THE Amnesty programme may have begun to yield fruit as Nigeria’s oil production has reached a record 2.4 million barrels per day (mbpd), the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Mohammed Barkindo, said at the weekend.
Also, the Minister of Niger Delta Affairs, Chief Ufot Ekaette, has said that the Federal Government’s new agenda for the area would lead to lasting peace and development in the region.
But, worried by the non-profit returns in the Joint Venture Cash-call (JVC) investment between the government and the oil majors in the exploration of crude oil, the Federation Accounts Allocation and Fiscal Committee (FAAC), which superintends over federally generated revenue, has demanded explanations from the NNPC over the necessity for the continued participation.
And the Conference of Ethnic Nationalities of the Niger Delta (CEEND) has demanded that the Federal Government should give an explicit interpretation of the 10 per cent equity for oil host communities in the area.
The NNPC chief, who spoke at the weekend in Port Harcourt during a working visit to Rivers State Governor, Chibuike Amaechi, to solicit his support for the realisation of the corporation’s Gas Master Plan, said: “I am very pleased to report to you that for the first time in nearly three and half years, our crude oil production yesterday (Thursday) peaked at record 2.4 mbpd. You recalled when I was last here I did share with you our great concern on the rising idle capacity which I believe as at that time hit a record low of 1.7 mbpd as a result of the issue of insecurity.
Barkindo noted that as at last July, Nigeria’s oil production was down to almost 1.2 mbpd.
However, the country is making tremendous progress in the international gas market as the Soku Gas Plant has resumed operation after two years of inactivity, he remarked.
His words: “It is not only in crude oil production export but we are also beginning to see a rise in the volume of gas either for domestic or for export destinations. For the first time in two years, Soku Gas Plant is back. Soku is probably the biggest gas plant that we have in this country, which almost crippled the activities of the Nigeria Liquefied Natural Gas (NLNG) with some of its aspects lying idle for years.
“We have been able to significantly increase the volume of gas supply to the domestic market. By next month, we expect additional 1.0 billion cubic feet (bcf) in total for domestic gas particularly for power. However, we still have the challenges of transmitting this gas to the required power stations. So, at the moment, we have a significant amount of stranded gas particularly in the eastern part of the country but the blueprint for the infrastructure is being implemented in phases particularly the pipeline network that will link the East and the West and other parts of the country is at an advanced stages of implementation.”
Barkindo, who disclosed readiness to open the Omigbo Gas Plant, which was shut as a result of encroachment on the facility, said Nigeria lost about 9.0 million scalds that can give 300 megawatt of power.
Amaechi identified the relocation of the NNPC and oil companies to the Niger Delta as a veritable path to guaranteeing lasting peace in the region.
He contended that while the oil and gas belong to all Nigerians irrespective of location, the people who suffer the effect of exploration should also benefit from the value-added in the industry.
He said: “I am told that 60 per cent of exportable gas is produced from here. So, I welcome you to part of the struggle you are not aware of and that is that the NNPC must move to the Niger Delta because you cannot be drilling oil from here and your office is in Abuja. An example is that Ship House that was moved back to Lagos from Abuja. So, why don’t they want to move the oil industry back to Port Harcourt? The reason I said this is that the economy is here and as people continue to move to Lagos and Abuja, what is being done is that because we are a minority, our economy is moved to Lagos and Abuja. I don’t mind wherever within the region.
“What we saw that brought production level to 1.2 million was not a struggle. The criminals leveraged on the injustices visited on the Niger Delta people and they became heroes.”
He warned that if the injustice being visited on the Niger Delta does not stop, the struggle may take another dimension in no distant future.
He went on: “When the struggle will start it will be intellectual and when it is intellectual it then means that those that will be involved will be graduates; not all these elementary certificate holders representing Niger Delta. When it will begin, it will be more organised and we don’t want it to start at all. The President has outlined what he wants to do for us and the Niger Delta people are very happy. When our people were there they did not do anything and when somebody else is doing it, we have to appreciate it. After all, he is also a Nigerian. I think that one major thing we can do to help the President is to also help to get the oil companies to move back to Port Harcourt. You could see when the so-called ‘struggle’ was on, the occupancy rate of hotels was 35 to 40 per cent. Now, it is between 85 and 90 per cent. This shows that people are coming back on their own and for people to be coming on their own, peace has indeed returned.”
Ekaette, who spoke when he met with the executive members of the Oil Mineral Areas Producing Landlords Association of Nigeria (OMALAN) in his office in Abuja, pointed out that the development projects approved for implementation in the Niger Delta and the restructuring of the industry to give the petroleum-bearing communities a greater stake in their resources were aimed at empowering the people and transforming the region.
He said: “Mr. President has shown sincerity and commitment to transforming the Niger Delta region by first granting an unconditional amnesty to former militants and announcing measures to transform the region.
“To my mind, what remains is for the Niger Delta people to see this sincerity of the present Administration and support the implementation of the different projects and programmes to usher in a new lease of life in the Niger Delta.”
The minister stated that the 10 per cent equity for oil-bearing communities being proposed by the Federal Government would significantly impact on the lives of the people of the Niger Delta and give them a sense of belonging.
He said the details of the implementation of the new deal were being worked out and urged the association to join hands with the Government in finding solutions to the challenges in the region.
The minister assured the association that the Ministry would partner with it in implementing some of the programmes planned for the people of the region.
The Chairman of OMALAN’s Board of Trustees, Bishop Udo Azugo, pledged its support for the programmes that the Federal Government has designed for the Niger Delta through the Ministry.
Already, the sum of $4.295 billion has so far been invested in the JVC between January and October this year out of the budgeted $5.454 billion for the period. But only $1.277 billion has been realised from the venture during the period under review, thus prompting the concerns by FAAC on the benefit of the venture.
Under the JVC arrangement, the Federal Government every month is expected to pay $545 million as its counterpart funding for the 60 per cent equity in the venture while the oil majors in the accord funds the balance of 40 per cent. Crude exploited is also shared under the same formula.
But the FAAC, which met at the weekend to share the sum of N354.302 billion revenue generated last month to the three tiers of government in Nigeria, noted with concern that the JVC was no longer in the interest of the Federal Government and adopted that the NNPC should meet it for explanation on the venture.
The Minister of State for Finance, Mr. Remi Babalola, who is the Chairman of FAAC and a Commissioner representing the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Alhaji Yakubu Shehu, both confirmed the development to journalists at the end of the meeting in Abuja.
The Guardian observed from a document detailing investment and income profile in the JVC that in the last three months, revenue from the venture has been drastically below the amount invested, necessitating the Federal Government to borrow from other revenue sources to pay up the JVC obligation while nothing was remitted to the Federation Account.
Babalola said FAAC has again written the NNPC to furnish it with what was happening with the cash-call sum because states were worried that nothing was no longer coming into the Federation Account from the oil sector.
He said: “At FAAC today (Friday), members expressed concern over the $545 million monthly deductions by the NNPC for the JVC. In fact, some members want the accord stopped because it was realised that we were spending more than we were getting from the venture. But we have decided to give the NNPC opportunity to explain to us what really is happening, because we need to know. Again, we have asked them to let us know when they intend to pay up the withheld Federation Accounts Fund. We are hopeful that they will respond positively and pay up before the end of this year.”
The Accountant-General of the Federation, Mr. Ibrahim Dankwabo, reacting to the development, attributed it to the activities of militants in the Niger Delta region. He declared that the gains of the post-amnesty would only begin to manifest in the first quarter of next year.
Earlier, Babalola, while addressing the FAAC expressed optimism about Nigeria overcoming the current economic slowdown and up-scaling its growth potentials, going by developments in the economy.
He, however, advised the three tiers of government to adopt some strategic structural reforms to help them sustain economic recovery over the medium term and particularly protect those tiers that are most vulnerable.
He hinged his optimism on the surge in oil production, crude oil price rebound as well as the accommodative monetary policy of the monetary authorities.
The minister, in a paper titled: “Bridging the development gap,” said: “Bonny light price has increased 70 per cent, year-to-date closing at $79 per barrel. Our production level is improving and gradually approaching our Organisation of Petroleum Exporting Countries (OPEC) quota level. The major risk and binding constraint to our economic buoyancy in the short-run is the contraction of the credit squeeze.
“We therefore call on our money centre banks to resume prudent lending immediately as their pivotal role in bolstering the economy cannot be overemphasised. The automatic fiscal policy inherent in our budgetary system and discretionary fiscal stimulus from excess crude releases cannot replace financial intermediation.
“It is only lending activities to small and medium enterprises that can engender growth for the real sector in the long-run and not an unsustainable fiscal stimulant.”
In addressing the global economic slowdown through fiscal measures, the minister disclosed that the Federal Government had increased expenditures in the areas it considered fiscally sustainable during the trying times to ameliorate the situation.
He, however, explained that the adoption of structural reforms by all levels of government and combined with the government’s expansionary fiscal policies would help to protect some tiers of government that are most vulnerable.
He advised the tiers of government to take advantage of the huge opportunities provided by the economic meltdown to ensure that the next wave of growth is more inclusive to accommodate all Nigerians.
Babalola added: “Investment in infrastructure, institutions, the environment and basic health and education, combined with greater cooperation and integration, will help make that happen.
“I believe we can all rise to the challenge and build a stronger, stable, more equitable and more prosperous future, with opportunities to participate in and benefit from growth extending to all our citizens.”
Others at the FAAC meeting were the Director of Home Finance in the Federal Ministry of Finance, Mr. Lexy Omoha; commissioners for finance and accountants-general from the 36 states, and representatives of the Governors’ Forum and RMAFC.
Other members of the committee in attendance include representatives of the Debt Management Office and the revenue collection agencies such as the NNPC, Federal Inland Revenue Service, Nigeria Customs Service and Department of Petroleum Resources.
CEEND’s President, Prof. Kimse Okoko, said the demand was imperative because of government’s “inconsistencies and sometimes deliberate ambiguous laws” that might contain a clause which may even oust the 10 per cent equity share.
Okoko stated this at the end of CEEND’s meeting held at Omuku, Rivers State, on the post-amnesty situation and a recent pronouncement by the Presidential Adviser on Petroleum Matters, Dr. Emmanuel Egbogah, that government plans to allocate 10 per cent of its joint venture businesses to oil-producing communities in the Niger Delta.
Okoko said: “Ten per cent equity on what? Is it 10 per cent equity on the joint venture agreement? We want to know the 10 per cent equity share holding. When we know exactly the details, we will be in a better position to comment on the issue,” he said.
CEEND described as unfortunate the poor handling of the post-amnesty programme by the Federal Government, contrary to the recommendations of the Niger Delta Technical Committee and other stakeholders in the region.
Okoko said: “Unfortunately, the post-amnesty programme was not thought through. It is now they are grappling to determine what the projects are. This is what they should have done earlier before the amnesty was announced.
“They did not do anything; so they are now grappling with it. You can now see the restiveness of the youths who are now saying nothing is happening.”
The CEEND, which also deliberated on the issue of electoral reforms, called on the Federal Government to respect the wishes of Nigerians by implementing in the full the recommendations of Justice Uwais committee’s report.
Okoko declared that the ethnic nationalities in the Niger Delta want a truly people’s constitution to replace that of 1999 that is currently being used, which he described as a fraudulent document imposed on the country by a clique of military officers.
He added: “We have said consistently that the ultimate objective of the people of the Niger Delta is that the Nigerian federation must be restructured along the lines of true federalism where the component units own and control their resources.
“Until we convene a sovereign national conference of all ethnic nationalities of the nation to determine what type of federation we want to form, we will continue to object to the continued use of the 1999 Constitution.”
Meanwhile, the Movement for the Emancipation of the Niger Delta (MEND) has confirmed that a formal first meeting was held between President Umaru Musa Yar’Adua and its Aaron Team on Saturday in Abuja.
MEND, in a statement by its spokesman, Jomo Gbomo, at the weekend, said: “The parley, which lasted for over two hours, was frank, cordial and useful. This meeting heralds the beginning of serious, meaningful dialogue between MEND and the Nigerian government to deal with and resolve root issues that have long been swept under the carpet.
“Present for the Aaron Team were Vice Admiral Mike Okhai Akhigbe (rtd), Maj.-Gen. Luke Kakadu Aprezi (rtd), Prof. Wole Soyinka and Mr. Amagbe Denzel Kentebe.
“Mr. Farah Dagogo, the former MEND Overall Field Commander and Mr. Henry Okah attended as observers. Another member of the Aaron Team, Prof. Sabella Abbide, could not make it due to flight connection problems from his United States base.
“We use this opportunity to thank the Aaron Team for their sacrifice in offering their time and the donors who sponsored their travel expenses but wish to remain anonymous.”
Relatedly, the Federal Government has been warned against poor funding of the amnesty programme for former militants.
The National Chairman of the Progressive Peoples Alliance (PPA), Lawrence Esin, who gave the warning, said that poor funding would endanger the initiative to restore peace in the region.
Speaking against the backdrop of the abandonment of camp by the former militants in Ondo State on the grounds of non-payment of their allowances and the eviction of their colleagues in Edo State, leading to their roaming the streets, Esin stated that on no account should the gains already recorded on the amnesty be lost to inadequate monetary provision for the implementation of the programme.
“Such is the peace that we now have in the region that reports of oil installations or pipelines being blown up today or people (especially expatriates) being kidnapped tomorrow have abated,” the PPA boss noted in a statement.