Plans by the Federal Government to cede 10 per cent of its shares in the Nigerian National Petroleum Corporation (NNPC) joint ventures with oil companies to oil producing communities, especially in the Niger Delta, has raised the question about its relevance to the volatile region.

 The Special Adviser to the President on Petroleum Matters, Dr Emmanuel Egbogah, gave hints last week that the payment of the equity would commence in 2010, and had urged the Niger Delta subregion to halt the disruption of oil production to enable them benefit maximally from this gesture.

  Though the benefit from the equity would have to wait until the Petroleum Industry Bill (PIB) is passed into law by the National Assembly, The Tide gathered that under this arrangement, oil producing communities would be entitled to 10 per cent of profits made by oil companies involved in the joint venture with the federal government annually.

  Such profit would be disbursed to the communities by a body which would hold the funds in Trust for the communities. Going by the PIB, the communities to benefit from the profits include town and villages where oil facilities are found, town and villages which provide access to the passage of facilities that are used for the exploration of oil and gas, and communities where there are oil wells.A source in the presidency told newsmen that, “the profit on every barrel of oil produced can be calculated for the sake of determining the amount that accrues to the communities. Oil producing communities would get their shares of the profit based on what roles they played in facilitating the production of oil. If a particular community engages in militancy and disrupts production, such a community would lose a part of their equity for the period that the production process was disrupted. That is why it is in their interest to facilitate oil production after the bill is passed.”Under the provisions of the PIB, the Federal Government is actually to cede 19 per cent of its equity in the major oil companies. As 10 per cent of this figure will go to oil producing communities, the remaining 9 per cent shares will be taken to the stock market for shares purchase by Nigerians. The NNPC’s shares in the joint ventures include Royal Dutch Shell (55%), Agip (60%), Texaco (60%) Chevron (60%), ExxonMobil (60%) and TotalFinaElf (60%).Commenting on the 10 percent equity, an economist and former financial advisor to the former Head of State General Sani Abacha, Alhaji Abubakar Abdulkadir said that the Federal Government has to be cautious on taking that decision.