NIGERIA: Focus on dispute over offshore oil resources

U N I T E D N A T I O N S
Office for the Coordination of Humanitarian Affairs (OCHA)
Integrated Regional Information Network (IRIN)

NIGERIA: Focus on dispute over offshore oil resources

[This report does not necessarily reflect the views of the United Nations]

LAGOS, 9 May (IRIN) - When Nigeria's Supreme Court ruled last month that all
of the country's offshore oil and gas resources belonged to the federal
government, it was an apparent triumph for President Olusegun Obasanjo. Not
quite, analysts warn.

"While Obasanjo has won a significant legal battle at the Supreme Court, an
enormous political battle lies ahead of him," Ike Onyekwere, a political
analyst, told IRIN. "And how he goes about it bodes a lot for Nigeria's
political stability."

While Nigeria's 1999 Constitution provides that 13 percent of the country's
oil revenue be allocated to oil-bearing states, Obasanjo on taking office
limited the allocation to oil revenue from onshore oil resources. This
provoked strident protest from the littoral oil-producing states.

As the controversy deepened, the federal government in 2001 filed a suit
against the country's 36 states, seeking the interpretation of the highest
court as to what constituted the seaward boundaries of the states. On 5
April 2002, the Supreme Court ruled that the seaward boundary of the
country's eight littoral states terminated at their low-water mark,
effectively giving the federal government control over the offshore oil and
gas resources.

While the ruling represented a key legal victory for Obasanjo, it opened a
political can of worms for him in the restive southern oil region called the
Niger Delta. During four decades of oil activities, the region, populated by
mainly ethnic minorities, suffered severe neglect and environmental
degradation, area residents claim.

Over time the popular thinking that evolved in the oil region was that
successive governments dominated by the majority ethnic groups, particularly
Hausa-speaking Muslims from the north and Yorubas from Obasanjo's southwest
home region, were only interested in evacuating the oil wealth to develop
their areas. The indignation borne of this perception fuelled the unrest
that has manifested in violent protests and disruption of oil activities
through sabotage and hostage-taking, in the Niger Delta over the past decade
.

For the oil region states the Supreme Court ruling implied a sharp drop in
revenue. Worst hit among them was Akwa Ibom State, whose share of oil
revenues derived from only offshore production. Not only would it lose the
revenue, it would now be obliged to return to the treasury huge sums already
allocated to it.

Nigerian law professor, Itse Sagay, believes the ruling "is bound to
exacerbate the conflict" between the federal government and the oil states.
"Apart from the fact that the judgment is a clear negation of the rules of
international law, under which the continental shelf is an inalienable and
inherent part of the coastal state, the domestic Nigerian laws applied are
those constituting a blatant expropriation of the natural resources of the
southern minorities," he wrote in the independent 'Thisday' daily.

Signs have already emerged of deteriorating personal relations on account of
the ruling between Obasanjo and Akwa Ibom State Governor Victor Attah, in
spite of both men being members of the same ruling People's Democratic
Party.

On 2 May, Attah convened a meeting of what he called "the general assembly
of Akwa Ibom people" where he accused Obasanjo of personally introducing the
onshore/offshore distinction and of dispensing the 13 percent of oil
revenue set aside for the oil-producing states.

He referred to Nigeria's constitution at independence in 1960 which
specified that the continental shelf belonged to the littoral regions, and
pointed out that it was the 1979 constitution overseen by Obasanjo as
military ruler that deliberately omitted the provision and upheld the
distinction. After the onshore/offshore dichotomy was abolished in 1992 by
then military ruler, General Ibrahim Babangida, Attah said, it was Obasanjo
who restored it once more after he took office in 1999 and went to the
Supreme Court in the face of protests.

Attah's speech was followed the same day by widespread demonstrations in the
state capital, Uyo, during which angry youths denounced both Obasanjo and
the Supreme Court and threatened to resist what they regarded as
expropriation of their resources.

Indeed, since the ruling, incidents of violent protests and disruption of
oil activities by militant youths, which had declined over the past year,
appeared to be on the rise again. Late last month militant youths boarded a
rig working offshore for oil giant ChevronTexaco and held hostage nearly 90
foreign and Nigerian workers to back their demands for jobs and amenities.
The youths released them three days later.

ChevronTexaco has also been forced over the past month to shut down several
oil wells in Imo and Delta states, where a number of communities have laid
stringent conditions (including provision of jobs and amenities), before
they would allow the company to operate in their area.

Youths of the Ijaw ethnic group, the most populous nationality in the Niger
Delta, on 3 May held a peaceful demonstration at the premises of Italian
Agip oil company against what they considered the unfavourable employment
policies of the company. They were undeterred by the presence of armed
policemen who fired shots in the air as they approached.

"They saw that we would not be moved, stopped shooting at us and invited the
managers to speak with us," Kingsley Kuku, a spokesman for the Ijaw Youths
Council, which organised the protest, told journalists. He said similar
meetings had been held with officials of Royal/Dutch Shell and German
construction company, Julius Berger, the previous week.

Popular opinion in the oil region goes back to the early years of
independence, when groundnuts produced in the north, cocoa produced in the
southwest and palm oil from the southeast, were the main foreign exchange
earners for the country. Produced respectively in the lands of the Hausa,
the Yoruba and Igbo, the three biggest ethnic groups in the country, their
regions had absolute control over these resources.

Regional control over resources was reduced after the military took over
government in 1966, first to 50 percent in 1970, and a few years later
further down to 45 percent. In 1977, Obasanjo as military ruler further cut
back regional control of resources to 25 percent. Under subsequent military
governments it dropped eventually to one percent. With the agitation of
minorities from the oil region, it had since risen to three percent, and
then 13 percent approved by the 1999 constitution.

According to governor Attah: "There must be those who are upset by our
current efforts to improve our fortunes and change our roles. There are
those who want us to remain perpetually as house boys and maids. There are
those who cannot accept the fact that now we are making bricks to build our
own mansions, so they must take away the straw. We say, give us back our
straw."

[ENDS]

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