How Nigeria Govt. Ineptitude, Greed Promote Lawlessness in Oil Producing Communities by Omafume Amurun

National Opinion

Don Jazzy(nickname) is a community leader in oil rich Otumara,  Warri South West Local Government Area where Shell is planning to build a gas project.  Don Jazzy who knows that Shell do not want force to be used against oil communities, has confiscated Shell land acquired several years ago and it seems both the federal and state governments are powerless to persuade the “war lord” to move out of the land.   In fact, he is reported to be building more structures on the land. This is the unfortunate state of affairs in several oil producing communities, where some persons now act  with impunity particularly those who are power brokers in the community.

But can we blame them, particularly when most of the oil producing communities are criminally neglected and see the oil companies as the only means by which they can get some developmental projects. The federal and state governments are only interested in revenue to develop Abuja and other state capitals. The result is that powerful individuals who are prepared to take the risk of confronting government and the oil multi-national companies are now the opinion leaders and the most respected people in these communities

Several years ago,  Shell acquired some  parcel of land  in that community for the project but work did not start immediately.  When Shell was prepared for work to begin and went to the site only to discover that it has been illegally occupied. Government officials or the leadership of the community that collected compensation from Shell earlier never raised any eyebrow.

Shell was generous enough and magnanimously agreed to pay the new illegal occupiers “compensation” but Don Jazzy refused to accepted any money and attempts by Shell to persuade him to move has so far failed.

This was one of the information gathered by journalists in Effurun, Delta state during an interaction with Shell General Manager,  External Relations,  Igo Weli, who was represented by Evan Krukrubo, Eng. Okogie John, Ucheoma Amechi, Michael Adande and Uforma Ovwigho. The interaction was to brief journalists on pipeline right  of ways which are currently being encroached upon with impunity without government or community leaders doing anything about this, despite the contribution of Shell to the economic development of Nigeria

From their reports, pipeline vandalism which reduced in 2016 was now on the increase. Illegal bunkering and crude theft accounted for 80 per cent of pipeline leaks while equipment failure is 20 per cent.

According to Shell report, “Oil spills due to crude oil theft and sabotage of facilities, as well as illegal refining cause the most environmental damage from oil and gas operations in the Niger Delta. Irrespective of cause, the SPDC JV cleans up and remediates areas affected by spills originating from its facilities.

“A key priority for Shell is to achieve the goal of no spills from its operations. No spill is acceptable and we work hard to prevent them. Regrettably, in addition to spills caused by criminal activity there were nine operational spills of more than 100 kg in volume from Shell Companies in Nigeria facilities during 2017. This number is one more than the eight spills in 2016.

“SPDC has publicly reported oil spill statistics annually since 1995 in the Shell sustainability report and this website further enhances transparency on spills in Nigeria from SPDC-JV facilities. It tracks the progress of our spill response from when we learn about the leak to when clean-up is completed and certified by Regulators.

“When a leak is identified, production is suspended and efforts made to contain any spilled oil. We regularly test our emergency spill response procedures and capability to ensure staff and contractors can respond rapidly to an incident. In line with government regulations, a Joint Investigation Visit (JIV) team visits the spill site to establish the cause and volume of oil spilled. The team comprises representatives of SPDC, regulators, government security agencies, state governments and communities sometimes with local NGOs as observers.

“The SPDC JV cleans and remediates the area impacted by spills from its facilities, irrespective of cause. In the case of operational spills, it also pays compensation to people and communities impacted by the spill. Once clean-up and remediation are completed, the work is inspected, and if satisfactory, approved and certified by Federal Government of Nigeria regulator National Oil Spill Detection and Response Agency.”

Responding to questions, Eng. Okojie John regretted that when barges and tankers are arrested, in no time the owner will successfully get them from the security agencies and return to their illegal oil business

Shell is also involved in various social investments in the communities they operate across the Niger Delta, particularly in the area of primary healthcare services. The company appealed to communities to invest compensations paid to them for projects that would create jobs and reduce poverty instead of building town halls or palaces for their traditional rulers. One of the official recalled a particularly community that got N600 million compensation and just share the money among the elders.

In a briefing early this year on Shell companies  in Nigeria activities and economic contribution to the country, it was revealed that $23 billion(N5.31 trillion) was paid to the federal government between 2013-2017,   $1.9 billion paid to the Niger Delta Development Commission(NDDC) since inception in 2002 while the oil bearing communities social investment funds for community-driven projects under the Global Memorandum of Understanding(GMoU) was $228 million

The company stated that 94 per cent of Shell contracts was awarded to Nigeria companies in 2017 while 631,000 barrels of oil equivalent per average daily production by Shell-operated ventures in Nigeria in 2017. Contrary to insinuations, the company said its headquarters was already located in Port Harcourt in the Niger Delta while its operations in Delta state was still on-going

“Shell operated Joint Venture has implemented wide ranging projects in Delta State, disbursing a total of N1.88 billion to Global Memorandum of Understanding (GMoU) clusters and establishing a Professorial Chair at the Federal University of Petroleum Resources, Effurun (FUPRE,) as it continues to operate in the state and contribute to its development. These are in addition to the donation of N600 million facilities to five schools under a Youth Sports and Athletics Development Project (YSADP,) to mark Nigeria’s centenary anniversary.

“These projects show our continuous presence and interest in the development of Delta State,” said General Manager, External Relations, SPDC Igo Weli. “While it is true that SPDC divested from a number of assets in Delta State in line with our business strategy, and in support of the participation of more Nigerian companies in the oil and gas industry, we are still active in the state, for example, operating Forcados Terminal, flow stations, gas plants and a network of pipelines. There is no better way to relay this message than undertaking projects and initiatives that are helping to rebuild lives and communities in the state.”

“The GMoU funding covers the three clusters currently active in Delta State since the inception of the concept in 2006. The Cluster Development Boards (CDBs) like their counterparts in other parts of the Niger Delta, are implementing health and educational projects among others.

“The centenary project in Delta State which was inaugurated this month includes the development of an athletic curriculum by Africare, an international NGO, using the American National Collegiate Athletic Association standards, the provision of facilities for long/triple jump, high jump, shot put, javelin, discus and hammer throw in five schools as well as the construction of a 400m six-lane rubberised track at Government College, Ughelli. These facilities have been installed at the highest standards. A key component of the project was the inclusion of 283 athletic and leadership training sessions, academic performance tracking and mentoring. A total of 150 students from across the five project schools benefitted from the leadership programme. Delta State Governor, Senator Ifeanyi Okowa had said that the project marked a major turning point in the lives of students and communities.

“The Professorial Chair in Light Weight Automobile Engine Development was activated at FUPRE in December last year and is the latest of six established by SPDC JV. The Chair at Effurun is expected to contribute to the growth of local content in Nigeria’s automobile industry. In a bid to boost employment especially among youths, more than 700 young men and women benefited from Shell’s LiveWIRE initiative between 2003 and 2017. Also, a total of 160 students from Delta State have received the SPDC flagship Cradle-to-Career scholarship awards since they were instituted in 2010. The programme offers fully-funded six-year awards for children from rural communities to attend some of Nigeria’s top secondary schools

SPDC is the largest Shell company in Nigeria and produced the country’s first commercial oil exports in 1958 in Oloibiri, Bayelsa State. SPDC is the operator of a joint venture (the SPDC JV) between the government-owned Nigerian National Petroleum Corporation – NNPC (55% share), SPDC (30%), Total E&P Nigeria Ltd (10%) and the ENI subsidiary Nigerian Agip Oil Company Limited (5%). It is focused on onshore and shallow water oil and gas production in the Niger Delta.

The SPDC JV’s assets include:

  • Around 1,400 operated oil and gas wells
  • A network of approximately 4,000 kilometers of oil and gas pipelines and flowlines
  • Nine gas plants and two major oil export terminals (Bonny and Forcados)
  • One power plant (Afam VI).

Shell Nigeria Exploration and Production Company Limited (SNEPCo)

SNEPCo was incorporated in 1993 to develop Nigeria’s deep- water oil and gas resources. It is a 100% Shell-owned company and holds interests in four deep-water blocks, under the terms contained in a Production Sharing Contract (PSC). SNEPCo operates OML-118 (including the Bonga field, Shell interest 55%) and OML-135 (Bolio and Doro, Shell interest 55%). SNEPCo also has a 50% interest in OPL-2451 (Zabazaba, Etan), which is operated by the ENI subsidiary Nigerian Agip Exploration Limited and a 43.75% interest in OML-133 (Erha) operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.

  • Bonga was Nigeria’s first oil and gas project in water depths over 1,000 metres
  • It increased Nigeria’s oil production capacity by 10% when it began producing in 2005
  • The Bonga floating production, storage and offloading (FPSO) vessel has a total production capacity of 225,000 barrels of oil per day and 210 million standard cubic feet of gas per day
  • Bonga helped create the first generation of Nigerian oil and gas engineers with deep water experience and stimulated the growth of support industries.

Nigeria Liquefied Natural Gas Company Limited (NLNG)

NLNG is a joint venture incorporated in 1989 to produce LNG and natural gas liquids for export. It was Nigeria’s first LNG project. Shell holds a 25.6% share, and its partners are NNPC (49%), a subsidiary of Total E&P (15%) and an ENI subsidiary (10.4%).

  • The NLNG plant at Bonny Island has six processing units (trains) with total processing capacity of 22 million tonnes a year of LNG and up to 5 million tonnes of natural gas liquids (LPG and condensate) from 3.5 billion standard cubic feet per day of natural gas
  • Plans for building a seventh train (train 7) that will increase the total production capacity to 30 million tonnes a year of LNG are currently in progress
  • NLNG accounted for approximately 7% of the world’s total LNG production capacity in 2017
  • NLNG is serviced by a fleet of 23 LNG vessels including six new vessels constructed in South Korea
  • LNG cargos are shipped to Atlantic Basin countries such as Spain, France, Italy, Turkey, Mexico and the US, as well as markets in Asia.

Shell Nigeria Gas Limited (SNG)

SNG was incorporated in 1998 to promote gas as a more reliable, cleaner and cost-effective alternative to liquid fuels for the Nigerian domestic market. It is a 100% Shell-owned company.

  • The first and so far, only wholly-owned subsidiary of an international oil company involved in domestic gas distribution in Nigeria
  • SNG operates a pressure reduction and metering station, and a gas transmission and distribution network of approximately 125 kilometers that distribute natural gas to about 90 industrial and commercial customers, majority of which are in Ogun, Abia, and Rivers States of Nigeria
  • The company’s employees are all Nigerian and SNG is the only gas distribution company in Nigeria whose facility is ISO 14001 Certified.

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