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 Concerns Mount in Niger Delta over Marginal Fields Bid Round

Concerns Mount in Niger Delta over Marginal Fields Bid Round


As the federal government opens the second bid round for marginal fields, Niger Delta stakeholders are raising concerns over what they called an imminent breach of former President Umaru Yar’Adua’s commitment to grant oil-bearing communities 10 per cent stake in the allocation of blocks, THISDAY has learnt.

Many stakeholders that spoke to THISDAY warned of dire consequences of the breach of the commitment, saying the federal government had gone ahead with the fresh bid rounds without any indication that the oil-bearing communities would be carried along.

Part of the likely backlash of the federal government’s “breach of faith,” they warned, might be disruptions to the fields producing the gas the federal government hopes to feed pipelines, including the $2.8 billion AKK project carrying gas from the Niger Delta to the North, which President Muhammadu Buhari inaugurated on Tuesday.

The federal government had earlier this year opened the bid rounds for 57 marginal fields, hoping to raise $500 million to finance its cash strapped 2020 Budget.

The leaders of the oil-producing region have expressed concerns about the government’s silence on the issue of their benefits from the bid round process being handled by the Department of Petroleum Resources (DPR), Nigeria’s oil and gas regulatory agency.

It was gathered that the $500 million expected from the exercise, would be raised from signature bonuses from the 57 fields, which would be auctioned.

The entire process for the 2020 bid round schedule, according to DPR, started from June 1, commencing with the official announcement, to August 9, when payment of application, bid processing fee, and submission of the technical-commercial bid would take place.

A lot of efforts appeared to have gone into making a success of this latest round, which is coming about 17 years after the 2003 bid round.

But the grouse of the Niger Delta stakeholders arose from a stalled plan by Yar’Adua to pacify the restive region in 2009 with a 10 per cent stake of royalty from oil production.

Under the plan negotiated with the militants at the onset of the declaration of Amnesty Programme by Yar’Adua, 10 per cent of royalties were supposed to go to the oil-bearing communities under trusts.

The plan was part of the recommendations of a presidential committee headed by Yar’Adua’s petroleum adviser, Dr. Emmanuel Egbogah, and it was to include offering residents of the oil-rich Niger Delta region 10 per cent of all oil and gas ventures in an effort to end the unrest that had hampered oil production.

Egbogah had confirmed this initiative to London’s Financial Times in 2009, saying Yar’Adua hoped to add the proposal to reforms that would be enacted by the end of that year.

After the declaration of Amnesty on June 25, 2009, the late president moved to concretise his commitment by asking the Ministry of Petroleum to codify the plan.

Subsequently, the 10 per cent stake for oil-bearing communities was provided for in the draft Petroleum Industry Bill (PIB), which, however, has suffered vacillation in the National Assembly for years.

With PIB mired by politics and corruption in the legislature and in the absence of a clear policy directing the implementation of the Yar’Adua plan, stakeholders are worried that the oil-rich region might be shortchanged as the federal government gets set to parcel out the marginal fields.

THISDAY gathered that as the auctioning process is ongoing, the government has been silent on the issue of the 10 per cent stake for the oil-rich region, raising concerns in the region.

Some of the leaders of the region, who spoke on condition of anonymity, also sought to know in clear terms, the government’s position on the issue.

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