Senate debate over the longstanding Petroleum Industry Bill (PIB) turned acrimonious recently when one of the members, Ita Enang, claimed that the Northern region controlled 83% of the country's oil blocks. It was an assertion that surprised many, given that those resources are located mostly in the Niger Delta region. Enang made his claim in response to the opposition by many of his colleagues, from across the political and regional divides, to the inclusion of a clause in the proposed law allowing for a 10% host community fund.
The senator's claim has eventually been shown to be inconsistent with the facts, however. But his remarks have helped to once more turn the spotlight on the rot that bedevils the Nigerian oil sector. The episode exposed the reality of individual interests over national goals, because ownership of oil blocks does not necessarily translate to wealth or development for the licence holder's community. An oil block licensee of Northern origin is essentially a businessman, and does not represent the region in a political, economic communal sense. It stands to reason that ownership of an oil block by an individual from the north is quite different from ownership of Nigeria's oil by the North, which is far from being the case. It is also important to point out that no state, local government or oil producing community owns an oil block; so it would be a misnomer to say Nigeria's oil resource is owned by either one region or the other. Parts of it are owned by individuals who have companies which they own or are fronting for them. Oil acreage ownership in Nigeria does not have ethnic coloration; sustaining production from oil and gas assets is a different matter altogether. Between 1991 and 1993, the number of indigenous oil companies operating in the industry rose from six to twenty three. They operate under the Nigerian Association of Indigenous Oil Producers. Out of their number, very few companies are producing at any appreciable capacity. Indigenous private acreage holders don't produce up to 150,000 barrels per day, or 7% of the national daily output. Greater interest should lay in the ownership of the balance of over 90%. That is the volume of oil produced by the oil majors, and has no connection with indigenous players.
Award of oil block licences and their renewal has always been done behind the glare of publicity, which has never helped matters with regards to accountability and transparency. Majority of the current licences were given out under military administrations, with no rules of procedure and accounting. Although there is no requirement that the owner of any oil well spends the money in their native communities, every oil licence contains a provision for servicing the home community.
The problems are not therefore in whether it is Northerners or Southerners that own oil blocks; they are in the handful of people from all the regions who have cornered for their own individual purposes, large portions of the nation's resource. The larger problem has been that the elite who through their connections to corridors of power to obtain oil block licences, have not used them to produce wealth by creating employment opportunities and adding value to the community. The sharing of Nigeria's patrimony to individuals by succeeding presidents after the military is a sore point that needs to be looked into by the Nationally Assembly and addressed constitutionally.
To that end, it would be prudent for the government to revoke all oil block licences in the country, and a more equitable and transparent process put in place.