Petroleum sector and Niger Delta region in a Post COVID-19 Nigeria
By Jerome-Mario Utomi
“Among the many frustrations in development, perhaps none looms larger than the ‘resource curse.’ Perversely, the worst development outcomes–measured in poverty, inequality, and deprivation–are often found in those countries with the greatest natural resource endowments. Rather than contributing to freedom, broadly shared growth, and social peace, rich deposits of oil and minerals have often brought tyranny, misery, and insecurity to these nations” –Terra Lawson-Remer, an economist, environmental attorney, community organizer, and educator, who served as Senior Advisor in the Obama administration developing environmental policies to cut pollution from oil drilling and mining.
Aside the above comment, two other big helping hands that formed this piece are; First, the July to August 2003 and July 2004 report by the Social and Economic Rights Action (SERAC)s fact-finding team to the Niger Delta which sought to: (1) ascertain the quality and structure of government’s intervention through the Niger Delta Development Commission (NDDC), Department of Petroleum Resources (DPR) and the Federal Ministry of Environment; (2) access the quality of life of the Niger Delta people; (3) ascertain how oil exploration has impacted agriculture and other means of livelihood; (4) assess how proceeds from oil has affected the quality of collective action, youth restiveness, and the quality of NGO intervention; and (5) gauge the NGO involvement in the process of empowering the people, in this present discourse says something else.
The second stems from the African Energy Chamber recent Calls on African Petroleum Producers Organization (APPO) Member Countries to take Action on Supporting Oil Sector and consider implementing its Commonsense Energy Agenda and Guidelines for the Movement and Safety of Oil Workers. Indeed, while the group believes that by taking swift action to allow the movement of oil workers and their safety, African countries can ensure that oil & gas operations continue safely and that the impact on exploration and production is minimized.
“Unless African countries engage with operators and investors and let them readjust their work programs, the only solution left for companies will be to declare force majeure or suspend any activity on their block,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.
Essentially, such argument shows that globally, the oil and gas industry like other businesses exist in a world of comparing and contrasting, a world of negotiations of boundaries and ideological frameworks largely managed through diverse means. The call supports also the position of business leaders that building resiliency in this period, organisations need to focus on building a resilient community amongst employees, customers, partners and suppliers. And to walk this fine line and ensure every decision made helps safeguard business continuity and survival, a people-driven approach is vitally important, and not just when it comes to staff and employees, but also customers and every other stakeholder.
What will Nigeria’s oil and gas sector make out of this new awareness? Particularly here in the country where the government has contributed to the problem of oil exploration and production by failing to monitor or regulate oil companies. The neglect is hardly surprising says a United Nation study, given the Nigerian government role in oil operation.
In explaining this failures, the World Bank pointed to the following problems; the conflict of interest for the Federal Government being both a partner and the regulatory body; no requirement for community participation in planning and development of oil activities; very limited ability of regulatory institutions to monitor pollution; low compensation rates for damages to property and lack of enforcement of environment regulations.
Sincerely in my views, the World Bank may not be alone in this position as the SERAC’s fact finding report also found that there was no evidence of good governance anywhere in the Niger Delta. Poverty has greatly intensified in Niger Delta communities.
Despite the inauguration of the elected civilian government, there had been no discernible positive change in the region’s physical, material, social, environmental and economic conditions. Quite to the contrary, there had been an escalation of social conflict and ruthless competition was rampant among constituent ethnic groups for domination centered on access to economic resources and opportunities. Many of the communities visited lacked basic social amenities such as portable drinking water, health care facilities, schools, roads and electricity.
On the operational standards of oil companies in the Niger Delta, the report stated that there was a difference in terms of proper intervention standards both for technical operations and social cooperation with the communities by oil companies in Nigeria in comparison to developed countries. With regards to social activism within the region, they felt most activists had failed to address the unintended social consequences of social activism in the Niger Delta.
The newsy aspect of this episode is that if the condition in the region during the fact finding was a challenge, the present situation is a crisis as nothing seems to have changed.
If President Muhammadu Buhari is desirous of developing policies, programmes and projects that will engineer prosperity in the oil and gas sectors, then, he should be ready to locate the strategic triangles that hold the key to success in the sector and the region. As success requires a careful analysis of the various kinds of knowledge needed to make innovation possible, the need to straddle the middle ground has become necessary in this period as the Coronavirus pandemic continues to influence how organisations operate and behave. This action is equally important in order to help the country maintain crude oil production in this critical moment of its existence
To understand in a little more details, akin to every problem-solving effort, which requires formulation of questions around the challenges in ways that facilitate discovery of solutions, the purpose of this piece is to among other things discover factors which impede achievements of goals and fuel failures within the sector; consolidate powerlessness and perpetuate poverty among the stakeholders (host communities); as well as establish if existing knowledge within the sector, (its technological provisions and manpower) sufficiently support the goals while suggesting ways Mr President and his team could change the narrative.
Normally, looking at both the operational templates of the sector and how the Up, Mid and the downstream players of the Petroleum industry has become reputed for non-compliance to set rules, it will not be a wrong assertion to conclude that the critical issues confronting the industry can be divided into the following; the existence of multiple but obsolete regulatory framework which characterizes the oil and gas exploration and production in Nigeria; Federal Government failure to get the nations’ refineries back to full refining capacity; the Petroleum Ministry’s inability to get committed to making International Oil Companies(IOC’s) adhere strictly to the international best practices as it relates to their operational environment; And finally, non-existence of clear responsibility/work details and action plans for agencies and parastatals functioning under the ministry.
As I leave Mr President to ponder on this fact, I must quickly add that, the Niger Deltans with critical interests, are not particularly happy that the present administration did not adhere strictly to the original amnesty document as proclaimed by the late President Yar’Adua.The programme was meant to stand on a tripod-disarmament and demobilization process; the second phase to capture rehabilitation which is the training processes, while third phase is the Strategic Implementation Action Plan.This last phase, they noted, was designed to massively develop the Niger Delta, but fortunately ignored by the Federal Government.
To change this narrative, the only step that will guarantee stability in the region is government’s ability to desist from the current non-participatory approach to development in the region, and embrace a broad-based consultative approach that will give the people of the Niger Delta some sense of ownership over their own issues. The template is already there; the Petroleum Industry Governance Bill (PIGB), passed by the outgone 9th Assembly. Signing, and holistic implementation of that bill will make Nigerians begin to see the problems of the Niger Delta as a national one and not restricted to the region.
Jerome-Mario Utomi ([email protected]), is a Lagos-based media consultant.
