‘Why FG Should Stop Issuing More Oil Licenses’

  • May 04, 2021
  • Daily Independent

Nnimmo Basset, Director of Health of Mother Earth Foundation (HOMEF), in this interview with MOHAMMED SHOSANYA, speaks on burning issues in the oil and gas sector as well as the Petroleum Industry Bill (PIB) that was subjected to public hearing recently by the National Assembly. Excerpts:

The Federal Government recently said it is integrating artisanal and modular refinery operations into the oil and gas sector in order to curtail illegal oil activities in the Niger Delta region. How do think this action is achievable?

The modular refineries idea is a reaction to the rise of bush refineries that have become a source of troubling pollution in the Niger Delta. What is not being considered is that the bush refineries operate on cheap basic ogogoro technologies while the cost of the modular refineries, even if current artisanal refiners were to come together in cooperatives, may be beyond their reach.

This is where government ought to invest in our social and technological research institutions and get them to study the conditions that brought us to where we are and what are the best ways forward.

Rather than import modular refineries from outside Nigeria, one would expect government to support our research institutes to design and fabricate the needed modular refineries bearing in mind the socioeconomic conditions, costs and environmental concerns.

A few years ago, engineers at Ahmadu Bello University, Zaria, announced that they had designed and fabricated a refinery. What happened to that output? Engineers in the defunct Biafra were able to build refineries and put them to use. What happened to their ingenuity?

The current bush refiners with the ogogoro technology are producing refined petroleum products of higher quality than the poor-quality petroleum products currently being imported into the country at great cost. What lessons are being gained from these?

You recently said that Nigeria should stop awarding oil blocks and concentrate more on the environment. What warranted your advocacy against the action that had given Nigeria huge revenue for years?

Nigeria’s addiction to petroleum resources as the main revenue source is rooted in colonial extractivist logic and if we are not careful the alternative would be in the same mold.

You hear people quickly pointing at agriculture as the alternative revenue source while having in mind the same colonial plantation production system.

Focusing on halting oil theft and cleaning up the entire Nigerian environment would be the best approaches to revitalizing not just the people but the economy.

An environment that is patently contaminated across board denies people of a modicum of dignity and self-respect. A contaminated environment directly impacts the health of the population as well as overall life expectancy.

The converse is the case when you have a clean environment. Embarking on remediating the Nigerian environment would generate massive employment and task the inventive creativity of the people. A clean environment – rivers, land and air – would also positively affect food production and block efforts to introduce risky genetically modified seeds and foods.

Stopping oil theft would add about 50-100 percent more revenue from the petroleum sector.

So, the issue is not about issuing more licenses or more oil blocks except we are happy to issue licenses for more wastage and theft.

We have it record that up to 400,000 barrels of crude oil are stolen daily in the Niger Delta.

This is approximately equal to the combined installed capacity of the three refineries in the country.

This means that those who point accusatory fingers at poor villages scooping crude oil with buckets when there is an oil spill are playing the ostrich and avoiding the fact that the theft in the region is an industrial activity with international tentacles.

So, if we want to double oil revenue, the thing to do is to stop oil theft. This is a win-win proposition. Stopping oil theft stops criminality and corruption. It also saves the environment from more pollution.

One of the actions government took against the needless gas flare in Nigeria was the gas flare commercialisation programme and adjustment of gas flare penalty.

Nigeria lost N439billion to gas flare last year despite the programme. What are your worries about this and how do you think Nigeria can achieve zero flare?

As long as crude oil is being extracted here there will be associated gas and zero flare will not be achieved.

The criminal activity is not gas flaring per se, but routine gas flaring. Gas flaring can be needed as a safety measure or to reduce pressure from wells, but to simply burn the gas 24/7 for decades is totally objectionable and irresponsible.

It is an ecological as well as economic crime. It is ecocide, an ecological crime in the same range, or worse, than war crimes, crimes against humanity and other unusual crimes.

Gas flaring began under colonial rule when the wellbeing of the colony’s environment and people were not on the priority list.

The focus was exploitation and domination. It continued under the neocolonial situation and was consolidated under autocratic military rule even though the practice was outlawed under their watch in 1984.

The option for oil companies to pay minuscule fines where they flare gas was a license to continue flaring.

Routine gas flaring will end when the government ceases to partner with polluters in polluting actions and when the penalty for gas flaring is equal to the economic cost of the flared gas plus the environmental and health impact on the communities.

In other words, although we cannot pay for the health of the people, the fine should be at least 4 times the economic cost of the flared gas. With this logic, Nigeria lost trillions of Naira in 2020 and not N439bn.

The Federal Government filed suit against international oil companies over short remittances of revenue. Aiteo is against a multinational oil company over allegation of oil theft. There are other moves against the IOCs in the Niger Delta. What are your concerns over this development?

These are positive developments. There is a vital need for the disruption of the unholy matrimony between the government and the oil companies.

A complicit polluter cannot be a regulator. If a Nigerian company accuses a multinational oil company of oil theft, we should pay attention.

The accusation should be thoroughly investigated. Indeed, Nigeria is ripe for a national conference on oil theft. Who are the thieves and how come massive plunder is going on in a totally militarized Niger Delta and no one is seeing what is going on? What lessons were learned from the incident in which a ship loaded with stolen crude escaped from a Lagos harbour while in the custody of the Navy in 2004?

Nigeria has declared a decade of gas. How far can the country go to power the economy with revenue from gas and boost domestic consumer of the asset? What are the prospects of achieving this especially against the backdrop that consumption of gas is still low while its flare is on the high side?

Decade of gas sounds good, but I would prefer we call it decade of fossil gas. We wrongly call the gas natural gas whereas it is fossil and not natural gas.

President Jonathan announced Gas Revolution and there was no revolution.

Current president, General Buhari, has announced a decade of gas and I think the declaration could be on target as this may end up being the decade in which dependence on fossil gas and other fossil fuels will rapidly decline.

It should be a decade, not for celebrating an economy booming on fossil fuel resources, but a decade to map out strategies and move rapidly away from this resource. Do not forget that fossil gas is very harmful to the climate.

One of the loud views expressed during the recent public hearing on the Petroleum Industry bill was the need to increase the meagre 2.5% Host Community Fund to 10 percent. Would you say Nigeria is good to go with a law that would bring in more investors and engender transparency in line with international best practices?

The way the PIB has been handled over a period of about a decade is shameful.

The provisions for Host Communities have been used as a smokescreen to scuttle the process and forge another unjust petroleum sector law.

The “Host Communities” concept itself is problematic, because rather than pursuing inclusive development in the Niger Delta the concept brings up groupings that are divisive and gives the upper hand to the corporations and the complicit state.

Truth is that every community in the Niger Delta is a host community.

Pollution does stop at where petroleum infrastructure is located. Pollution from one location does spread to creeks and rivers in areas where there are no pipelines or oil wells.

By pronouncements of oil company officials in 2010, it was clear they want a PIB that would enhance their profit margins and would not accept anything that seeks better benefits for the people. They do everything possible to scuttle any people-friendly law.

The provisions for Host Communities in the current PIB are very insulting.

The provisions are constructed as allowances to be administered by oil corporations.

It is very insulting for Nigerian legislators to accord oil companies the duty of determining who a host community is. Even colonial lords would not contemplate that nonsense. Even the community boards to administer the funds are to be populated or controlled by the oil companies, the very entities who have committed crimes against our peoples and our environment. Are we serious? The PIB is set to kindle divisions and conflicts as prefaced by the sad incident from the so-called public hearing held in the NASS — which properly termed would be called oil company hearing as the communities were silenced, side lined and insulted.

The DPR had recently introduced the National Production Monitoring System as part of the measures to stem crude oil theft in the country. How would you access this system and what should Nigeria do to accurately account for crude oil production and discourage theft?

The best answer to the move by the DPR is the one recently given by NEITI which stated the fact that the country does not know how much oil is extracted in Nigeria’s offshore fields.

What that tells us is the lack of transparency of the corporations and the fact that figures they bandy about should not be trusted.

Remember the Bonga offshore oil spill of 20 December 2011. During that incident Shell claimed that they pumped 40,000 barrels of oil into the sea believing they were pumping the stuff into a vessel. That level of carelessness offshore says something all on its own.

Beyond the concerns about offshore operations, it is also known that our oil fields are not properly metered as to allow independent verification of figures.

This is why oil theft is entrenched. If you don’t know how much oil is extracted it means the export figures are basically guestimates.

Installing a proper metering system is not rocket science and there are countries that would possibly be willing to assist with the technology in that aspect.

It would be good to know if government tracks the records of quantities of crude loaded in Nigeria and discharged abroad. Do they match? If they don’t match, do the quantities swell offshore due to sea water intrusion?

You were passionate about Ogoniland’s clean up and restoration. What is the state of the clean up now?. Are you satisfied with the ongoings there?. What else do you think should be done to bring back Ogoniland from.age long environmental despoliation?

The clean-up of Ogoniland is a test case for the entire Niger Delta. Some of us have been deeply concerned and believe that everything must be done to ensure that it succeeds.

The full restoration of the Ogoni environment will take a lifetime. That of the entire Niger Delta will take a couple of lifetimes.

Some people may say it will take just 30 years to get the Ogoni environment restored. That is optimistic and a level of restoration can be attained by that time if we succeed in halting new pollutions.

We need an intergenerational commitment to ensure that future generations can survive and thrive in the territory.

I have always said that the Ogoni clean-up is a learning experience, a foundational exercise. We agree that we cannot stay at the foundation for ever. Now is the time to see more speed.

There are new boards in place and the project office is apparently equally undergoing rejigging.

I served in the initial Board of Trustees and saw that it took a lot of push to get the corporations and the NNPC to contribute what is in the kitty at present. What the BoT always told them was that contribution of funds was set to be done annually and was not dependent on whether funds previously contributed had been depleted or exhausted. That position should be maintained so that as the clean-up progresses there will not come a time when funding would become the bottleneck.

It may also be necessary for government and HYPREP to realise the complexity of the tasks ahead and allow companies with proven track record elsewhere to join the rescue bid.

This is an environmental rescue mission and when emergencies of this nature occur waiting for competence to come from locally registered companies may not be the best approach.