The North, Crude Oil And Restructuring

The Insight by Lateef Adewole

Two weeks ago, I wrote an article titled: “Why Wait Till The Last Minute?” There, I looked at many things happening in Nigeria in recent times, as the current administration of President Muhammadu Buhari begins to wind down. These are some positive developments, expectations of which have earned the president and his administration many criticism from Nigerians, including my humble self, in the past. I have written many articles exposing the wrongdoings and what needed to be done by government, in the last seven years and blamed the president for them. The buck stops on his table.

So, when I observed improvements in such areas, I felt it was only fair to talk about them and also commend the same President Buhari and his government for them. This did not go down well with some people who believe the government should only be criticised. Theirs could have been driven by partisanship or other factors, but I do not belong to such category. All my interventions are for the betterment of my country and her citizens, not for “PHD” (Pull Him Down) reasons. This was why I wrote that article. I have been proven right once again.

This Tuesday will go down as a special day in the history of Nigeria. After the discovery of crude oil in commercial quantity in Oloibiri, in the present day Bayelsa state, some 66 years ago, history was made by President Buhari and his administration, for being able to flagoff the first oil drilling project in Northern Nigeria. This happened after decades of such efforts without success. It is to the credit of his government which was resolute and resilient in pursuing it after the discovery of oil there by the NNPC in 2019, which has now yielded positive outcome.

The Kolmani Integrated Development Project is a 50,000 barrels per day oil well named OPL 809 and 810. This is located at the upper Benue River Trough, Gongola basin, boundary between Bauchi and Gombe states, with a proven crude oil reserve of over one billion barrels and over 500 billion cubic feet of gas. This is a good news as it is an addition to the Nigerian total reserve of 37 billion barrels of crude oil. It is a joint venture among Sterling Global Oil, New Nigeria Development Company (NNDC) and NNPC Limited.

As expected, naysayers will criticise it. They will claim that such effort is unnecessary and wasteful at this time, given the global advocacy for decarbonisation and moving away from fossil fuel to green energy, in the global efforts towards zero-emission and climate change control, neglect of which has caused unparalleled devastation across the world in rising earth temperature, global warming, flooding and so on.

However, this project is said to have attracted a whopping $3 billion. This is a testament to its desirability in spite of the factors stated earlier. President Buhari stated that: “it is therefore to the credit of this administration that at a time when there is near zero appetite for investment in fossil energy, coupled with the location challenges, we are able to attract investment of over $3bn to this project”.

Similar efforts are expected to continue in other frontier basins of Anambra, Dahomey, Benue, Sokoto, Chad and Bida. The good news is that it is an in-situ integrated development project which consists of upstream exploration, oil refining, power generation and fertiliser production. It will contribute to energy security, financial security, food security and overall socio-economic development for the country. The project will produce 50,000 barrels per day. This has brought the north to belong to oil producing region, like the south, something that has been the sore point between the two halves of the country over the years.

Now that we have crude oil in the north and exploration is starting, what next? For so long, crude oil has remained at the root of many troubles facing Nigeria in multi-dimensional ways. The exploration and the consequences of it on the people of the region and their environment, fiscal irresponsibility of government, corruption, the militancy, inter-tribal suspicion and frictions, demand for resource control, seccessionists’ agitations, restructuring and so on. Let me explain briefly.

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Over the years, there has been brickbats between the south and the north over the oil discovered in Niger Delta concerning who owns what? Who should control what? Who is reaping from where they did not sow? The north has been seen as parasitic as far as the oil money is concerned. The people of Niger Delta, in whose backyards the oil is obtained, believed they are being cheated of their God-given natural resource.

The north, on the other hand, by the advantage conferred on them in government, believes the oil belongs to the whole country. More ridiculous claim that it belongs to the north has been espoused at a time by some northern groups. This claim was premised on another claim that it was the money from the northern groundnut in the 50’s and 60’s that was used to develop the oil during prospecting, exploration and mining at inception. So, the oil producing states cannot and should not claim sole ownership.

This eventually led to the onshore-offshore dichotomy since the 70’s, which resolved to distinguish what should be considered as belonging to each oil producing area on land (onshore) and the extent into the high sea (offshore) that could be part of it. Over the years at different times since independence, a certain percentage of oil derivation is given to each of the oil producing area, like done for other minerals derived from any state. By 1999 constitution, it is 13%, up to date. What is done with this is another issue entirely as we are not seeing proportional developments in that region. Niger Delta Development Commission (NDDC) is also there squandering oil money specially allocated for the development of the region, as seen in many recent revelations.

It took a recent whistle blowing by River State Governor Nyesom Wike for many Nigerians to know or to be reminded, the 13% derivation payments. He claimed, while addressing the audience, that President Buhari has paid them all their outstanding since 1999 to date, and that it is with the money that he has been executing numerous projects he has been commissioning almost on weekly basis for months now. This has made the people of the oil-producing states to start asking their governors what they did with their own shares.

In truth, the discovery of crude oil in Nigeria has not served the purpose for which it is meant as much as it should. This is why the question as to whether it is a blessing or a curse to the country arises at different times. Like earlier said, it is the same oil that bred laziness within the leadership of the country. Before oil, in the 50’s and 60’s, the country was functional. We operated regional parliamentary government with three and later four regions. They were autonomous, functioned like independent countries within a country, modelled after the United Kingdom with Britain, Scotland, Ireland and Wales.

Each region with their independent government, pursued policies, local and international, that are important to their people. They generated their revenues from resources within their territories, and contributed a certain percentage to the centre, in exact opposite of what is obtainable now with the “feeding bottle” mentality kind of unitary government, pretending to be federal system, that we now operate. Before, the Prime Minister was the head of the central government with responsibilities of defence, currency and few items on exclusive list.

This is contrary to the behemoth, unwieldy federal government that we have now, with a president at its top, exercising powers over the whole country. The federating units called states are now subservient, in a way, to it. Most of the items that regions took care of were moved into the exclusive list that only federal government is eligible to dabble into, including as ridiculous as minerals resources in each states. This often conferred undue advantage to the region in power to appropriate to themselves disproportionately, from this pool of resources obtained from other areas. This has created the perceived injustice of reaping where not sown.

Some productive states contribute huge sums to the federation account and some others contribute meagre amounts. Yet, the states with meagre contributions could receive more from the pool than what they contributed. This breed laziness on the part of such states and their leaders since there is automatic allocation coming from the central government on monthly basis.

Given the long years of military rule, largely headed by northerners for 26 years as against 4 years by southerners, who, in the course of continously breaking the country into smaller units by creating more states and local governments, did so inequitably. Today, from the 36 states of the federation, the north has 19 (52.8%) states as against 17 (47.2%) in the south. The north has 419 (54.1%) local governments as against 355 (45.9%) in the south, totalling 774 LGs across the country. A typical example of such injustice is Lagos and Kano. The two states were created at the same time in May 27, 1967. The two states are considered to have almost equal population with Kano slightly higher, according to official records. This is grossly inaccurate in reality. At a time, both had 20 local governments each.

The military government of Babangida created Jigawa from Kano state in August 27, 1991. Today, while Lagos, with real higher population than Kano and Jigawa, still has 20 LGs, Kano has 44 LGs and Jigawa has 27. The two states of Kano and Jigawa have a combined 71 LGs as against 20 in Lagos. And the revenues from the Federation Account are shared based on these divisions into states and local governments. Why won’t there be agitations for restructuring and self-determination?

Outside oil, Lagos contributes highest to national purse, but Kano gets higher amount in total, when combined allocations to local governments and state are considered. How is that just? Such unmerited advantages to the north have made meaningful discussion about restructuring to be impossible with the north. They see it as a plan to take away what they are currently benefitting from, unduly. So, they resist it at all cost and by all means, despite knowing the current structure is not working in the overall interest of the country as a whole.

Now that crude oil has been found in commercial quantity in the north, even if it is not economical, considering the difficulties of prospecting for and producing oil in a land-locked areas in the north as evidence in the statement from the GMD of the NNPC Ltd, Mallam Mele Kyari when he stated; “using state-of-the-art hydrocarbon derisking technologies, including magnetotelluric technology, air-borne based stress field detection technology and micromagnetic analysis, among others, FES went into an aggressive exploration to achieve commercial discovery”.

We hope more will still be found, I hope the north will begin to be more comfortable to discuss restructuring. Nigeria is not working as presently constituted. A restructured Nigeria does not necessarily mean balcanisation of the country into pieces. We can simply find ways to walk our ways back to where our founding fathers planned for and left the country: regional, parliamentary government. That was the last time the country functioned more effectively. We cannot continue on this path to perdition.

In addition to the oil, numerous mineral resources are buried underground across the country, with substantial proportions in the northern Nigeria. We were all aware of the large gold deposit in Zamfara state that is being mined illegally. Same in many other states. As we speak, the north feeds the country by virtue of their massive expanse of arable land. This shows how important the region is to the rest of the country. He who gives food, gives life. All these are what can and should give the north, a merited advantage over the south, which should be explored altruistically, rather than forced one. There is only so long this can continue. It will reach a breaking point some day. We need to begin the discussion. It is better to jaw-jaw than war-war.

Once again, let me congratulate President Buhari and his administration on this unprecedented achievement. We pray that this discovery will be a blessing to the country as a whole, and particularly, to the people of these areas, by avoiding the mistakes of the past with the current problems facing the Niger Delta region. The president aptly captured this in his speech when he said; “I urge the NNPC Ltd, NNDC (NewNigeria Development Company), and their strategic partners to ensure all lessons learnt from our years of experience as an oil-producing nation are utilised to ensure harmonious relationship with the local communities”.

We cannot afford to replicate the mess of Niger Delta anywhere in the country.

May God continue to protect us and guide us aright.

God Bless Nigeria.

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November 26, 2022.