Niger Delta plan will not affect foreign oil companies

Nigeria’s plan to allocate 10 per cent of its oil joint ventures to Niger Delta residents will not affect the country’s partnership with international oil companies, a presidential adviser said on Tuesday.

President Umaru Yar’Adua has proposed giving a larger share of the country’s energy wealth to its oil-producing southern states in his latest bid to bring peace to the impoverished region.

Emmanuel Egbogah, special adviser to Mr. Yar’Adua, told Reuters the 10 per cent stake will be taken from the national oil company’s majority stake in joint ventures with Western oil firms. Royal Dutch Shell, Chevron, ExxonMobil and other international energy giants operate in Nigeria through the partnerships.

“(The foreign oil companies) won’t be affected. This is our thing, to give back to the Niger Delta,” Egbogah said.

Trust system

Under the initiative, which must be approved by parliament, Niger Delta residents will receive hundreds of millions of dollars each year in cash benefits or through a “trust system”.

Officials said details are still being worked out with the lawmakers on ensuring the funds are given to Niger Delta residents and not misused by corrupt politicians or businessmen.

It is also not clear which of the states will come under the initiative. There are nine oil-producing states in Africa’s most populous country, but some say only six are in the Niger Delta.

“The details are still being worked out,” Minister of Petroleum, Rilwanu Lukman, told reporters on the sidelines of an oil conference in London. “We are looking for an arrangement that would be good for the country and good for the (Niger) Delta people.”

Analysts say Yar’Adua may find it difficult to obtain enough support from politicians representing the non-oil regions, which stand to lose in the deal.

Decades of neglect and frustration led to a rise in militancy and criminal activities in the Niger Delta in recent years.

Attacks by the Movement for the Emancipation of the Niger Delta (MEND), the main militant group, has prevented the OPEC member from pumping above two thirds of its installed capacity.

Violence has subsided over the past three months after thousands of gunmen accepted Yar’Adua’s unconditional pardon and disarmed.

MEND lifted a three-month old ceasefire last week and threatened to resume attacks, but the militant group appears to have been severely weakened by the departure of its top commanders.