Oil & Gas

Federal government orders seven states to refund N17.5 billion oil money to Rivers State.

|  By Pita Ochai  |  Dec. 2, 2012 @ 12:11 GMT

OIL has been variously described in Nigeria as both a blessing and a curse. Over the years, the country has witnessed more of the curse from oil than its blessings. For instance, the environment in oil producing areas has been devastated and this has resulted in the loss of the livelihoods of the people. Oil has brought about militancy and currently Nigeria is losing revenue from oil theft. All these add up to the popular saying that oil boom in Nigeria is a curse.

That is not all. Currently, seven states are quarrelling over oil wells which they claim to be located in their territorial boundaries. Oil producing states are by law entitled to 13 percent derivation from crude generated from oil wells located in their states. Consequently, some oil producing states have raked in huge revenue into their treasuries on the basis of crude oil produced from their territories. This explains the basis for the fierce struggle by states to claim oil wells located in their common borders. In the past few months, Balyelsa, Rivers, Akwa Ibom, Cross River, Enugu, Kogi, and Anambra states have been involved in different struggles over oil wells.

But recently, the federal government has stepped in to broker peace. It had ordered seven states including Bayelsa to refund N17.5 billion to Rivers State. The order was for them to return the 13 percent derivation paid in respect oil wells located in Rivers but paid to the accounts of different states.  Akwa Ibom, Delta, Bayelsa, Imo, Edo, Abia and Ondo received the fund between 2007 and 2010. The Rivers state government had protested that the federal government has between April 2009 and January 2011, been giving derivation fund from the Nda and Okwori oil fields to the seven states. Following the federal government order, Abia, Akwa Ibom, Bayelsa and Delta states are to refund N226.25 million, N9.567 billion, N2.071 billion, and N4.142 billion, respectively to Rivers State while Edo, Imo, and Ondo states are also to refund N305.69 million, N260.73 million, and N952.54 million, respectively.

Before the federal government decision, Bayelsa and Rivers states had openly traded diatribes over oil wells located in Soku and Oluasiri. Chibuike Rotimi Amaechi, governor of Rivers state, had fired the first shot when he warned the government of Bayelsa state to steer clear of its oil wells. Amaechi had alleged that a campaign which linked him with a vice presidential candidate ambition in 2015 might be responsible for the seizure of oil wells from Rivers state.

He also accused the Bayelsa state government of using the influence of President Goodluck Jonathan to acquire oil wells from Rivers state. But the Bayelsa state government denied the allegations. Markson Fefegha, Bayelsa state commissioner for information and orientation, rebuked the government of Rivers state for attempts to denigrate the presidency and incite disaffection between the Ijaws in the two states.

The government of Bayelsa state agreed that Soku is a village in Rivers state, but that the oil wells/fields, flow station are in Oluasiri clan in Nembe local government area of Bayelsa state. According to its statement, the name Soku oil wells/oil fields was wrongly given by Shell Petroleum Development Company Ltd, SPDC, because Soku village was their operational base at the time the name was given. This situation is not peculiar to Soku.

For example, the Idu oil field is named after a town in Ekpeye land in Ahoada east LGA of Rivers state while it is actually located in Biseni land of Bayelsa state. Similarly, the Omoku West oil field is in Biseni land of Bayelsa state but Omoku is a town in Rivers state. Incidentally, Soku village in Rivers state is about 10 kilometers from the flow station while the Oluasiri/Soku oil wells/fields are surrounded by Oluasiri villages of Nembe LGA in Bayelsa state. The Bayelsa state government alleged that between 1996 and 2006, the Rivers state government wrongly collected several billions of naira from the federation accounts accruing from the Oluasiri oil wells/oil fields, wrongly allocated to it by the federal government.

The government of Rivers state has refuted the location claim of Bayelsa state. According to Ibim Semenitari, commissioner for information, the fact that the settlements in question are part of Kalabari land is not refuted. But it is incongruous for the government of Bayelsa state to claim that while the land, might belong to the Kalabari communities, the wealth accruing from the lands should belong to the people of Bayelsa. “How then do the people benefit from their God-given resources?” she asked.

Tracing the genesis of the boundary dispute between the two states, Tele Ikuru, deputy governor of Rivers State, said that the problem started when the National Boundaries Commission, NBC, and the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, ceded about 80 percent of the oil and gas bearing communities and settlements in Akuku Toru Local Government area to the old Brass Division in Nembe, Bayelsa State. This was done by shifting the boundary between Degema division from the old Brass Division to River Sombreiro, that was in the 12th provisional edition of the administrative map of Nigeria.

The issue had led to public protests in Rivers States where chiefs and community leaders from Kalabari Kingdom, Rivers State, took to the streets to press home their demands for the returns of their oil wells. Traditional rulers and elite of Kalabari Kingdom, decked in their traditional etibo regalia, matched from Isaac Boro Park to government house where they presented a protest letter to Ikuru.

In spite of the raging controversy over the disputed oil wells, RMAFC has insisted that Bayelsa State will continue to receive the 13 per cent of revenue derived from the wells until the NBC completes its job and the Supreme Court rules otherwise. The Supreme Court has made it clear that it could not decide the boundary based on the erroneous 11th edition map of the two states. The court is waiting for the 12th edition map to take its decision.

In Anambra state, the trouble started on August 30, after the commissioning of Orient Petroleum Refinery. In his speech at the commissioning of Orient refinery, Jonathan declared Anambra as the 10th oil producing state. The declaration aggrieved Kogi and Enugu states, two neighbouring states to Anambra. Both Kogi and Enugu states are laying claim to the oil wells that feed Orient Petroleum refinery and demand that they should also be declared as oil producing states.

The Kogi state government claims that the oil well which feeds the refinery is located in a community known as Odeke in Ibaji LGA. In Enugu state, Colonel Onwubuya, chairman of the Uzo Uwani LGA, has insisted that the two oil blocs acquired by Anambra’s Orient Petroleum Company, are located in four communities in his LGA. However, the timely intervention of the President seems to have doused the rising tension in the three states whose communities were ready to take the law into their hands to claim their God’s given resources.

At a meeting with the governors of the three states, Jonathan assured them of an amicable resolution of the dispute. Peter Obi, Anambra state governor, Idris Wada of Kogi state, and Sunday Onyebuchi, deputy governor of Enugu state, who were at the meeting, called their citizens to order after getting an assurance of a peaceful resolution from the president. The president had promised to use the NBC in resolving the dispute through the proper definition of boundaries.

In the former Cross River state, the bone of contention is the claim of ownership of 76 oil wells located in the maritime boundary between western Bakassi now ceded to Camerroon and Akwa Ibom state. The contention resulted in a legal battle which Akwa Ibom state won at the Supreme Court. The prayer of the Cross River state government which initiated the legal battle among others, was to compel the Federal Government and Akwa Ibom State to pay back N15.5 billion they received as 13 per cent oil derivation from November 2009 to March 2010.

Unfortunately for Cross River state, the panel of seven justices, in a unanimous judgment written by Olufunlola Adekeye, ruled that the 76 oil wells belong to Akwa Ibom state. According to the judgment, the agreement that initially allowed Cross River state access to the 76 oil wells had been ruined by the ceding of Bakassi Peninsula to Cameroon. Since then, the oil wells in contention have continued to raise tension between the two states.  Though the government of Cross River state has accepted the judgment, it later alleged that it was meant to further devastate its people after the 2002 ruling of the International Court of Justice which ceded Bakassi peninsula to Cameroon.

According to Akin Ricketts, Cross River state information commissioner, the disputed territory where the oil wells are situated, have always been in Cross River State as part of Bakassi, Akpabuyo and Calabar South local government areas. “Because Bakassi had been ceded to Cameroon, Akwa Ibom now lays claims to and got the portion which was not ceded,” he said.

To douse tension, Godswill Obot Akpabio, governor of Akwa Ibom State, extended a hand of fellowship to his Cross River state counterpart in the interest of brotherhood, peace and ancestral bonds. But the question is: Will the dispute be settled amicably by the two states? For now, RMAFC is presently making efforts to provide succor to Cross River state due to the financial discomfort it would suffer by the court judgment.

Tam David-West, former minister of petroleum, has described the recent oil wells controversies as unnecessary and misleading. He wondered why the controversy is coming up now after the communities in the two states share a common history that spans over 300 years. David-West, who has a biological relationship with both Bayelsa and Rivers states advice the federal government to learn from its mishandling of the Boko Haram issue in the north and prevent possible communal clashes in the Niger-Delta.

George Akin, a social commentator, has blamed the disputes over oil wells on government agency assigned to ensure proper delineation of the country. To him, if each state is given proper description of its boundary, some of the contentions could have been avoided. His greatest worry is that the governors of these states would not use the revenue generated from the oil wells they are struggling to acquire for the benefit of the people of the state.

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