Government to Transfer 10% of Oil Ventures to Niger Delta Residents

[maxsiollun]

http://www.ft.com/cms/s/0/6e85dd6a-b...44feab49a.html

Nigeria offers ‘revolutionary’ delta deal

By Tom Burgis in Port Harcourt

Published: October 18 2009 18:14 | Last updated: October 18 2009 23:37

Nigeria plans to transfer 10 per cent of all its oil and gas ventures to the inhabitants of the oil-producing Niger Delta, in an attempt to end a rebellion that has hampered production in sub-Saharan Africa’s leading energy supplier.

The initiative, which comes against the backdrop of a sweeping attempt to overhaul Nigeria’s oil industry would, if approved, by parliament signal a bold new phase in government efforts to broker a lasting settlement in the delta. But first it has to overcome the anticipated objections of representatives of other regions.


The latest overture follows an amnesty that has lured into the open some of the main leaders of the militants who have led a sustained campaign in the delta region against the federal government and the oil industry.

Emmanuel Egbogah, the president’s special adviser on oil, told the Financial Times that Umaru Yar’Adua, president, has backed the idea of transfering to delta communities 10 per cent stakes from the holdings of the national oil company in the joint ventures that exploit Nigeria’s vast reserves,

Mr Egbogah said he intended to add the proposal to reforms that the government hopes to enact by the end of the year, which would also impose tougher terms on oil companies but which are currently embroiled in a tortuous debate in parliament.

A Chinese offer for up to a sixth of the country’s reserves – including stakes in some blocks operated by Royal Dutch Shell, ExxonMobil and Chevron – has raised the stakes still further.

The plan for the delta was “a serious one, a major one, something quite revolutionary”, Mr Egbogah contended.

The initiative is aimed at answering a longstanding demand from the delta’s fighters and activists, ethnic leaders and aggrieved communities for a share in the ownership of the oil that generates 80 per cent of government revenue.

All citizens of oil-bearing communities would be entitled to cash benefits, delivered through a trust-style mechanism, which they could use individually or pool for social projects. It was unclear how the government would apportion the stakes and avert competition between different communities for a larger slice of them.

The rest of Africa’s most populous nation could face reduced income as a result but potentially this would be offset by higher output, if the initiative led to a reduction in sabotage of the oil industry.

Mr Egbogah said the 10 per cent stakes would pay dividends on revenues after taxes and costs to communities, bypassing powerful governors of the eight oil-producing states who were instead calling for an increase in the extra share of petroleum revenues they already receive. The stakes could not be resold.

The government hopes to provide a disincentive to oil-theft and sabotage by linking the earnings of each qualifying community to production from the joint venture that extracts its resources.

“These benefits will flow directly to them,” Mr Egbogah said. “Every community, whether blind or deaf or dumb, every citizen will say: ‘I own a part of this business.’ ”

Attacks on oil facilities have cut production in Nigeria, an important supplier to the US, by as much as 40 per cent in recent years. A multibillion dollar trade in stolen oil has flourished while the majority of the delta’s estimated 28m people live amid despoiled waterways often lacking basic services.

The misery persists in spite of the oil-state governments receiving an additional 13 per cent of national petroleum revenues, making their budgets two or three times the size of those in some other regions.

Mr Egbogah said the plan would cover “all petroleum assets in the country” but added that “obviously there are no oil-producing communities in the offshore”, which is home to major deepwater fields.

Seven onshore joint ventures between the state-owned Nigerian National Petroleum Corporation and foreign oil groups in the delta account for 70 per cent of Nigeria’s production. The NNPC holds between 55 per cent and 60 per cent in each.

Officials believe the community stakes could see well over Naira50bn ($338m €227m, £207m) diverted to the communities in its first year.

Shell said its joint venture, which produced 17 per cent of Nigeria’s output last year, has contributed $34bn (€23bn, £21bn) to the government in the past four years. The Anglo-Dutch group said the government received 95 per cent of all onshore revenue after costs.

[IZONERE]

Ha!!!!!!

Na soo? Are they really going to do this? Hmm....make we dey look. If na so, everybody go claim say dem from Niger Delta now.

[busanga]

A step in the right direction. It is not enough but it is the first concrete step towards appeasing the Niger Delta. I hope it is true.

[Son of the Delta]

Originally Posted by maxsiollun

http://www.ft.com/cms/s/0/6e85dd6a-b...44feab49a.html

Nigeria offers ‘revolutionary’ delta deal

By Tom Burgis in Port Harcourt

Published: October 18 2009 18:14 | Last updated: October 18 2009 23:37

Nigeria plans to transfer 10 per cent of all its oil and gas ventures to the inhabitants of the oil-producing Niger Delta, in an attempt to end a rebellion that has hampered production in sub-Saharan Africa’s leading energy supplier.

The initiative, which comes against the backdrop of a sweeping attempt to overhaul Nigeria’s oil industry would, if approved, by parliament signal a bold new phase in government efforts to broker a lasting settlement in the delta. But first it has to overcome the anticipated objections of representatives of other regions.


The latest overture follows an amnesty that has lured into the open some of the main leaders of the militants who have led a sustained campaign in the delta region against the federal government and the oil industry.

Emmanuel Egbogah, the president’s special adviser on oil, told the Financial Times that Umaru Yar’Adua, president, has backed the idea of transfering to delta communities 10 per cent stakes from the holdings of the national oil company in the joint ventures that exploit Nigeria’s vast reserves,

Mr Egbogah said he intended to add the proposal to reforms that the government hopes to enact by the end of the year, which would also impose tougher terms on oil companies but which are currently embroiled in a tortuous debate in parliament.

A Chinese offer for up to a sixth of the country’s reserves – including stakes in some blocks operated by Royal Dutch Shell, ExxonMobil and Chevron – has raised the stakes still further.

The plan for the delta was “a serious one, a major one, something quite revolutionary”, Mr Egbogah contended.

The initiative is aimed at answering a longstanding demand from the delta’s fighters and activists, ethnic leaders and aggrieved communities for a share in the ownership of the oil that generates 80 per cent of government revenue.

All citizens of oil-bearing communities would be entitled to cash benefits, delivered through a trust-style mechanism, which they could use individually or pool for social projects. It was unclear how the government would apportion the stakes and avert competition between different communities for a larger slice of them.

The rest of Africa’s most populous nation could face reduced income as a result but potentially this would be offset by higher output, if the initiative led to a reduction in sabotage of the oil industry.

Mr Egbogah said the 10 per cent stakes would pay dividends on revenues after taxes and costs to communities, bypassing powerful governors of the eight oil-producing states who were instead calling for an increase in the extra share of petroleum revenues they already receive. The stakes could not be resold.

The government hopes to provide a disincentive to oil-theft and sabotage by linking the earnings of each qualifying community to production from the joint venture that extracts its resources.

“These benefits will flow directly to them,” Mr Egbogah said. “Every community, whether blind or deaf or dumb, every citizen will say: ‘I own a part of this business.’ ”

Attacks on oil facilities have cut production in Nigeria, an important supplier to the US, by as much as 40 per cent in recent years. A multibillion dollar trade in stolen oil has flourished while the majority of the delta’s estimated 28m people live amid despoiled waterways often lacking basic services.

The misery persists in spite of the oil-state governments receiving an additional 13 per cent of national petroleum revenues, making their budgets two or three times the size of those in some other regions.

Mr Egbogah said the plan would cover “all petroleum assets in the country” but added that “obviously there are no oil-producing communities in the offshore”, which is home to major deepwater fields.

Seven onshore joint ventures between the state-owned Nigerian National Petroleum Corporation and foreign oil groups in the delta account for 70 per cent of Nigeria’s production. The NNPC holds between 55 per cent and 60 per cent in each.

Officials believe the community stakes could see well over Naira50bn ($338m €227m, £207m) diverted to the communities in its first year.

Shell said its joint venture, which produced 17 per cent of Nigeria’s output last year, has contributed $34bn (€23bn, £21bn) to the government in the past four years. The Anglo-Dutch group said the government received 95 per cent of all onshore revenue after costs.

These officials must really have difficulty making simple calculations!
With an estimated production of 2 million barrelsa day.10 percent stake will translate to 200,000 barrels perday.If 200,000 barrels is sold at a discount rate of $50per barrel.200,000 barrels a day wiill give the communities about $10 million a day.With the figures some of his officials are releasing the people are getting just 1 months pay!

I must also state in very clear terms that 10 percent is nothing to write home about!
It is a very far cry from what the communities deserve!

If oil blocs/wells are allocated to our traditional rulers the way it is being allocated to those from the North and South West.

200,000 barrels would not be enough for traditional rulers in Rivers state alone!

Yar`Adua and co should be just if not they should be waiting for more weeping and wailing.We the people of the Niger Delta have endured for long.


To claim that $950 million was set aside for projects in the Niger Delta is also very false.Many of these roads are critical for the whole country!A road leading to Lagos should not be part of the stimulus for the Niger Delta.Any project that is done outside the region with funds meant for the region amounts to fraud.

[Obugi]

SoD,

Originally Posted by Son of the Delta

These officials must really have difficulty making simple calculations!

I think 10% is big enough for the half hearted show put on by MEND.

If you want more you'll have to fight for it.

We Nigerians love oil money too.

The only calculus that matters - The Nigerian Army is bigger than yours!

!Get Yours!
Obugi.

[Son of the Delta]

Originally Posted by Obugi

SoD,



I think 10% is big enough for the half hearted show put on by MEND.

If you want more you'll have to fight for it.

We Nigerians love oil money too.

The only calculus that matters - The Nigerian Army is bigger than yours!

!Get Yours!
Obugi.

Are you talking about the Nigerien Army or the Nigerian Army?
The reason why anmesty was accepted was to prove a point that the people of the Niger Delta can give peace a chance.

Nigeria`s army is a mere rag tag that can only enage in barbaric acts like rape and looting.
They are a bunch of cowards and the young men in the Niger Delta have proved that on several occasions.

[Obugi]

SoD,

Originally Posted by Son of the Delta

Are you talking about the Nigerien Army or the Nigerian Army?
The reason why anmesty was accepted was to prove a point that the people of the Niger Delta can give peace a chance.

I'm talking of the Nigerian Army. Yes, the one with the motto that Victory Comes From God Alone or some such. Can you beat God?

Until MEND gets serious about fighting, oil producing areas are getting NOTHING. My recommendation to still stands: show up at the National Assembly and Aso Rock and start shooting. Its very easy, or at least start with Goodluck Jonathan or some of your governors.

I wish you guys the best, I sincerely do, but we don't do negotiated settlements.

!Get Yours!
Obugi.

[Son of the Delta]

Originally Posted by Obugi

SoD,



I'm talking of the Nigerian Army. Yes, the one with the motto that Victory Comes From God Alone or some such. Can you beat God?

Until MEND gets serious about fighting, oil producing areas are getting NOTHING. My recommendation to still stands: show up at the National Assembly and Aso Rock and start shooting. Its very easy, or at least start with Goodluck Jonathan or some of your governors.

I wish you guys the best, I sincerely do, but we don't do negotiated settlements.

!Get Yours!
Obugi.

I am sure you know that during ww2 both sides claimed that God was on their side.

Just as it turned out that God was not on the side of Hitler and his allies people would see the result in the case of Nigeria.


The bible says that evil would slay the wicked.
Just as apartheid South Africa and Nazi Germany were slain so also will Genocide Nigeria be slain.

Justice always overcomes injustice.

[Bunch17]

A tenner to say it won't happen. Any takers?

[busanga]

Originally Posted by Son of the Delta

These officials must really have difficulty making simple calculations!
With an estimated production of 2 million barrelsa day.10 percent stake will translate to 200,000 barrels perday.If 200,000 barrels is sold at a discount rate of $50per barrel.200,000 barrels a day wiill give the communities about $10 million a day.With the figures some of his officials are releasing the people are getting just 1 months pay!

Dude, it looks like you are the one having calculation problems. What goes to the community is profit not revenue to start with. You must first back out the cost of developing the oil fields, and then apply your discount. Moreover, only 40-50% of current oil production comes from onshore properties..and that number will continue to regress, as oil companies seek more oil in the deepwaters, and the onshore fields mature.

I must also state in very clear terms that 10 percent is nothing to write home about!
It is a very far cry from what the communities deserve!

If oil blocs/wells are allocated to our traditional rulers the way it is being allocated to those from the North and South West.

200,000 barrels would not be enough for traditional rulers in Rivers state alone!

Yar`Adua and co should be just if not they should be waiting for more weeping and wailing.We the people of the Niger Delta have endured for long

.

Of course, even 100% won't be enough. But is it feasible? I think it is a good starting point. The minimum 13% still goes to the state, with 10% flowing to the communities i.e. to every man or woman of all oil producing communities, and another 3-5% flowing through the federal & corporate contribution to NDDC. This will bring 30% of oil funds to where the oil comes from..I think that is a sustainable template for development. You think not?

To claim that $950 million was set aside for projects in the Niger Delta is also very false.Many of these roads are critical for the whole country!A road leading to Lagos should not be part of the stimulus for the Niger Delta.Any project that is done outside the region with funds meant for the region amounts to fraud.

Dude, your claim is laughable. Building a road that connect Niger Delta with the economic nerve center of Nigeria i.e. Lagos is not stimulus for ND? Are you serious or you are smoking gbana? I think your claim is just blind sloganeering. I think the best strategy to achieve the ND goals for the struggle is to interlink the fate of the Niger Delta and her people with those of their immediate neighbors ; an antagonistic stance that you promote is not the best and thank God cooler heads are prevailing. It is smart politics.

[Dapxin]

Originally Posted by Bunch17

A tenner to say it won't happen. Any takers?

A hundreder(sp!) to say it was a reBranded joke wrapped in gold for starts ?

[RAYNOSA]

Re: Government to Transfer 10% of Oil Ventures to Niger Delta Residents......You mean residents such as Governors,Senators,House of Assembly members,Local government chairmen,Ministers,VeePee and Millitiants.

Please don't forget our brothers on the internet.......SOD take note...

[Son of the Delta]

Originally Posted by busanga

Dude, it looks like you are the one having calculation problems. What goes to the community is profit not revenue to start with. You must first back out the cost of developing the oil fields, and then apply your discount. Moreover, only 40-50% of current oil production comes from onshore properties..and that number will continue to regress, as oil companies seek more oil in the deepwaters, and the onshore fields mature.

You have just further proved that you are an hypocrite!
If it is a percentage of the profit as you claimed would it be a crime to pay the communities for the more than 50 years their lands have been exploited?

Onshore or offshore makes no difference the oil belongs to the people of the Niger Delta.We suffer the consequences of both offshore and onshore oil production.

You just displayed your high level of ignorance!Can you tell us how much profit NNPC made last year?

Can you tell us if the money been shared by the the three tiers of government in Nigeria is oil "revenue" or "profit"?


.

Originally Posted by busanga

Of course, even 100% won't be enough. But is it feasible? I think it is a good starting point. The minimum 13% still goes to the state, with 10% flowing to the communities i.e. to every man or woman of all oil producing communities, and another 3-5% flowing through the federal & corporate contribution to NDDC. This will bring 30% of oil funds to where the oil comes from..I think that is a sustainable template for development. You think not?

Dont call it 10 percent that figure is very far from 10 percent!We in the Niger Delta are educated enough to know that and even if it is 10 percent it is totally unacceptable.I will rater burst pipelines than take 10 percent.What will 10percent do for our damaged farmlands and waterways?

The NDDC firgures you are churning out are also very false!Remember your central government is still indebtedto the NDDC to the tune of nearly 400billion!

Originally Posted by busanga

Dude, your claim is laughable. Building a road that connect Niger Delta with the economic nerve center of Nigeria i.e. Lagos is not stimulus for ND? Are you serious or you are smoking gbana? I think your claim is just blind sloganeering. I think the best strategy to achieve the ND goals for the struggle is to interlink the fate of the Niger Delta and her people with those of their immediate neighbors ; an antagonistic stance that you promote is not the best and thank God cooler heads are prevailing. It is smart politics.

You are the one on gbana or whatever you call it.I do not in any way oppose the building that road but it will be false to mention it as a Niger Delta project.
"Lagos economic nerve center"! Dont make me laugh! What makes you feel Lagos is important?Lagos is nothing as far as Nigeria is concerned.

The people of the Niger Delta have never been antagonistic even tough their immiediate neigbhours were sometimes antagonistic towards them.

We could have as well given Ota the Odi treatment but we are not like some of you.It would take much strength to bring Lagos down but the people of the Niger Delta have tried as much as they can to maintain cordial relationship with everyone in Nigeria.The choice is Nigeria`s there is no time for politics again.50 years of "smart politics" with the hausa-fulani-yoruba oligarchy is enough.It is time for theoligarchs to make a concrete decision.Either they make serious concessions or they should be prepared to miss all of their priviledges.

[Son of the Delta]

Originally Posted by RAYNOSA

Re: Government to Transfer 10% of Oil Ventures to Niger Delta Residents......You mean residents such as Governors,Senators,House of Assembly members,Local government chairmen,Ministers,VeePee and Millitiants.

Please don't forget our brothers on the internet.......SOD take note...

Those who so will reap!.............trust me! ....................

[CIkpatt]

10% ownership is a fair start, but 15% ownership is a perfect start. Then, percentage ownership should increment every set period of time unto 100% in no more than a quarter century.

There are few costs and tax withdrawn upfront before current 13% Derivation is applied. But that is Derivation Principle; it is quite different from the Ownership Principle.

Per incremental ownership, oil/gas endowed States should continue to draw Derivation funds from part that the Federal Govt. owns. And, oil/gas endowed States should pay tax on the % owned. It also means that oil endowed States should correspondingly bear % responsibility for taking care of environment, etc. It also means Akwa Ibom State should have a right to choose who mines, explores, or exploits her oil/gas, and also when such mining, exploring, exploiting may be done.

Main reason for incremental ownership is to allow non oil/gas endowed States in the Federation to strategize unique diversification policies that can create wealth, thus slowly cushioning out of dependence on Niger Delta oil.

Ownership in this case should mean actual ownership of mineral resources in natural state beneath, on, or above the ground. One of laws to repeal immediately is the obnoxious and stupid 200m isobaths law that Obasanjo forced against my people.

Granting ND people 10% ownership of NNPC Joint Venture pertaining to oil/gas above the 200m water isobaths will not cut it as long as that law denies us access/ownership to/of the massive deep sea oil and gas reserves where bulk of revenue comes from. Oil and gas reserves above the 200m water isobaths, in many of those depleted marginal fields, are about drying out. That is what Obasanjo gave us; that is one of many reasons why we continue to have all the ND problems we have today. Read here to see how Obasanjo royally screwed the Niger Delta people with that 200m isobaths law.

Without repealing that law, President Yar'Adua's effort to stabilize the region will amount to a waste of time and resources.

The right thing to do, which we have been preaching for some years, is so easy: 15:85 percentile ownership. And every body will be happy ever after.

[oguzie j.j.]

SOD and CiKpatt, you guys made me laugh no be small. That has to prove about human beings with the Oliver twist theory. Remember its never enough in life. Not even when you grant 120% of the whole revenue accruing to the govt will be enough. I sincerely had expected most of us to be mature when dealing with issues as important as the niger delta/nigerian 50yrs of failed leadership.
Take into account the last stimulus package that was last distributed between the 3 tiers of govt, Rivers got 105million dollars with the states like Bayelsa and Delta coming second and third respectively. Lagos with its enormous challenges more so with an estimated 17million inhabitants got only 17.5million dollars.
I pray you follow the use of this funds maybe at the end of the day states like lagos will have something to show for it but our niger delta states? continous squandering sharing among their leaders. No amount is too enough mind you. Until we begin to hold our govs and leaders accountable, not much will be achieved no matter how much at any percentage.

[CIkpatt]

Oguzie:

I believe you can't even understand yourself rambling away. Some of us talk intelligently, you know.

It is not your business to gripe over what any of ND States does with accruing revenue. Perhaps, you should worry about what your State does with her revenue than be jealous and envious of another State.

If you could read your tea leaves very well, you'd know that the ND people have no stomach for people like you who are steeped in pettiness. You may be mocking and laughing today, but we are way past your insults... read my lips little one: we get what we want. Note the underlined.

Perhaps, also, you should go see what is happening in ND States like Akwa Ibom and Rivers States. Then you'd get to see what is called serious application of funds in efforts to revive long neglected local economies.

Problem is that you are too myopic and so very self-consumed in envy to know what is going on in other places...

[oguzie j.j.]

Originally Posted by CIkpatt

Oguzie:

I believe you can't even understand yourself rambling away. Some of us talk intelligently, you know.


It is not your business to gripe over what any of ND States does with accruing revenue. Perhaps, you should worry about what your State does with her revenue than be jealous and envious of another State.


Perhaps, also, you should go see what is happening in ND States like Akwa Ibom and Rivers States. Then you'd get to see what is called serious application of funds in efforts to revive long neglected local economies.

Problem is that you are too myopic and so very self-consumed in envy to know what is going on in other places...

Here you have missed the point and maybe failed due to your overzealous and irrational terms of judgement in realizing that I have always stood for the right application of funds that are meant in the development of Nigerians and Nigeria which the ND is a nucleus part. Myopic shouldn't be used on me because i am more pluralistic while you are not. The problems of ND are among the many known other problems present in Nigeria which we all collectively should strive to redress.
Open your eyes lot wider my brother I have nothing against my own brother except for our wicked elites present in the six geographic regions of Nigeria.