prices from November have formed a contango, with forward prices flipping to a discount, indicating oversupply as traders predict Trump’s tariffs will eventually weaken oil demand. Having backwardation and contango together leads to the rare “smile” shaped curve.
According to the latest available data by the International Energy Agency (IEA), global oil inventories stood at 7.647 billion barrels in February, down from 7.709 billion barrels for last year’s corresponding period and close to the bottom of their historical five-year range.
Meanwhile, refiners’ appetite for crude is climbing ahead of the peak driving season in July and August, “Refinery maintenance in the Atlantic basin will start to taper off, increasing oil demand (for refining)… Summer driving should provide some support,” BNP Paribas analyst told Reuters.
Global oil demand is expected to rise by 1.3 million barrels per day in the third quarter of the current year, up from an average of 104.51 million bpd in the second quarter, the IEA has predicted.
The 1 million bpd output increases announced by OPEC+ so far, coupled with another 400 kb/d increase in July, almost matches the predicted demand increase, implying oil markets will not face a surplus till late in the year.
Meanwhile, oil prices jumped in Thursday’s session after the Trump administration announced it has struck a trade deal with the UK. Brent crude for July delivery was up 2.7% to trade at $62.75/bbl at 12.50 pm ET while WTI crude contract for June delivery added 3.0% to change hands at $59.86 per barrel. However, terms of the deal appear to fall well short of the “comprehensive” package Trump earlier touted.
According to Trump, UK Prime Minister, Keir Starmer, will further reduce non-tariff barriers and fast-track U.S. goods into his country.
Meanwhile, another solid week of jobless claims underscored the Federal Reserve’s ongoing unwillingness to cut rates. U.S. jobless claims fell 13,000 to 228,000 for the period ending on May 3.
Continued claims, however, clocked in at just over 1.9 million, near the highest levels since 2021, suggesting workers are still finding it difficult to secure new jobs as the economy stalls.
That said, commodity analysts at Standard Chartered have predicted that path of least resistance for oil prices is lower in the coming months, with oil prices to remain low before beginning a gradual recovery later in the year as U.S. oil output declines.
StanChart, however, says there’s some technical support in the short-term, with fundamentals remaining fairly positive. Recently,  StanChart cut its 2025 oil price forecast to $61/bbl from $76 and also lowered its 2026 forecast to USD 78/bbl from $85 citing Trump’s tariffs.

By: Alex Kimani

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ExxonMobil Earmarks $1.5b For Nigeria’s Deepwater Oil Fields

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In a move to reinforce confidence in the nation’s upstream potential, ExxonMobil has affirmed its long-term commitment to the oil and gas sector with a planned $1.5 billion investment in deepwater exploration and development projects.
Country Managing Director, Shane Harris, disclosed this during a courtesy visit  to the Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe.
A statement on the NUPRC’s website  revealed that the investment, planned to be executed between Q2 2025 and 2027, would focus primarily on revitalizing production at the Usan deepwater oil field.
The oil major hinted that a Final Investment Decision (FID) is expected in late Q3 2025, pending the final approval of the Field Development Plan (FDP), along with internal and partner funding approvals.
In addition to the Usan field, ExxonMobil also revealed intentions to accelerate development activities in other key deepwater assets, including the Owowo and Erha fields.
These developments are part of a broader strategy to strengthen its operational footprint in Nigeria and support the country’s drive for increased production.
Speaking during the visit, Harris stated that the planned capital expenditure underscored ExxonMobil’s belief in the long-term viability of Nigeria’s upstream sector and its strategic importance in the global energy landscape.
Harris, who  expressed ExxonMobil’s support for NUPRC’s “Project 1 Million Barrels” initiative, which aims to boost Nigeria’s crude oil production capacity to 2.4 million barrels per day in the medium term, stressed the need for strategic collaboration between operators and regulators in achieving this ambitious target.
He further pledged to use the platform to foster stronger collaboration between industry players and the NUPRC with a focus on addressing regulatory challenges and unlocking further investment opportunities in the sector.
Responding to the development, the NUPRC boss, Engr. Gbenga Komolafe, welcomed the announcement, describing ExxonMobil’s renewed commitment as timely and crucial for Nigeria’s upstream growth.

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Minister Tasks NNPCL On Oil Output Increase By Year End

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Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has called on the Nigerian National Petroleum Company Limited (NNPCL) to boost oil production significantly by the end of 2025.
Lokpobiri made the call during an interview with Energy Editors at the  Africa Energy Forum (AEF) in Houston, Texas, United States.
Emphasizing the need for accelerated growth in the nation’s oil output, Lokpobiri said he had increased oil production target from President Bola Tinubu’s initial goal of 2 million barrels per day (bpd) to 2.5 million bpd.
According to a statement, “The Federal Government on Wednesday directed the management of the Nigerian National Petroleum Company Ltd. (NNPCL) to increase oil production beyond current levels by the end of the year.
“Although President Bola Tinubu had initially tasked the NNPCL with ramping up production to 2 million barrels per day (bpd) but later increased the target to 2.5 million bpd”.
He insisted that the new target is achievable, noting that the nation had previously reached that level during the COVID-19 pandemic, despite low investment.
Lokpobiri explained that the “Drill or Drop” policy under the Petroleum Industry Act (PIA) required new drilling to replenish reserves for every oil extraction, using underground surveys.
He urged global investors to take advantage of Nigeria’s improved regulatory environment and competitive fiscal terms, describing the country as a top destination for energy investment.

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