The argument put up by state governors for the removal of oil subsidy is not only sickening but exceedingly disdainful to the teeming Nigerian masses.

The governors, suddenly waking up to the reality that they might have bitten beyond their capacity to chew by promising to pay the N18,000 minimum wage, have been agitating for the removal of oil subsidy. Some of them have said without the removal of the subsidy, which would translate to an increase in their monthly allocation from the federation account, they would be unable to pay the new minimum wage. Bunkum. Some of them have even contended that the subsidy encourages corruption as the billions of naira put into the exercise always end up in private pockets and the poor, who are supposed to be the beneficiary of the gesture, are short changed by corrupt officials. Balderdash.

The import of the two positions canvassed for the withdrawal of subsidy from petroleum products, sadly, is that many of those who rule us are nescient of the essence of their high offices.

Let’s start with the second position. If the government has a programme for the citizenry and its officials abuse the programme, is the discontinuation of such programme, irrespective of its importance to the citizenry, the next line of action? Should the citizenry bear the brunt of the greed, incompetence and irresponsibility of government officials? If the system of the government is so lax as to allow government functionaries or a coterie to profit unjustly from a process, should the government further compound the woes of the masses by removing the little benefit that accrues to them from the common patrimony?

Stretching the argument further, will the government cancel its education programme because a clique has devised a way of cornering part of the funds allocated to the sector or because some people get question papers before the examination? Will the government stop funding its health care programme because some groups in the system have perfected a means of stealing drugs from the hospitals? So, what is the meaning of asking the federal government to remove oil subsidy just because some unidentified people are ripping off both the government and the people?

What the government should do, unless it is abetting the culprits, is to find a solution to the menace and that is not Herculean. According to experts, money is the easiest thing to follow in the world. If money meant for the subsidy leaves the government coffers and fails to arrive at its pre-determined destination, it is easy to know where it is detoured. Let the government do what it is supposed to do and stop annoying the masses continually by drawing our attention to its incompetence.

What’s more, all of this talk about subsidy would not have become an issue had the government been alive to its reponsibility. Between 1999 and now, the federal government realised over $500 billion from the sale of crude oil. I am told that what it costs to build a brand new refinery is less than  $20 billion. So, why have we not built new refineries? If only a fifth of the sum had been invested in new refineries, we would have had five new refineries by now.

Governance, to my mind, is about solving societal problems for the good of the majority, not looking for an excuse to deepen the problems of the citizenry. The government should find a way to solve the problem of its saboteurs without further pauperising the people.

Now to the first issue raised by the governors. They need to know that they were not elected merely to pay salaries. The people that elected the governors did so in expectation that their rulers would improve their lot, not that they would make life more difficult for them. At the moment, majority of Nigerians cannot point to any benefit they enjoy from government. Many people provide their own water, electricity and even roads. The government has abdicated its responsibility in many respects. If oil subsidy is removed, it would make life more unbearable for the majority, especially the downtrodden masses as they will have to pay more for virtually everything. Now, the cost of food items has sky rocketed. By the time the oil subsidy is removed, it will go beyond the reach of the masses.

Child poverty

I will be the first to admit that the administration of subsidy in our country needs a review but the review will not be necessary until the government does what is right. Subsidy is essentially for the poor, not the rich; it is for those who are in deprivation, not those in abundance. So, before there can be talks about oil subsidy removal, there must be a system that will take care of the poor. There must be an effective mass transit system, the railway system must be functional. The removal must have a minimal negative effect on the poor. Until an effective mass transit system is in place, it will be out of place to talk about removing oil subsidy.

In 1978, the United States of America government came up with a flight subsidy to encourage airlines to patronise small communities with low air travellers.

Through the programme, the government pays up to 93 per cent of the cost of a flight. For instance, for a round-trip from Lewistown, Montana to Billings, a passenger pays $88, while the government pays the balance of $1,343. The subsidy was initially planned for 10 years because the government believed that the number of passengers would increase considerably over a period of 10 years. But the programme has continued for about 33 years and the subsidy has not been cancelled because of the convinction of the government that if it stops the subsidy, the communities would suffer as contrary to its expectation that there would be an exponential increase in the number of passengers, there has just been a marginal increase.  Billions of dollars has gone into this programme that benefits just a fraction of the US community, yet the government has continued to support the programme at a huge cost because of its commitment to the good of the people.

How I wish Nigerian leaders would have such commitment to the people.

Irrespective of a damning United Nations Environment Programme (UNEP) report which says it would take 30 years and $1 billion to clean up the mess in Ogoniland, the Nigerian Petroleum Development Company (NPDC) will soon restart production on the 30 Shell oil wells in the community.

A senior source at the Nigerian National Petroleum Corporation (NNPC) told THISDAY at the weekend that NPDC had not shelved its plan to commence production on the wells abandoned by Shell in the wake of the crisis that greeted the hanging of former President of the Movement for the Survival of Ogoni People (MOSOP), Ken Saro-Wiwa, and eight of his kinsmen by the then military administration.

He said the re-entry plan was at an advanced stage and the NPDC would ensure that various stakeholders were carried along in whatever decision that would be reached at the end of the day. The Group General Manager, Group Public Affairs at the NNPC, Dr. Levi Ajuonuma, also confirmed in a telephone chat Sunday that the re-entry plan was on course.

He said NPDC would begin production from the oil wells after the necessary arrangements had been put in pace. “The re-entry plan is in progress. We have not shelved the idea because of the UNEP report. The NPDC will take over the operatorship of those oil blocks, but with a different philosophy. The philosophy will be that of unity, oneness and respect for the host community,” Ajuonuma said, adding that the corporation would have to appeal to the Ogoni people that producing oil in their community would improve their lot.

AP

AP

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The Group Managing Director (GMD) of the corporation, Mr. Austen Oniwon, had in January disclosed that NPDC would soon commence oil production from the abandoned wells in line with NNPC’s mandate to produce 250,000 barrels of crude oil per day in 2015. He said to achieve the set mandate, the NPDC had grown its asset base three-fold preparatory to becoming a big player in the upstream sector, while the enabling environment had been provided by the Federal Government.

The news of the planned re-entry had elicited reactions from the Ogoni people who vowed to resist any attempt by NPDC, Shell or any company for that matter to restart oil exploration in the area. The Ogoni had also criticised the report that Shell and the NPDC, its appointed operator, were close to signing an agreement on the operatorship of the fields without the consent or approval of their people. A prominent Ogoni leader, Mr. Ledum Mitee, had told THISDAY that the Federal Government was yet to contact the Ogoni people on NPDC’s plan to restart oil production in their area.

He said any company that would be allowed to explore oil in Ogoniland must be acceptable by the people of Ogoni, pointing out that government should first consult the Ogonis on whoever would take over the operatorship of those oil blocks. "I have not been contacted about the plan by the NPDC to begin production, although the government was considering appointing it the new operator. Our position as always is that Shell must be replaced. So it is important that government first discusses whoever will be coming with us. I should expect government to contact us for discussion first and for us to know who is coming, what the company stands for and what they are bringing to the table. We don't want Shell or something like Shell or a company that will work for Shell,” Mitee said, adding: "The people of Ogoni should know who the company is, what the company stands for and what it is putting on the table, before being allowed to operate in their area.”

The Federal Government had on June 4, 2008, announced that oil fields abandoned by Shell in Ogoniland would be handed over to another operator. Government reasoned that since there was a total loss of confidence between the Ogoni people and Shell, the best thing was to allow an operator acceptable to them (Ogonis) to take over exploration activities in the area.

The pronouncement had pitted Shell against the Federal Government, with the oil giant insisting that it would not hands off those blocks to any operator other than a Joint Venture partner. Shell had faulted government’s decision and resisted initial plans to hand over the control of the Nigerian oil fields to Chinese oil companies.

However, the appointment of NPDC as the new operator had received the commendation of Shell, which said it would continue to be a shareholder in the Ogoniland operations even though NPDC would become the operator. UNEP recently indicted Shell Petroleum Development Company of Nigeria (SPDC) in a report that showed that pollution from over 50 years of oil operations in the Niger Delta had caused serious environmental contamination and threat to human lives in Ogoniland, Rivers State.

The landmark report set out scientific evidence for the first time of devastating pollution in Ogoniland, part of the country's main oil-producing Niger Delta region, where Shell operated. It said the pollution might require the world's biggest ever clean-up, while detailing urgent health risks, especially badly contaminated drinking water. Shell faced criticism from UNEP, which said: “Control and maintenance of oil field infrastructure in Ogoniland has been and remains inadequate.”

The SPDC’s Managing Director, Mr. Mutiu Sunmonu, however pledged that the oil giant would take "seriously" the UN study on unprecedented pollution, but reiterated that the company was not to blame for most of the spills.

"It's important for me to emphasise that we are taking the UNEP report very seriously," Mutiu Sunmonu told AFP in an interview after the report was released. "We are looking at it in greater detail. We are taking a comb through the report to see exactly what necessary follow-up actions will be required of SPDC." The House of Representatives over the weekend said it would take very “keen interest” in the proposed clean-up lands as well as the restoration of all other communities affected by oil spills in the Niger Delta.

The lower chamber of the National Assembly said it would put in place effective oversight mechanisms to monitor the restoration of the devastated lands and waters and provide sustainable legislative solutions to guard against a reoccurrence of the phenomenon.

Deputy Speaker of the House, Hon. Emeka Ihedioha, who disclosed this, stated that the 7th session of the House would intensify the current efforts to re-enlist the Petroleum Industry Bill (PIB) and ensure the passage of the legislation as soon as possible. He said the House would remain committed and unwavering in its determination to ensure that the principles of good governance, corporate social responsibility and international best practices were brought to bear in the oil and gas industry in the overall interest of oil-bearing communities and Nigeria at large.

“The passage of the Petroleum Industry Bill will be given expeditious attention when the House resumes from its recess, among other result-driven measures that would be taken to ensure that corporate actors and relevant government departments and agencies in the oil and gas industry do not shirk their responsibilities to reclaim and protect the environment in which they operate and as well as improve the lives and living conditions of the inhabitants,” he said.

Ihedioha described the submission of the UNEP report to the Federal Government as the first step in redressing the despoliation of affected communities in the oil rich Niger Delta.  He however warned against the current attempts by operators and stakeholders in the petroleum sector to pass the buck rather than taking responsibility for their actions and inactions that resulted in the devastation of the environment. Ihedioha said  all those involved must take full responsibility for the consequences of oil exploration and production activities as it is the case in developed countries where some of them also operate.

He recalled the rapid global response which greeted the oil spill in the Gulf of Mexico, United States of America last year and expressed hope that the Federal Government would waste no time in driving an implementation process that would address the grave environmental issues raised in the UNEP report on Ogoniland and other parts of the Niger Delta.

Source: ThisDay Newspaper

A UN report criticises Royal Dutch Shell over pollution in Ogoniland

BY BOOTING out Royal Dutch Shell in 1993, the 500,000 inhabitants of Nigeria’s Ogoniland hoped to take the first step towards cleaning up their homeland, a small region within the creeks and swamps of the vast Niger Delta, Africa’s biggest oil-producing region. Almost 20 years later, a new report from the UN says it could take 30 years and at least $1 billion to rid the poisoned mangroves of a thick, black carpet of crude.

The report, the most extensive, scientific research carried out in the Niger Delta, found that some families were drinking water contaminated with 900 times as much benzene, a carcinogen, as is deemed safe by the World Health Organisation. It said areas that Shell had said were clean were in fact still polluted. It also exposed serious failures on the part of Shell and Nigeria’s national oil company NNPC, which it says failed to follow their own best operating practices. Some infrastructure, the report said, was unsafe and could cause further spills. Shell said the “report makes a valuable contribution”, and that it was reviewing its practices.

Shell pulled out of Ogoniland under pressure from the Movement for the Survival of the Ogoni People (MOSOP), founded by a writer, Ken Saro-Wiwa. Saro-Wiwa, who focused international attention on Ogoniland’s woes, fell out with Nigeria’s then-military government and was hanged in 1995 along with eight other dissident tribal leaders. Without admitting guilt, Shell agreed to pay £9.6m in an out-of-court settlement of a legal action that accused the company of collaborating in the executions.

Legal pressures on the company are increasing. The UN report came in the same week the European oil giant admitted liability for the first time under British jurisdiction for two big leaks in the delta. After half a century of working in Nigeria, Shell is pulling back. It is close to selling four productive oil blocks. It also paid out $1.7m in compensation to groups in the delta affected by spills.

After half a century of hostility to Shell and disappointment at broken promises from the government, MOSOP has so far shown little interest in the UN report. But Mr Saro-Wiwa’s son is more upbeat. “The report is a belated vindication of the allegations my father raised 25 years ago,” says Mr Saro-Wiwa Junior. “I think and hope that an important psychological barrier has been broken.

Minister of Oil speaks on increased production and price

Minister of Petroleum Resources, Mrs Diezani Alison-Madueke declared as a result of the increased production of crude oil that Nigeria is earning about $282 million (about N42 billion) from oil revenue daily. Her quote, ."Nigeria now earns average revenue of over 282 million dollars per day from crude oil-based on the combined daily production figure of crude and condensate which stands at 2.4 million barrels. "  She continued, “Many of you will recall that eight months ago, the nation’s crude oil production was as low as one million barrels per day. However, as I speak to you today, thanks to the vigorous implementation of the Amnesty Programme of this administration, the story is different.”  Nigerian President Goodluck Jonathan has been successfully implementing Amnesty Programme and it makes all the difference.

Mrs Diezani Alison-Madueke disclosed this at Lagos rally of the ongoing national campaign of Peoples Democratic Party Presidential PDP)

Speaking on job creation she continued, "By giving our country a Nigerian Content Act, the President has reversed the trend. This means; a retention of $10 billion out of 20 billion average annual industry expenditure, creation of over 30,000 direct employment and training opportunities, and the establishment of three to four new pipe mills to service industry demands, as well as the development of some dockyards and utilisation of existing shipyards among others."

Mrs Diezani Alison-Madueke said, "Petrochemical plants are fertilizer plants that will increase our agricultural and food production, and methanol plants that will boost industrial production with a combined initial investment of about $20 billion. This will result in the creation of over 300,000 jobs across the nation."

Oil Rig  Pic:vanguard

According to Dily Trust Newspaper, "Mrs Madueke said that plans are on to speed up the process leading to the construction of three proposed Greenfield refineries in Lagos, Kogi and Bayelsa states to totally eliminate product importation while assuring that the ministry through the NNPC has intervened to ease off the recent artificially induced gap in the supply and distribution of kerosene in some parts of the country through massive injection of extra volumes of kerosene into the market to force down the price.

It means increased average revenue for government with which this administration is now using to provide the much desired dividends of democracy to the citizenry. Whether you look into education, roads or health care, there is improvement in the provision of these services to the citizens of this nation,’’ the minister stated.

Mrs. Alison-Madueke stated that in the weeks ahead, the Federal Government through the Ministry of Petroleum Resources will execute some binding MoUs with a consortium of International Oil and Gas firms for the construction of a Petrochemical plant and some fertilizer processing plants in Lagos and some other parts of the country valued at over $20 billion."

As a result of the onging uprising and instability in Middle East and North Africa the was a continous rise in the price of oil.  Nigeria appears to be gaining from the spike of oil price but it has its downside which makes implementation of Nigerian budget arduous. Moreover, it gives Central bank of Nigeria(CBN) more work to do with sudden rush of cash into the system putting more pressure on inflation. The good thing about increase of oil price is the subsequent replenishing of the country depleting foreign reserve. In reality oil market needs stability not gyrations of price that makes demand and supply unstable and unrealistic.

Mrs Diezani Alison-Madueke is fiirst and only woman appointed  Petroleum Resources Minister in Nigeria by President Goodluck Jonathan.

A large oil reserve estimated 2 billion barrels has been found in the Albert region of Uganda by oil firms Tullow Plc and Heritage Oil & Gas Company. The people of Uganda including President Yoweri kaguta Museveni are elated about the discovery. This is good news and with efficient management Uganda can say good-bye to poverty. Uganda can now increase her GDP and foreign reserve.

The oil discovered in Uganda contains less sulfur which is good but it is waxy with high viscosity. It does easily coagulate at room temperature making it difficult to extract and transport. Therefore it might be expensive to extract and refine. It is estimated that Uganda needs $8 billion to develop its oil infrastructure. Uganda does not have such enormous capital instead she will turn to foreign financiers and international financial institutions. Uganda must be deliberate, careful and calculative in order not give up her new found wealth by payment of high interest rate and arrears on loans for financing the oil development.

The East African country - Uganda is a poor country with majority of the population surviving with less than one dollar a day. In next two years the production, exploration and extraction of the oil will be in full force. Most of the oil produced will be geared towards internal consumption and the remaining will be for export.

Uganda is making arrangement with Norway to build a functional oil refinery in the country so she can process crude oil in her country and provide jobs to the citizens. Unlike Nigeria that refine her crude oil outside the country due the breakdown of her ill-equipped refineries, Uganda is making the right decision to use her oil to lunch industrialization in her country.

This is a big breakthrough for Uganda and 30% of the revenue to finance her budget comes from foreign donors. Therefore with this development Uganda will free herself from foreign donation and its attached strings. Uganda must live up to her international obligations with unwavering commitments to democracy, free enterprise and respect for human rights.

Uganda government and managers can now formulate economic policy to transform their country. President Yoweri kaguta Museveni has been talking about industrializing his country; with the new found resources he can lay down the industrial rudimentary that will prepare her country to take off industrially. The most important thing the government and policy makers can do is to train their work force with superior education that is needed to compete and perform efficiently in 21^st century globalized economy.

With this new found wealth from oil, the country might be tempted to neglect the agricultural industry of the nation and relied on food importation to feed her people. It will be a big mistake with deplorable ramifications. The country must be vigilant and utilized the oil generated resource to booster agriculture in the country.

On agriculture, Emeka Chiakwelu, Principal Policy Strategist at Afripol said, "Agriculture is the future of Uganda and Africa for arable land must be cultivated. Oil can generated the capital to finance modern farming in Uganda. Africa must feed herself and Uganda can become food exporter. Oil is a limited and diminishing energy based commodity and its future is unstable with the emergence of renewable energy for 21^st century. Uganda must diversify her economy, so she will not depend wholly on oil."

Uganda just like the rest of African countries is beset with poverty and corruption. If the government of Uganda is serious about improving the lot of their people, they must be aggressive in arresting the two mentioned problems. The government must explore the ways to improve the standard of the living especially in the rural areas. The basic needs of housing, light, clean drinking water and roads must be provided to ameliorate wellbeing in the urban and rural areas.

The environmental integrity of the nation must be upheld in spite of the temptation to relegate the issue of environment to the back burner. Oil exploration is associated with oil spill and air pollution that can pose a threat to the environment, which can devastate the ecosystem. Therefore this calls for standard of operation backed with best management practices to be formulated and implemented.

The issue of corruption associated with petrodollar is a reality in that part of the world. The poor people of African oil producing countries including Nigeria, Angola and Gabon are testaments and have not benefited from their country’s oil wealth.

The only panacea to corruption is transparency and open book. The news coming from Uganda that the government is not disclosing the contracts they signed with the oil companies is not encouraging.. Uganda claims to be a democratic nation and in democracy the power belongs to the people. There must be an open book, transparency and probity in order to avoid the curse of oil wealth in the east African country.

Excerpted from a speech delivered by Philip Emeagwali to the African community in Valencia, Spain on May 11, 2008. The entire transcript and video are posted at emeagwali.com.
Imagine that it is May 25, 2063, the 100th anniversary of Africa Day, a day for reflecting on Africa’s successes and failures. The newspaper headline announces, “Last Remaining Oilfield in West Africa’s American Territory Dries Up.”

The article continues: “The last patch of rainforest will soon be empty land scarred by oil pipelines, pumping stations, and natural gas refineries. Wholesale pollution will be the environmental legacy for future generations.

“Africa’s offshore oil reserves will ebb away. Abandoned oil wells could well become tourist attractions, and oil-boom settlements will be transformed into derelict ghost towns.

“In a world without oil, air travel will disappear, and people will voyage overseas on coal-powered ships. Farmers will use horses instead of tractors, and scythes instead of combine harvesters. As crops diminish and populations soar, famine will grip the globe. With no means to power their vehicles, parents will be housebound, without jobs, and children will walk to school.”

This scenario could become a reality, because we no longer have an abundant oil supply. We know oil exists in limited quantities and that most oil wells dry up after 40 years. It is as certain as death and taxes. Rather than debate the exact year when we will run out of oil, I prefer to imagine that we have already run out. It may come sooner than any of us expect. Our heirs will thank or curse us for how much oil we left for them. Instead of asking, “When will Africa run out of natural resources?” we should ask, “When will Africa be unable to export raw materials, either for lack of our own oil or because foreign markets have themselves dried up?”

A $100 bar of raw iron is worth $200 when forged into drinking cups in Africa, $65,000 when forged into needles in Asia, $5 million when forged into watch springs in Europe. How can this be? European intellectual capital – the collective knowledge of its people – allows a $100 raw iron bar to command a 50,000-fold increase! It could be said, therefore, that a lack of intellectual capital is the root cause of poverty.

Without African intellectual capital, iron excavated in Africa will continue to be manufactured in Europe and exported back to Africa at enormous cost. To alleviate poverty, Africa needs to cultivate creative and intellectual abilities that will allow it to increase the value of its raw materials and to break the continent’s vicious cycle of poverty. Poverty is not an absence of money, Rather, it results from an absence of knowledge. 

In oil-exporting African nations, multinationals such as Shell (selling rigs for a 40% royalty on exported oil) are getting rich, while the oil rig workers remain poor. Instead of addressing the underlying causes of poverty – minimal productivity resulting from a lack of intellectual capital – Third World leaders have focused on giving false hope to their people. 

We need less talk about poverty and more action to eliminate it. So how do we do this? Education has done more to reduce poverty than all the oil companies in the world. So it is disheartening to realize that few leaders believe that their people’s potential is far more valuable than what lies beneath the soil.

Intellectual capital, not higher wages, will eliminate poverty in Africa. If we all demand higher wages, we will end up paying the higher wages to ourselves. Intellectual capital will result in the creation of new products derived from new technologies. The end result will be not just a redistribution of wealth, but the creation and control of new wealth.

And Africa’s power to reduce poverty will open the floodgates of prosperity for millions of people. One catalyst for such prosperity could be telecommuting. If 300 million Africans could work for companies located in the West (just as millions of Indians do), then both regions would benefit. The strategy would be to recognize the labor needs of the global marketplace, and enable Africa to fulfill those needs.

For example, tax preparation experts living in Africa, where labor is cheaper, could fulfill the needs of US-based accountants. Furthermore, the time difference could allow for a fast turnaround in service. It is clear that knowledge and technology is crucial to alleviate Africa’s poverty.

Africa will perish if it continues to consume what it does not produce, and produce what it does not consume. The result will be a depressing cycle of increasing consumption, decreasing production, and increasing poverty. We are missing a golden opportunity by not using the trillion dollars earned by exporting natural resources to break Africa’s cycle of poverty.

We are at a crossroads where one signpost reads “Produce” and another reads “Perish.” We risk becoming like the driver who stops at an intersection and asks a pedestrian, 
“Where does this road lead?”
And the pedestrian replies, “Where do you want to go?” 
“I don’t know,” the driver replies.
“Then it obviously doesn’t matter which road you take!” replies the pedestrian. 

If we adopt the same attitude as the driver, Africa will have lost its chance to “choose” its future. 

For decades, power in post-colonial Africa rested in the hands of those with guns, not those with brains. We were not always at war with our neighbors, but we were always at war with poverty. And we spent more on guns than on books and bread.

Africa’s choice is clear: produce or perish. However, it is important that we do not blindly choose the lesser of two evils – producing what we cannot consume or consuming what we cannot produce. We can avoid this. My wish is that by the end of the 21st century high-end products in New York City will sport the label: “Made in Africa.” 

We cannot look forward to our future until we learn from our past. Five thousand years of recorded history reveal that technology was ancient Africa’s gift to the modern world. Forty and a half centuries ago, geometers in Africa’s Nile Valley region designed the Great Pyramid of Giza, the last of the Seven Wonders of the Ancient World. That man-made mountain remains the largest stone building on Earth. It is an icon of engineering, and testifies that Africa was once the world’s most technologically advanced region.

It is absolutely imperative that Africa regain its technological prominence, which will enable it to produce what the world can consume. When we do that, Africa will finally be eating the fruits of its own labor. When Africa has regained its technological prominence, the world’s leaders will seek it out. And, like a rainforest renewed, Africa will flourish again.